Sunday 19 March 2017

Is Indofash the latest one to join the ‘struggling Indian ecommerce start-ups’ list?
The ecommerce industry has provided (is providing) a wonderful opportunity to entrepreneurs and independent artists in India. Indian Online Seller’s women’s day special series and regular interviews has women & men talking about the beauty of the online retail world as it’s an even platform for all and how it has enabled them to set up their businesses smoothly.
There are of course the big fishes – Amazon, Flipkart, Snapdeal and few others. But niche players have also managed to gain online shoppers’ acceptance. Fashion ecommerce portal Indofash’s co-founder Pallavi Mohadikar is also one of the many young entrepreneurs who found her calling in ecommerce and started a niche site.
Indofash started as an online platform by Mohadikar (IIM Lucknow alumni) and Rahul Kumar Gayakwad (IIT-Bombay alumni), to showcase the works of Indian weavers and artisans. Mohadikar left a cushy job to start her own venture and it all was fine until the company started facing troubles that many of the Indian ecommerce start-ups are facing right now.
The fashion etailer’s website isn’t working, and the social media pages were last active in January 2017. And most importantly, sellers haven’t been paid!

Where’s our money, ask sellers?

Online seller Indi Bargain messaged Indian Online Seller (IOS) that got us interested to explore more about Indofash. The seller informed us that payment has been pending for over 6 months and the fashion portal’s founder hasn’t been very responsive.
“Started selling on IndoFash last year. Talked with Pallavi and she was very confident with their plans, so I go ahead. Very soon got one or two bulk orders and I dispatched them. Not got any payment after months, then I remind team. After many reminders, they ask my bank detail again. I provided immediately and after many emails (they never pick phone), they provide me NEFT receipt (November last week), but I haven’t received any amount till date,” shares Indi Bargain with IOS.
The seller adds,
“Talked with Pallavi (she also never picked phone so chat on Whatsapp). I have screen-shot of that chat also. Conclusion is that she is visiting all major city to expand business and don’t have much time for their sellers tiny amount. I sent emails to dozens of sellers of Indofash and got response from many sellers that they also didn’t got any amount, so they stop selling over Indofash. not working from my home since months. Not sure whether Indofash is closed or my IP blocked.”
For a young start-up like IndoFash, the list of unpaid sellers is quite long. IOS has reviewed email trails of at least a dozen sellers who spoke about pending dues and lack of communication. But the number of affected sellers is more than a dozen.
“Worst Experience to say the least. Professionalism is a word which is missing from their dictionary. No responses to calls and/or emails. But if they have received an order, they will contact you constantly until the package is shipped. I would like to retrace my old steps when I signed up with Indofash and would definitely NOT walk the same path,” says another seller Tanay Ganguly narrating his selling experience at Indofash.

Trusting Indofash’s young team full of dreams costing sellers?

Let’s be honest – Indofash doesn’t feature in the top 5 online marketplaces or niche marketplaces list. It is a relatively new player that not many have heard about. Therefore, IOS was interested to know as to what made sellers sign-up for it at the first place.
“One of IndoFash team member contacted me directly via email/phone. I enquired about Indofash and feel that Pallavi is from a weaver family and highly educated. Pallavi also called me and explained their plan in detail. Also she had good contacts with weavers and craftsmen unlike now days CEO, who know only to speak,” answers Indi Bargain when IOS asked what was about Indofash’s pitch that made the seller list its products on the site.
So clearly, the young founder Mohadikar was able to convince vendors about Indofash’s USP and her knowledge & passion for handloom products left many impressed. She had the right idea, the right platform and support of many sellers, in spite of being new to the industry. Then what went wrong?

Founder’s word

IOS reached out to Pallavi Mohadikar, Indofash’s co-founder to ask the above question and she replied promptly.
“Yes, there has been few issues regarding payments because of few internal issues that every startup has to go through. But we have taken care of all the problems. We have paid most of the sellers. Most of the vendors have been very supportive through this phase and we have almost sailed through it. We are rebooting the company and all these people are standing strongly with us,” says Mohadikar.
IOS requested her to share something about the ongoing reboot process and future plans, but she didn’t reply to the follow-up email.
Speaking about the sellers’ pending dues, she asserts that all the remaining payments would be cleared by the end of March 2017. In fact, soon after IOS emailed Mohadikar, she contacted sellers (as informed by Indi Bargain) and asked them to share account details and exact outstanding ledger with her. She assured sellers that all the payments will be cleared before 15th March.
Mohadikar informs IOS,
“There are few sellers who do not even have any pending payments but still protesting for sake of it. One of the seller called Indi bargain, we have paid them in last November itself. I can share the payment receipt with you as well still they are again asking for payments.”
But according to Indi Bargain, the account number mentioned in the payment receipt is wrong.
“They have shared the NEFT receipt. But the account number doesn’t have two leading zeros (Jaipur, ICICI bank account starts from 00120) so amount will be refunded to sending party… I am trying to tell them dozens of times, that my account number should have 2 leading zeros, but the receipt doesn’t contain… Contacted my ICICI bank, but they told that only sender can confirm the status of transfer. The receipt prints after making a transaction, but if any failure occurs, payment revert back to sender account,” explains Indi Bargain.
Mohadikar chose to ignore IOS’s question about Indi Bargain’s claim that the payment failed as the receipt contains wrong/incomplete bank account number.

Is India an unforgiving ecommerce market?

Only 4 months back (November 2016), Indofash raised Rs. 1 crore from angel investors. The company’s plan was to utilize this money to reach out to global buyers and add 130 lakh artisans & weavers. Unfortunately, they haven’t been able to pay its domestics vendors with that money.
This is not a unique story. Right from big names to niche players, many are finding it hard to survive. While the small players are looking for buyers, the big ones are busy firing staff members and wooing investors. And vendors across various ecommerce platforms are fighting for their dues.
What is it about the Indian ecommerce market that makes its hard for start-ups to sustain? Lack of investors, lack of ecommerce-specific laws or way-too-demanding customers? Can only companies with deep pockets like Amazon or those with support of deep pocket companies like Flipkart-backed Myntra, Jabong and Alibaba-backed Paytm survive?
Or is it the blind ambition of start-ups without proper planning that’s killing them? Or fooling vendors has become a norm for biggies and newbies?

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