Selling an organic lifestyle online pays dividends
Jan 30 2014, 16:51 | By SME Mentor
It’s still a niche market but serial entrepreneur Manuj Terapanthi believes he can change that perception. Which is why he launched Organic Shop, an e-commerce portal that sells organic products.
The Jaipur-based entrepreneur, who has leveraged the shift people are making towards healthier lifestyle choices, believes there is a huge opportunity for players like him in India. Thus, after starting with textiles as its most innovative offering in 2011, Organic Shop has since expanded to an astonishing 6,000 products and 50 brands.
Last year, the start-up received Rs 30 lakh in funding from Rajasthan Angel Investors Network. Buoyed by its progress, Organic Shop also helps farmers who produce in small quantities but lack market exposure.
Terapanthi, who is also president of Jaipur INC, a USA-based organisation that sells organic products in the global marketplace, talks about the market in India and what’s driving it on a growth trajectory. Excerpts from an interview:
What was the idea behind Organic Shop?
When we started researching the organic market, we noticed two things. First, there were a lot of really good organic products but their reach was limited. Second, it was difficult for consumers to comprehend how and why a product was organic. We also observed that the Indian market for organic products was unorganized and there was very little awareness. This prompted us to launch Organicshop.in, which not only makes it easy for customers to buy organic products from anywhere in India but also developed a standard process to identify certified organic products.
We also realised that the existing players did not offer a complete range of organic products so we did, including clothing, food, cosmetics and wellness products, textile products like yoga mats, towels and comforters, spices, green tea, grocery, cosmetics, etc.
What is the standard of rating organic products in India? Is there an agency that certifies them?
In India, the APEDA regulates the certification of organic products according to the National Standards for Organic Production (NSOP). The NSOP standards are recognised by the European Commission and Switzerland as equivalent to their countries’ standards. Similarly, the USDA has recognised NPOP conformity assessment procedures of accreditation as equivalent to that in the US. This certification makes it possible to export organic products from India.
Organic food products manufactured and exported from India are stamped with the India Organic certification mark issued by the APEDA, which has recognised 11 inspection certification bodies, some of which are branches of foreign certification bodies while others are local bodies.
How do you choose brands to partner with on your website?
Any brand or producer of products that are completely 100 per cent organic can sell their products on our platform. We retail these products across India once we are certain these products are 100 per cent organic. We bring to the table more than 6,000 products. We market these products by also spreading awareness about the advantages of using these products. Local players in our marketplace get complete end-to-end assistance in the marketing of their products, which they otherwise would not have had access to.
Going the organic way: Manuj Terapanthi
Do you sell your own brand of organic products as well?
We are in the process of building our own brand which is ‘Itsorgic.in’.
How has the consumer responded to the concept of organic products and how has your company benefited from rising awareness?
The market for organic products is growing at a compound annual growth rate (CAGR) of 20-22 per cent. With rising spending power of the growing middle class in India, and increased awareness about chemical-free food, the organic and natural products sector will grow significantly. The global organic food and beverages market is expected to grow from $57.2 billion in 2010 to $104.5 billion by 2015, with a CAGR of 12.8 per cent. India exported 135 products last year (2012-13), a total volume of 1,65,262 metric ton (MT) including 4,985 MT organic textiles. The organic agri export realisation was around 374 million USD including 160 USD organic textiles registering 4.38 per cent growth over the previous year.
Where does the maximum number of sales/orders come from in India?
We have witnessed the largest chunk of sales from Bangalore, Delhi and Mumbai. South India, as a region, contributes heavily to the number of orders. States-wise, Punjab emerges as one of the greatest consumers of organic products.
What is the average daily number of orders you get and the average ticket size?
Organic Shop registers an average 20 orders a day and has 30-40 per cent repeat customers. The average ticket size ranges between Rs.800 and Rs 1,000.
Tell us about your expansion to Europe?
We have ventured into the European market with a view to bringing the widest range of organic products to the European market. We have inked a deal with a Europe-based company TradeFormAir Ltd to look after marketing and distribution under the brand Online Organic Mart Europe Ltd. Europe is one of the leading markets and producers of organic products worldwide and this sector has not been fully tapped by global players. We also plan to venture into the US.
Which is the most sought-after category of organic products on your portal?
Food is the most popular category in our catalogue but organic cosmetics are gaining ground in the last year. While the global demand for organic personal care products is expected to reach $13.2 billion by 2018, we are optimistic of further growth in this segment and are paying special attention to expanding our cosmetics range in India.
How much is the organic products market growing in India and globally?
The industry has witnessed a transformational shift as more and more people are keen to embrace a healthier way of life. By 2015, the global industry for organic products is expected to grow to $1 billion. The industry globally is growing at 14-15 per cent, while the Indian industry is growing at 20 per cent, year on year. Demand from developing markets is increasing, which is a good sign.
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