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Yebhi Shuns Pure Play eCommerce, Becomes Aggregator For Other Players

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While eCommerce is growing at at furious pace in India, it is not a easy business to be in, especially if you are into multi-brand marketplace model. eCommerce needs huge pool of funds and resources. There is a reason why Flipkart has raised over 1.5 billion dollars till date and why Amazon has committed over USD 2 billion.

The eCommerce market potential is huge and so are the costs. None of the major eCommerce sites are even close to making profits as yet. All the money that has been invested is coming from VC pockets. And, if you are not able to raise the required funds, you cannot survive for long in the eCommerce game.

Yebhi has been sailing in that boat for some time now. Their partnership with IRCTC did not generate much business and neither have they been able to raise funds to the tune of what their peers have raised.

Yebhi seems to have understood that they cannot go on like this for long and have now pivoted into a aggregator for other e-commerce sites. They have been giving feelers about this for last couple of days on their Facebook page. On September 1st, they put up banners saying “A New Yebhi is coming Soon” and then hinted about “A store that can show you everything”.

Finally, today their homepage dons a new look that clearly suggests that they have moved away from pure play eCommerce to a aggregator and couponing site.

Yebhi Aggregator

Why Yebhi Pivoted Into Aggregation / Coupon Site?

Till Date, Yebhi had managed to raise 4 rounds of funding, The raised Rs. 10 Cr ($2 Mn) Series A funding by Nexus Venture Partners followed by a second round of funding of Rs. 40 Cr ($8 Mn) in 2011 led by Catamaran Ventures. In 2012, they raised series C funding of Rs. 100 Cr ($20 Mn) and last year they raised Rs. 150 Cr from their existing investors.

While they have consistently raised funds over past 4 years, the quantum of funding was just not enough to keep them afloat in cut-throat eCommerce market. Their partnership with IRCTC was also discontinued couple of months back, as it did not meet too much of success.

Yebhi’s site traffic (around 1.6 to 2 million visitors monthly) has remained stagnant for a while now and has not been growing due to lack of aggressive marketing & advertising.  To overcome the issue with lack of funds and cater to their traffic, becoming an aggregator seemed to be the best possible solution.

Being and aggregator and coupon site frees them from lot of resource intensive functions like managing sellers, logistics and support. The overheads reduce to large extent as well.

Cashback

Aggregation business has another advantage – It does not cost much (relative to an ecommerce site) to be a aggregator. Once you build good technology for pulling and listing products from various sites, it is largely a maintenance job. What Yebhi has done to differentiate themselves is to bring in something called “Yebhi Coins”. This is kind of reward or cash back program that for Yebhi customers will avail if they make purchases through Yebhi.

It is not clear if Yebhi has forged some kind of partnership with other sites or are operating purely on affiliate basis. If they have not, the affiliate margins are too low for Yebhi to make any substantial cash.

We will need to wait and see how successful Yebhi’s aggregation business gets – In the meantime we can safely say that we have one less less player in Indian ecommerce space !

  1. Krunal Shah says

    Coupon and product comparison sites are doing great. Just look at the likes ofcoupondunia, couponrani etc. Yebhi wisely moved from eCommerce to affiliate business. It’d be too stupid to completely shut down the business. However, this has also placed a big threat to other players in the coupon business.

  2. Kaxil says

    Feel Sad for Yebhi, But The money raised by Amazon and Flipkart is simply astounding. I think The Next site on threat would be SnapDeal & Yepme

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