Finding Hard Time, Yebhi.com turns into Shopping aggregator

Although e-commerce is flourishing rapidly in India, in contrast to it, Yebhi.com, one of India's leading online shopping E-commerce portal has changed its business model from pure e-commerce store to online shopping aggregator and a coupon website this means that now Yebhi.com will not sell annything directly but will showcase product from other e-commerce website such as Flipkart, Myntra, Jabong, Zovi etc.

Gurgaon based Yebhi.com began as BigShoeBazaar.com in 2009 but changed its model in 2011 to sell fashion and apparels and then became a marketplace after itsun competitors such as Flipkart, Myntra and Snapdeal changed their respective models. However, Yebhi was unable to scale up its business after being unable to scale up and raise funds. This clearly hint that startup ecosystem is concentrated in south of India and e-commerce startup from north such as Yebhi.com find it hard to raise funds, investment oppurtunity and allround atmosphere for tech-startup in particular.

Yebhi reportedly has a registered user base of about 1.5 million people, of whom about half a million have transacted on the site. In 2011, Nexus Venture Partners and N. R. Narayana Murthy's Catamaran Ventures invested Rs 40 crore in Yebhi.com and since its inception Yebhi has raised $40 million (around ₹240 crore) from 4 rounds of funding.

Danish Ahmed, CEO of Yebhi.com told a news website that the company has tied up with nine leading portals and plans to rope in 40 more online and local offline stores on its platform by end of this month. "We are bringing them variety from all the online and local stores, showing them prices with discounts and offers across these stores, and guiding them to products that would most suit their tastes, social circles and body structure," he added. With the new model, the company is targeting about $50-60 million revenues by end of this fiscal.

"E-Commerce is a very capital intensive industry and companies will continue to burn a lot of capital to acquire more customers. We decided to move out of that space, and leverage our learning and brand value to build a business that’s highly profitable and scalable. We are building a business which is capital efficient" said Danish. The new site will now list products from scores of online fashion stores, and help customers to find the most relevant products, through personalized recommendation to help them make informed purchase decision online.

Exact reason as why Yebhi.com has change its business model so drastically is unclear. Although, the e-commerce startup has been giving hints for changes in its facebook official page and later on thursday it announced that new Yebhi.com has been launched as shopping aggregator and with coupons from across all the stores in India.

Till Date, Yebhi had managed to raise 4 rounds of funding, it raised Rs. 10 Crore ($2 Mn) Series A funding by Nexus Venture Partners followed by a second round of funding of Rs. 40 Crore ($8 Mn) in 2011 led by Catamaran Ventures. In 2012, they raised series C funding of Rs. 100 Cr ($20 Mn) and lastly in Aril 2013 they raised Rs. 150 Cr ($12 Mn) from their existing investors. Howver more than year Yebhi.com was unable to raise funds nor its ganing large customer base like its competitors.

In contrast, companies such as Flipkart, Myntra, Jabong, Fashionandyou and Snapdeal have been able to attract new investors every year. The new model of Yebhi is less capital intensive and does not require any investment in inventory, fulfilment centres, logistics, support and supply chain.
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