Homeshopping.pk is a true start-up success story from Pakistan. In a recent interview, the founder of the online retailer shared the story of the website’s origins from his bedroom with PKR 10K (approx. $100 today). Today, the online retailer has grown to $10 million in annual retail sales, 7 outlets across the country and ambitious international expansion plans.
The Basics
The usual (often clichéd) lessons of believing in yourself, grabbing an opportunity early on when you see it and trying to find success outside the traditional paths of employment ring true for this story. The availability of this service is not only a success story for the entrepreneur and team working at HSN (Home Shopping Network), but also for consumers in Pakistan. I have purchased mobile phones from the website multiple times over the last few years, and have been a satisfied customer along with the thousands others who have benefited from the convenience of their service.
We will try to see what stands out with this website and enterprise besides being one of the first-movers in the online retail space in the country.
Price-beating policy
One of the concerns of online shopping is whether you are getting the best price for the product. This worry is alleviated by HSN’s price beating policy, where they promise to offer a lower price than any other vendor. The process for informing them of a lower price is simple and easy to follow. What this does is not only benefit the customers, but also HSN’s pricing as they are able to use customer feedback to stay price competitive. This would save using internal sources for the same goal.
Online Retailer Pricing Strategy
Prices are changed on a regular basis with price updates being broadcast on a regular basis. This flexible pricing also gives online retailers an edge, with the leader in online retailing, Amazon, changing its prices as frequently as 15 minutes. This aspect of online retailing is considered critical in international markets, and is the focus of a start-up in the US just focusing on making online retailers competitive by providing them pricing data and insights from the internet.
Pakistan’s market is smaller and less advanced, but having moving prices gives HSN an edge over its competitors and keeps consumers attracted. And this is not just price reductions, but also upward price movements in product’s prices, making it all the more interesting and complex.
Warranty and Repair
Another concern that HSN’s policies take care of is defected products – they offer a 7-day return policy as well as HSN’s own repair warranty (up to two years) on the products you purchase. One difference that I have seen over the years is that initially this warranty used to be built in to the price of the product, but later they started charging a small fee for the warranty. I believe this fee is Rs. 2000 per year of the repair warranty. This warranty is especially useful for Apple products which are not covered by Apple’s own warranty in Pakistan. Additionally, imported phones also usually come without any warranties from the manufacturer, but HSN provides this service.
This can be viewed as an insurance premium of sorts with coverage limited to normal usage malfunctions, and only covering the labor costs of the repair (replacement of hardware will still be covered by the customer). The length of the warranty claim period (at least 10 days) might seem to be long for customers and discourage using HSN’s services when the time comes, but it is definitely a good guarantee of sorts that will help your peace of mind.
This aspect of their service helps them compete with brick-and-mortar retailers in the same space. The impact of this policy has actually caused these retailers to offer warranties of their own for repair of the mobile phones purchased from them.
Operations and Expansion
Running an inventory with thousands of products and managing sales on a cash-on-delivery basis is an operational challenge on its own. This part of the business really reflects the real-life challenges of business even with an online portal that faces the customers.
Although mobile phones might still be the center of their retailing operations, they are certainly not the only major product they offer. The range seems to be expanding to household products, clothes and shoes. Additionally, they are also offering a web store service for vendors to sell their products via the Homeshopping website. According to the founder, there are also plans on expanding on the kind of channels used to reach out to customers.
Everything’s Right?
In terms of expansion, product and pricing strategy, Homeshopping seems to be doing nothing wrong. One indication of how it might be spreading it self too thin was the listing of these night vision binoculars (dozens of different models) priced at around PKR 3-500K – which is a really large sum of money for an online purchase. But depending on how they keep inventory, listing any kind of product on their website might not be adding to their own costs.
It would be truly interesting to see where this business is 5 and 10 years from now, and how it continues its success story in a legendary manner.
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