Indiaplaza

» see indiaplaza.com as it lived, on the wayback machine

~ the obituary ~

This one runs on the same clock as a story I did live through, on a different continent. In 1999 buying anything over the internet from Turkey ran into the identical wall: almost nobody had a card they trusted online, the post office was not built for it, and the shop had to solve both problems before it could sell you a book. The sites that came through here did it by lasting long enough to be bought by a foreign company. Indiaplaza did not get that ending, and the reasons are worth reading in full because they are not the reasons people assume.

It started in June 1999 in Bangalore as Fabmart.com, founded by K Vaitheeswaran with five others, and it is generally accepted as India's first genuine e-commerce site. It sold books and music at first and added groceries, and the catalog eventually ran out to apparel and consumer electronics. There was no payment gateway to plug into, so the company built its own. There was no logistics network for parcels of this kind, so it improvised one. Cash on delivery, the mechanism that later made Indian e-commerce possible at all, was worked out here because there was no alternative that customers would accept.

The company split in two. The physical arm, by then called Fabmall, merged with the South Indian chain Trinethra Super Retail and reached about 150 stores, and in 2006 the Aditya Birla Group bought the combined business and rebranded it More. Vaitheeswaran kept the website. In January 2007 he acquired a US-registered shopping site called Indiaplaza.com and took its name, and from there the story is one man carrying an eight-year-old internet business into a market that would finally arrive without him.

~ the case file ~

~ too early ~

Being first sounds like an advantage and in this category it is a bill. Everything Fabmart had to invent in 1999 was infrastructure that its successors got for free: a working gateway, and a customer base that had stopped flinching at the idea of paying a stranger before the box arrives. Indiaplaza paid for all of that in years and cash, then handed it over by existing.

The other half of the problem was the money. A $5 million Series A came in from Indo-US Venture Partners in February 2011, and by March the company was publicly looking for $10 million more. That is a normal size of raise for a normal business, and it was the wrong size entirely for the market that had just opened. Flipkart and Snapdeal were being funded on a scale where losses were the plan rather than the risk, and a company that had spent twelve years learning to be careful could not suddenly be reckless enough to compete.

~ the last year ~

By late 2012 the founder had stopped drawing his own salary. Early in 2013 roughly ninety-five percent of about 130 employees left, because the wages had stopped, and suppliers were going unpaid alongside them. He went looking for one final round, a figure in the region of 26 crore rupees, which against what was being written into Indian e-commerce that year was almost nothing. Nobody wrote it.

Indian technology press reported in July 2013 that the company was about to shut, and in August the office was emptied. The website outlasted the company by a few months in the way these things do, still resolving, still nominally a shop, and by early 2014 it had gone dark for good. Today indiaplaza.com is a parking page that bounces you to a lander.

~ what it became ~

The founders did not vanish, which is the part that makes this grave sting a little. Four of the original Fabmart team started BigBasket in October 2011, using the online grocery knowledge they had built in 1999, and it grew into one of India's largest internet companies. That was happening while Vaitheeswaran was failing to raise 26 crore for the site the same people had started together.

He wrote the book afterward, in 2017, and called it Failing to Succeed, which is a more honest title than most founders manage. The pitch that Indian e-commerce could work turned out to be completely correct. Being right about it in 1999 was worth nothing, because the thing being sold was not a store, it was a decade of waiting for a country to get online, and nobody funds that.

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