Long before the pandemic struck in 2020, e-commerce was gaining traction around the world due to its convenience and product variety unmatched by brick-and-mortar retail. Think of a digital marketplace capable of procuring gourmet offerings from food artisans or exquisite artwork from remote locations, an excellent range bound to wow all. Add to that the growing use of AI/ML, visual search, and computer vision, enabling the best possible recommendations and customised product recommendations based on individual preferences. Therefore, one should not be surprised to discover that the traditional gifting market is shifting online, lock, stock and barrel.
In the Covid and post-Covid years, corporate and consumer gifting has grown exponentially as companies and individuals are looking for safe, convenient and customised options. However, corporate gifting accounts for more than 80% of the total gifting market. The online gifting market in India is expected to reach $72.6 Bn by 2029 as customers are willing to pay for offbeat and innovative gift items.
However, those buying gifts online tend to get digitally distracted hunting for choice gifts and superb deals. They are also notorious for ‘ditching’ brands in the absence of instant gratification, be it product quality, variety, pricing or the delivery window. Aware that early users often faced sub-par experiences despite the surge in online gifting, entrepreneur-investor Tarun Joshi launched IGP (formerly Indian Gifts Portal), a multi-category gifting marketplace offering highly curated, premium collections straight from the artisans.
IGP offers a wide array of exquisite gifts, including delicious cakes and gourmet chocolate, sweets and dry fruit, fresh flowers and plants, home décor and fashion accessories (clothes, cosmetics and jewellery), toys, party props, office stationery and more. With 4 categories, 30 sub-categories and 3000+ SKUs in its kitty and counting, the platform claims to serve as a one-stop online destination for gifting needs, bringing value, elegance and customisation befitting every occasion, from festive and corporate celebrations to personal occasions such as birthdays, anniversaries, weddings and housewarming.
Although IGP, in its new avatar, is the brainchild of Joshi, it had long functioned as an online gifting business with India Mart. After its buyout by the current founder in 2017, the business expanded three more heads – a B2B2C arm for corporate gifting called IGP for Business and two more gifting sites, one dedicated to gifting fresh flowers (Interflora India) and the other specialising in gourmet chocolate (Masqa).
The platform caters to enterprises and SMEs via IGP For Business and offers exclusive deals to corporate clients in India and abroad.
The parent company overlooking all three business segments is Join Ventures, set up by Joshi in 2019.
IGP flexes its tech (AI) and logistics muscle to meet the surging demand for gift items across corporate and non-corporate domains. While AI-driven gifting solutions help personalise and curate products, its partnerships with 10 logistics leaders, such as Bluedart, DHL, FedEx and more to ensure that goods from India can reach 100+ countries within five days. Furthermore, its wide range of perishable products can reach 25+ Indian cities within 30 minutes via speedy, temperature-controlled shipping and 400+ cities are eligible for same-day delivery.
With offices in India, Singapore and Dubai, IGP claims a customer base of more than 10 Mn and a 50% YoY rise in revenue in FY23. It targets INR 300 crores in revenues in the current financial year in a largely future-proof market, as gifting never goes out of fashion.
To date, IGP has raised $35 Mn from a clutch of investors, including Venture Catalysts++ (VCats), 9Unicorns, MO Alternates, DSG Consumer Partners and others. Around $6 Mn of the funding came from VCats, which took part in the company’s Series A and B rounds.
Hailing VCats’ support, Joshi said, “They have helped us make critical business decisions throughout our startup journey. This has enabled us to expand categories and streamline our operations. VCats has a company-first approach and believes in empowering founders to make tough decisions for disruptive outcomes.”
Products, Occasions & Lean Delivery: IGP’s Three-Pronged Success Mantra
IGP grew rapidly under Joshi’s helm due to its focus on AI-powered recommendation/curation and signature range. That is not surprising as the founder is no newcomer to the startup world. Joshi has a background in engineering and investing and worked for PE/VC firms 3i and CVCI, managing funds worth $500 Mn. He also recognised the potential of direct-to-consumer (D2C) brands long before the Covid strike in 2020 and funded several ecommerce, technology and financial services companies as an angel investor.
Online gifting was his choice field, though, when Joshi donned the entrepreneurial hat. The reason: He wanted to bridge the physical and experiential gaps existing in the e-gifting market.
Setting up a reliable marketplace with a robust supply chain for quick and hassle-free delivery was just one part. Joshi was fully aware of the value of personalising gift items, a can’t-ever-go-wrong strategy equally dear to corporate and non-corporate gifters who want to make these occasions memorable for recipients. After all, gifting is about creating lasting impressions and cementing bonds. And what can achieve this better than customised gifts, underscoring one’s appreciation and understanding of what matters most to the other person? (More on gift customisation later.)
Items like leather wallets, rakhis, clay lamps, idols of goddesses and more are handcrafted products created by skilled Indian artisans. The goal is to help them succeed in an increasingly challenging business environment. IGP provides these artisans with designs and high-quality materials. These artisans create products throughout the year to maintain timely supply, especially with festive gifts. In return, the artisans make 25% of the selling price of each product, said Joshi.
After experiencing steady growth for three years, the marketplace faced a major setback due to the Covid-19 pandemic. Despite the ballooning online sales, the platform’s supply chain was disrupted following nationwide and global lockdowns. The business needed a rethink to stay operational, and Joshi devised a creator-to-customer delivery model to reduce reliance on traditional intermediaries. This lean delivery model has been retained even after the pandemic, as it shortens delivery windows, lowers shipping costs, and facilitates an agile and streamlined process that can quickly adapt to the new normal.
IGP has also expanded its product categories and range to cater to people who celebrate traditional festivals. The platform began by curating collections for numerous festive occasions such as Diwali, Bhai Dooj, Raksha Bandhan, Karwa Chauth and Christmas, as well as special occasions like New Year’s Day, Mother’s Day, Father’s Day and Valentine’s Day. Encouraged by the tremendous response, it began offering high-quality gifts for birthdays, anniversaries, housewarming and other personal milestones.
Its B2B2C corporate gifting platform (IGP for Business) caters to companies of all sizes and offers innovative gifting solutions. It has gifting provisions for several occasions, such as birthdays, Women’s Day, employee onboarding, work anniversaries and recognition programmes, besides festival gifting. It further creates corporate microsites featuring organisational milestones and maintains a database of key stakeholders – employees, vendors, partners and important customers. The aim is to boost employee engagement, delight customers and help its corporate customers maintain year-round connections with people who matter.
IGP has doubled down on high-octane promotion on TV, OTT platforms and online channels to grow its presence faster. Among its brand promoters were Bollywood celebrities Akshay Kumar, Parineeti Chopra, Pooja Hegde Ananya Panday and Kajol, who graced the festive seasons of Raksha Bandhan, Valentine’s Day & Mother’s Day respectively.
In India, Tier I locations account for 50% of IGP’s total revenue, followed by Tier II (30%) and Tier III (20%). On the other hand, its global markets fetch 20% of its total revenue, while the Indian market makes up for the 80%.
How The Power Of AI-ML Adds The ‘Personal’ Touch To IGP Gifts
Finding the most meaningful gift for a recipient can be most difficult nowadays, as we increasingly live in a digitally driven world with fewer real-world interactions. In stark contrast, our digital footprints abound. AI/ML tools are critical in customising/curating gift items as they analyse these data feeds to profile people, gain insights into their preferences and customise offerings in sync with individual preferences.
Based on these suggestions, IGP prepares curated gift boxes containing gourmet items, healthy foods, fresh floral arrangements or other products related to contemporary lifestyles. The platform extends its personalised services globally, and shoppers can add pictures, names, initials, logos and more when they order keepsakes and photo gifts.
Essentially, using AI/ML creates a unique shopping experience for every customer on the IGP platform. This has transformed the corporate and consumer gifting culture, underscoring a level of personalisation that is hard to match manual efforts despite best intentions.
“People’s growing preferences for personalised gifts also reflect a shift towards sustainability and health awareness. Therefore, curated hampers/gift boxes and handmade products are fast emerging as favoured choices. The trend further underlines the importance of gifts that convey genuine appreciation and heartfelt emotions expressed uniquely,” said Joshi.
Smart Warehousing Is The Key To Fast Delivery
According to Joshi, IGP stands apart from the rest in online gifting due to its AI-powered gift personalisation capabilities and a vast delivery network for fast fulfilment locally and globally. In fact, good delivery speed is critical for a platform like IGP that ships perishable items like gourmet foods and fresh flowers and plants. So, the platform has tied up with top logistics players and built its own hyperlocal delivery network to facilitate fast pan-India delivery and rapid export.
As perishable items travel from farms and food units to dark stores and warehouses and finally to customers’ doorsteps, shipments are meticulously temperature-controlled to retain product freshness throughout the journey. IGP ensures 30-min delivery in more than 25 Indian cities and same-day delivery across 400+ cities. Overall, it takes 24-72 hours to deliver gifts to 1K+ Indian cities and guarantees international delivery to 100+ countries within five days.
The platform operates two warehouses spanning 1,00,000 sqft and 50+ dark stores in India to provide full-stack fulfilment services. Warehouse automation is also in place for efficient inventory management, streamlining work processes and accelerating inventory movement at all points (entry, in-facility, movement to shipping zone and exit) with minimal human assistance. It also runs a temperature-controlled warehouse in Dubai to cater to the Middle East market.
IGP aims to provide a seamless gifting experience for the customer by allowing them to track their orders in real-time and accommodating for special nuances in gift giving. This transparency helps build consumer trust, reduces the risk of lost packages and minimises the number of customer enquiries. According to Joshi, there has been an increase in the demand for 30 minutes delivery, underscoring the significance of logistics efficiency.
From Online To Omnichannel: Will The Shift Boost IGP’s Growth?
The online gifting marketplace plans to set up new dark stores across India. It also wants to amplify its presence in the Middle East and Southeast Asia by opening 150 dark stores in 50 cities. But the next big initiative (not officially announced yet) is to launch a chain of offline stores across India. This omnichannel approach aligns perfectly with the shifting dynamics of the global ecommerce market.
But this, by no means, is a leap of faith. Similar gifting platforms like Ferns N Petals (FNP) and Archies are already running omnichannel (a mix of online and offline formats) businesses and franchise models to optimise their revenues while addressing the diverse preferences of consumers entrenched in the gifting culture.
Therein lies the crux. Archies Greetings & Gifts was incorporated in 1990, took over the partnership firm and was converted into a public limited company. Similarly, FNP was set up in 1994. Therefore, both platforms have been operating for almost three decades (or more if we consider how Delhi-based Archies first emerged in 1979). All these years have given them ample opportunities to experiment with different formats, prioritise their business focus (for instance, Archies decided to focus more on its own stores instead of franchisees at one point) and cope with economic turbulence. This will undoubtedly give them a competitive edge over younger players like IGP which is trying to disrupt the market with a technology and vertically integrated supply chain approach.
Interestingly, recent media reports suggest that Archies is rebuilding the business and shifting focus towards online operations. This is not surprising as industry experts think ecommerce will continue to be the chosen route even for industry giants in the post-pandemic years, given the convenience, safety and cost advantages required to grow globally.
The market out there will expand as well. Per a report by Business Research Insights, the gifts retailing market is estimated to reach $94 Bn in 2031 from $65 Mn in 2021, growing at a CAGR of 100%+. However, much of the business will happen omnichannel, raising the validity of the new offline store that IGP wants to set up globally. In fact, this could be a risky domain as the funding winter continues to hinder the growth of the startup ecosystem worldwide.
On the other hand, IGP and its peers may have an ace up the sleeve to thrive in a less-growth landscape. Classically speaking, an economic downturn could be the best time to enhance brand visibility and launch new ventures due to muted costs and less noise in the market. A recent study by Harvard Business Review also speaks in favour, and IGP could be in an advantageous position to expand its global footprint.
Other factors in favour will be knowledge and adaptability. The online gifting platform has already navigated a global crisis in the form of Covid-19 and can easily tweak its business models and offerings in tune with market demands. Add to that the emphasis on sustainability, AI benefits, robust logistics and customer-centricity, and brands like IGP are sure to resonate with the needs of digital-age customers. Whether they can become game-changers in a rapidly evolving gifting industry depends on their ability to convey appreciation through ‘personalised’ experiences.
