HomeShop18 to discontinue the recently acquired Coinjoos.com brand

afaqs! caught up with Sundeep Malhotra, chief executive officer, Homeshop18, to understand the intention behind the purchase of CoinJoos.com.

HomeShop18.com, the online and on-air retail marketing and distribution venture of the Network18 Group, has acquired a fairly lesser-known online books portal named CoinJoos.com, which was started in November 2009 by the Noida-based technology start-up called On-Graph Technologies.

In an exclusive conversation with afaqs!, Sundeep Malhotra, chief executive officer, Homeshop18, reveals that the company has plans to discontinue the Coinjoos.com brand and merge the books business of On-Graph Technologies with Homeshop18.com. Nitin Gupta, who is co-founder of On-Graph Technologies, will join Homeshop18.com as head of the books category.

Citing reasons behind the interest in the online books business, Malhotra says, "Though we ventured into full-fledged e-commerce business eight months ago, we started the books retail business recently. We now want to expand our books selling category, not because it will boost our top-line (revenue) significantly, but will drive and increase the volume of transactions on our site, and get us more repeat visitors, which will help us to drive sales of other goods available on the site. Also, our stronghold on books category will help us get new type of consumers, who are internet savvy and purchase products online."

Malhotra adds, "Acquisition of Coinjoos.com will give Homeshop18.com an easy access to technologies (like 'books recommendation' engine), which are essential in the online book selling business, apart from their books catalogue and inventory." Coinjoos.com owns a catalogue of 10 million books, the company claims.

It is estimated that the worth of online books selling business is around Rs 450 crore (in India), based on the estimation that up to 50,000 books are sold through internet everyday, at an average selling price of Rs 250 (per book).

afaqs! spoke with some industry experts to find out their opinion on Homeshop18.com's plan to acquire Coinjoos.com to beef up and gain share in the overall online books selling business in India. Commenting on the Coinjoos.com acquisition, Vishal Mehra, co-founder and chief executive officer of the books portal Infibeam.com, points out that acquisition of technology could be one of the core reasons behind the consideration of purchase of Coinjoos.com by Homeshop18.com.

Mehra says, "It's true that a book selling portal requires lot of technology and it's not easy to build that technology, especially when you have to sell hundreds and thousands of unique products (books). You need technologies like 'search across categories of books', 'books recommendation engine' and supply chain management technology."

Vijay Singh, founder, chief executive officer and managing director of Aaramshop.com, believes that Homeshop18, which already offers a cross section of products, including books, is not going after Coinjoos.com for the domain expertise. He says, "My guess is that what Coinjoos.com brings to the table is a user community and a top-line. There has been a clamour to shore-up top-lines across a number of ecommerce companies of late, and this move by Homeshop18 seems no different and may be aimed at further merger and acquisition options."

Kallol Borah, partner of the venture capital firm named HeadStart Ventures, points out, "The most plausible logic for Homeshop18 to acquire Coinjoos.com would be to acquire the existing customer base, investments in supply chain and to some extent, the technology and data on selling books online that Coinjoos may have accumulated. Since the average costs of acquiring customers and fulfilling orders would be higher than margins on average order sizes in an early stage business, I would think that the acquisition is presumably not based on profitability or net cash flows."

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