Why young Aggarwals dominate India’s e-commerce start-ups

The Economic Times,

As traders and entrepreneurs in the brick-and-mortar world, the Agrawal community has no mean reputation – it is prosperous and has proven its mercantile mettle over the centuries. Even so, the extent of domination by the community in the virtual world is astonishing, with the who’s who of e-commerce entrepreneurs drawn mostly from the ranks of the Agrawals.

Companies run by young Agrawal businessmen, among them Flipkart, Snapdeal, Yebhi, and Myntra, account for the majority of sales by e-commerce companies. And last year, for every 100 in funding for e-commerce companies, 40 went to firms founded by an Agrawal.

“In many families, we are used to having strategy for breakfast, accounts for lunch and operations for dinner from an early age,” said Chaitanya Aggarwal, 30, the founder and chief executive officer of Juvalia & You, an online shopping portal. An alumnus of Columbia Business School, Aggarwal worked as a hedge fund manager in New York before starting his businesses. “The blood boils differently in our community,” he said.

Some of the top names include Manmohan Agarwal, 42, founder CEO of Yebhi, Dinesh Aggarwal, 43, founder CEO of IndiaMART, Bhavish Aggarwal, 26, founder CEO of Ola Cabs and Gourav Aggarwal, 36, CEO of Savaari Rentals.

According to mythology, the Agrawals trace their origin to Agroha, a small town in Haryana, and regard King Agrasena as their progenitor. A Bania subcaste, the Agrawals are made up of 18 clans, among them the Gargs, Goyals, Bansals, Mittals, Singhals and Jindals.

The Bansal entreprenurs list include people like Mukesh Bansal, 37, founder CEO of Myntra.com, Sachin Bansal, 31, founder CEO of Flipkart.com, Peeyush Bansal, 29, CEO Valyoo Tech and IITian Rohit Bansal, 29, COO of Snapdeal.com. The Goels include IITians such as Deepinder Goyal, 29, founder CEO of Zomato, Ashish Goel, CEO of furniture portal UrbanLadder and Vibhore Goyal, 30, co-founder at CoCubes.com.

Businessmen from Agrawal clans are among the wealthiest in India and include the Bharti Group’s Sunil Mittal, Vedanta Resources’ Anil Aggarwal, and Naresh Goyal of Jet Airways. ArcelorMittal Chairman and Chief Executive Officer LN Mittal as well as Bobby Jindal, governor of the US state of Louisiana, also belong to the Agrawal community.

“The community has traditionally had a strong presence in trading. These (Internet) entrepreneurs seem to be playing on this traditional strength and applying it to the Internet age,” said Krishna Tanuku, executive director of the Wadhwani Centre for Entrepreneurship at the Indian School of Business (ISB) in Hyderabad.

While it is common knowledge that communities such as the Agrawals, the Chettiars of Tamil Nadu and the Moplahs of Kerala have excelled at enterprise, there is no academic research yet that has systematically studied their accomplishments.

But what is clear is that even among trading communities, the Agrawals have proven to be especially prolific at launching ecommerce ventures.

Estimated to number more than one crore, even those with a distinguished academic record end up starting their own ventures. “We are often good at calculations and accounting,” observed Vibhore Goyal, 29, an Indian Institute of Technology-Bombay alumnus and co-founder and chief technology officer of student assessment portal CoCubes-.com. “Kids from the community are more willing to take risks as they have seen its reward in the past.”

Rohit Bansal, 29, an IIT-Delhi alumnus who is co-founder and chief operating officer of Snapdeal, also pointed to the fact that previous generations in his family were all businessmen, so all he wanted to do was start a business himself. “We have the maths, finance and data skills that are extremely important for e-commerce.”

Even those working for companies tend to find out gaps in the organisation’s offerings and launch businesses very quickly to fill those needs. That is why it is not too common to find Agrawals as chief executives of Indian or multinational corporations.

RBI chair professor at the Indian Institute of Management-Bangalore, Charan Singh, said the success of Agrawals at business has nothing to do with genes and is more a factor of social interactions. “It can be likened to the Jewish community in the US that continues to hold top posts in the US banking industry. The success ratio is a factor of social interactions, based upon which finances are raised or marketing is done. A couple of successes in a community have potential to change its paradigm.”

Read more at http://articles.economictimes.indiatimes.com/2013-02-12/news/37059057_1_e-commerce-founder-agrawals