The year 2000 was a roller-coaster ride for almost all dotcoms. At the beginning of the year, dotcoms were on top of the world, getting superfluous valuations, and therefore, more money than they could burn from various investors.

"An idea earned money", and angel investors, venture capitalists and institutions pumped in lots of money in a bid to be present in the "upcoming" market, and make some quick returns.

However, as anticipated, the dotcom shakeout started in the second quarter of 2000, and the crash followed.

While a few dotcoms have already vanished, more are expected to go bust. Reason: bad management, poor revenue stream and lack of support from investors to market the companies abroad, say sources. And, going by current market trends, many dotcoms, which also got branded as "doubtcoms" are unlikely to go back on top.

But the case of the Chennai-based Bharatplanet.com is different. It is not only surviving the shakeout, but is also going to break even by February end. The company will report a profit of Rs. 1-3 lakh, on a turnover of Rs. 20-25 lakh, says T. Chandramohan, Chairman and Managing Director, of the company.

In January, the company reported a net loss of Rs. 2.68 lakh, on a turnover of around Rs. 16 lakh, he said.

As of December end, Bharatplanet crossed Rs 1 crore revenue and is expected to touch Rs 1.5-2 crore by March. Says Chandramohan, “Bharatplanet's Q2 e-commerce revenue equals Rediff.com’s Q2 figures - around Rs 43 lakh. Bharatplanet is expected to equal or surpass Rediff.com’s Q3 e-commerce.”

With a single computer, working in free time, out of a small room in Chennai, Chandramohan, as a hobby, launched Bharatmail, a "postal mail" and "scan mail" service. The service was to help his college friends in the US to keep in touch with their loved ones in India, who then, did not have an Internet connection.

Other than the office hours at HCL Technologies, Chandramohan worked for over 10-12 hours, receiving mails through the Net, scanning them, and posting them to relatives / friends. He also sent out mail for them from India. The initial finance for the venture came from his own savings and from friends, he says.

An MBA in Systems from the Bharathidasan Institute of Management, Tiruchi, Chandramohan never realized that a hobby could turn out to be a successful business venture. He later left HCL to become an entrepreneur.

Following the good response for the services, Chandramohan started Bharatmart for NRIs to present gifts to their Indian pals.

For Chandramohan, the venture initially was successful in generating and increasing sales, but it was not profitable. While subscribers went up to 35,000, the overheads also went up considerably, as the services offered were free of charge, he says.

In phase two of the operations, the company, in November 1999, received a seed funding of $0.5 million from an angel investor, Nayan Jagjivan, of the Mauritius-based Medici Holdings.

The company identified areas of strategic focus for the business, and potentially significant and probable business risks, both immediate and long term.

Based on a study, Bharatmail was upgraded to a free e-mail service, and later a multilingual component (phonetics-based) was added to the mail service, making it a complete Indian e-mail service. The company on an average handles around 20 lakh mails per month, despite Internet penetration slowly catching up, he says.

The company also launched, healthcare, travels and expanded the online shopping. "We provided bouquets for as low as $1.99, compared to $25-30 the competitors offered. On the First day, 258 orders came from NRls, for delivering bouquets to their pals in India," says P. Sundar, a whole-time Director, and incharge of the company's health division and business development.

In the third phase, when the company was consolidating its operations, the dotcom shakeout began. Sensing the market conditions, the company reduced its expenditure, including spending on advertisements, and instead concentrated on profitability, and improving services.

Says Chandramohan, "We intended a second round of funding, but restrained from doing so, being scared of getting lower valuations, affecting the business."

Instead, the company concentrated only on profitability, and the result was that from September 2000, the overall margin increased to around 30 per cent. "Around 30-35 per cent margin on the turnover is breakeven for us," he says, adding that it would be achieved by February end.

According to Chandramohan, advertising revenue for the company, which currently is just over 10 per cent of the turnover, will increase in future. Following the dotcom shakeout, advertisers are chasing few sites, one being Bharatplanet.com, he says.

Currently, the advertisement slots in all the segments of Bharatplanet.com are full. The company keeps changing the slots for online advertising agencies, such as Intercept Consulting and BridgeOverTW.com, based on the volume they bring in.

While the industry standard for online advertising tariff is around Rs 150 per 1,000 impressions, Bharatplanet charges a premium, because of its NRI audience, he says, adding that the company's registered NRI subscribers (who visit the site at least once a month) is currently over 1.25 lakh.

"The first priority for us now is to withstand the shakeout. Even if we make loss continuously, we can withstand for a year, " he says.

Meanwhile, the company, as part of its expansion plan, will provide technical services, and also sell products to other sites, and companies. Further, the revenue stream has been bifurcated into technical services and dotcom. A few strategic tieups, and a couple of deals with banks are on the anvil.

The company has also adopted an effective way to expand the market, through customer referrals. Through a point system, Bharatpoints, users referring new customers, or buying a product/service from the company, get points, which can be redeemed in the site. The acquisition cost for every customer is around Rs 14, Chandramohan says.

The company also plans to promote its services in the US, with the opening of a marketing setup, and promote the site in places such as US Consulates and airports, targeting NRIs.

On the exit strategy, the company in future plans an IPO, and a possible Nasdaq listing. The company feels that with a strong second round investor to back up, it should be in a comfortable position to make it a successful IPO within the next two years.



Swot analysis



Strengths:
• Good growth in subscribers, from 30,000 in September 1999 to over 1.25 lakh in February 2001.
• Powerful and robust transliteration engine. The learning curve has been short on the technical front.
• One of the first few sites to have payment gateway - Cybercash and HDFC Bank.
• Associations with Arthur Andersen (consultants and auditors), Nishith Desai Associates, Oriental Insurance, Sedgwick Parekh Health
Management and International Air Transport Association.

Weaknesses:
• Poor marketing and promotion abroad
• Tieups

Opportunities:
• Continuous growth in NRI populations (currently over 20 million) as target segment
• Possible revenue stream from other areas such as money transfer, financial services, education through partnerships.
• Market medical insurance online and facilitate healthcare in a big way.

Threats:
• Competition from many players in areas such as mart.
• Big players "copying" the company's concepts and ideas and being able to market it better.