Capillary Technologies Aims At 2x Growth In FY18

by Sohini Bagchi    Feb 28, 2017


Capillary Technologies, which offers CRM solutions to retailers, and helps enterprises grow their businesses by engaging with customers via omni-channel strategy, is betting big on Asian market, with India as the key focus. The Bengaluru-based company is planning to grow 2X by March 2018 looking at a whopping $50 million revenues target by next fiscal, said Aneesh Reddy, Co-founder and CEO at Capillary Technologies. In an exclusive interaction, Reddy tells CXOtoday about the gains in the omnichannel and offline retail space as well as shares the company’s ambitious growth plans over the next one year.

CXOToday: While most players are moving from offline to online, at present there’s a trend of online stores to establish their footprint in offline retail. Could you tell us how companies can gain from this?

Online-only brands have realized for conversion improvement, they would need physical stores (For example: high involvement categories such as furniture). In India, brands can thrive on making the best use of physical and online worlds. Increasing smartphone penetration and the use of digital payment has given an impetus to adoption of Omni-channel strategy. Both retail stores and online websites or applications have their own advantages; while a retail store can enable the customer to physically experience a product, the online space will have a great deal of convenience, and will offer a variety of products to choose from. The Omni-channel world combines the goodness of both e-commerce and retail stores.

CXOToday: Capillary Technologies has acquired Sellerworx and MartJack to strengthen their omni-channel portfolio. What are the gains in Omni-channel adoption in the retail industry? How did the acquisitions help Capillary?

We wanted an integrated suite that could help us inch closer towards offering the complete end-to-end omni channel solutions and services for our clients. Normally brands tie up with multiple vendors to plug the gaps in their omni-channel retail systems and processes. CRM solutions alone would not have helped us scale to a billion dollar valuation firm. Martjack, as a robust ecommerce platform, had a reputable list of clients for whom we could cross-sell our CRM/loyalty/analytics offerings. Sellerworx with its marketplace connectors and solution coupled with the digital marketing services and support helped us progress towards envisioning our goal of building an end to end omni channel digital / ecosystem. In a nutshell, the acquisitions has helped us and our customers immensely to unlock the power of Omni-channel retailing in a true sense. 

CXOToday: How is Capillary different from its competitors, considering the market comprises several big and well-established players in this space.

Capillary has everything a brand/retailer would need to succeed in the Omni-channel world. Our understanding of local markets and presence helps in building a product suitable for the region v/s bringing in a product built for the western world (compared to likes of IBM, Oracle, Salesforce, SAP). With a GloCal approach (Global Scale and Local Insights), Capillary has been successful in executing the strategy across its multiple offices - India, Singapore, Dubai, Malaysia, Indonesia, and China.

For a brand to stay relevant in the market, “time to market” is an important metric. Capillary delivers the project at least 2-3 times faster than SAP, Oracle, IBM or other big players in the market. We have a competitive advantage due to our integrated value proposition - strategy, solution and services offering - promising a ROI and business transformation outcome. This end to end ecosystem approach has helped us improve the stickiness of our customers.

CXOToday: What’s the role of chat-bots and how can they influence the retail and FMCG space?

We call Chatbots as 4th screen revolution after Web, Mobile Web and Mobile Application. Chatbot is a convergence of Artificial Intelligence and Omni-channel.  The retail industry thrives on “unique” and “personalized” customer experience and this will decide whether the customer would become brand/retailer loyalists. A chatbot is the perfect way to keep your customer engaged in real time, anywhere and on a massive scale by using the power of artificial intelligence and Natural Language Processing.

ChatBots can play a major role in making Customer service “great” by providing instant, relevant, automated answers in the go. Also chatbots can be useful in other stages of customer lifecycle through various use cases - providing a way to access their loyalty points, all valid coupons at any point in time, provide a slice of eCommerce experience or helping them with latest status of the order one has placed.  Chatbots are the future of Omni-channel customer engagement and commerce. 

CXOToday: What are the new trends in the Retail sector in the next 1-2 years; Do you see a difference from the last 12-18 months in terms of adoption of new tech and practices?

Advancements in in-store technology, artificial intelligence, chat bots, personalisation, loyalty, showrooming are some trends that are going to improve the retail sector to a great extent. While the world was obsessed about moving online a few years ago, the significance of a mixture of both offline and online is kicking back into the retail space. After a decade or so of focusing on building and optimising digital channels, retailers are turning their attention back onto the store as they seek to make the most of this relatively expensive asset.Bringing stores into the distribution network can provide retailers with previously unattainable flexibility. By treating stores as mini distribution centres, retailers can deliver true omni-channel shopping to their customers.

In addition to using store level inventory to ship orders to a customer’s home, it can also be deployed for click-and collect orders. With new fulfilment options enabled by the store, consumers can click, collect and return goods on their terms and at their convenience. Many brands have started experimenting with different formats and sizes by adapting to markets as they start moving up the value chain. Pop-up stores . Whether retail businesses like it or not, customers are demanding a combination of value, convenience and a unique experience. Although costs for implementing new technology would remain a major concern for brands, those who find the right balance between delivering great product value, superior customer experience and convenience would gain an edge over other brands or retailers.

CXOToday: Can you tell us about Capillary’s growth plans for the India market in FY18?
We have huge growth plans for the Asian market, with India as the key focus. Geography wise, we will focus and go deeper in India, Southeast Asia, EMEA markets. New markets will be Indonesia, Bangladesh and Sri Lanka. The company will also be foraying into Saudi Arabia, Indonesia and Thailand this year. Reddy pointed out that the company had forayed into China last year and the business there is scaling up rapidly.
Asia is a big market. The 11-12 countries where we are focussing on is an around $2.5 billion play. There are 6,000 large retail players with whom we can engage and we are probably at 1-2% of that now.
In terms of growth, we are planning to grow 2X by March 2018. In terms of verticals, we will continue to build newer and deeper solutions for existing verticals. Also, we will continue to build innovative solutions for manufacturing / distribution space such as B2B2C commerce with a focus on optimizing the supply chain.
The company will be investing about $4mn every year in new products and we want to build five new products in the next three years and will lead the space by taking an ecosystem approach for Omni-channel space. We will also continue to build new innovations in eCommerce, customer engagement and analytics space. There are many products in O2O(Online to Offline), Artificial Intelligence based Retail Assistant, Social Commerce, Machine Learning space, which are in the lab. The same will be disclosed very soon. We firmly believe each product will fundamentally be game changing. We already have over 100 third party systems integrated with Capillary’s solution suite and we will continue to integrate, add partners and eye more strategic acquisitions in the coming quarters.