Chris George, a bike-enthusiast, is aged 25, and has a passion for music. The last attribute now sees him heading Easybuymusic.com—the online music distribution site that is making news. And so is George, the eCEO of the venture, as he has designated himself. At a time when dot-coms are floundering worldwide, this one is making money.

It was in 1999 that Arun Pai, who had spent seven years in Arthur Andersen advising such companies as Whirlpool and Samsung on market entry strategies, conceived a business model that would "capitalize on the inefficiencies of the music market". He discussed the plan with Rajesh Ayyar, a director of business consulting in Arthur Andersen. After a thorough analysis and almost two months of discussions with Arthur Andersen’s partners worldwide, Easybuymusic.com was born. Pai is an angel investor, and now runs his own company Passionfund out of Mumbai.

From Leh to Kanyakumari, music is an integral part of the Indian society, be it the melody of the classical ragas or the foot-thumping party numbers. But more than often, the distribution of a plethora of titles across the country is far from smooth. With the distribution chain of the $500-million Indian music CD and cassette market being rooted in Mumbai, the costs of supplying music products to retailers in far-flung cities and towns in north, east and south India becomes phenomenal. And if volumes are not there to justify the shipment, the costs even become prohibitive for distribution.

Pai was quick to see the opportunity in the prevailing scenario. After Arthur Andersen’s e-business incubation advisory services completed the incubation talks, Easybuymusic.com got angel funding, set up its e-commerce infrastructure, implemented the entire business, designed the organization structure and hired people. Easybuymusic.com was soon on its way to be up and running.

The commercial operations didn’t start till November 2000. Once they did, the venture turned out to be a huge success. The average daily sales have shot up ten times from a mere 40-50 to over 450 transactions in May 2001. And the target is 1,000 transactions per day in the next nine months, with profits ensured on delivery of each product.

Leveraging the brick

Easybuymusic’s business model is a mix of click and brick. So, what’s unique about the model? "We defined our business by the market, not the medium. What a pure online retailer does is define its business by the medium, which is the Net," says George.

Online sales on the site make up around 5% of Easybuymusic’s entire business. Otherwise it’s just another retailer—earning its money by selling music CDs and cassettes. George adds, "If you say you will sell only through the Net, you are immediately clipping the market. Just like a store the size of an airport hangar but with a small, six-foot door." The site scores over other music-selling sites like Fabmart.com, Takdhinadhin.com, Promusicfind.com and Themusicmagazine. com, which are purely online sellers.

Providing logistics to other sites is a logical extension of Easybuymusic’s business model. For example, it has taken over the distribution channel of Rediff.com’s music section. George feels that such measures will significantly help increase the company’s online business share from the present 5%. The company is involved in completing the transaction for all orders placed on Rediff—it sources the CD or cassette, processes the order, packs it, ships it and collects the money. George says, "Rediff is only an aggregator of music—not the source, only a catalog. When an order is placed, our supply chain gets intimated. We pay Rediff a commission for the transaction." "We power Rediff’s music section," says a proud George.