Startup Mantra: Tech as the broker in this direct sales op

Sujit Jain is a 43-year-old “compulsive entrepreneur”, who began riding the crest of the IT wave in the late 1990s, by opening a “small computer training institute in Pune.”

That small institute as today grown into a direct-selling machine that claims numbers and growth that would not put a “buy-out” or IPO too far away.

“Netsurf has always functioned as a debt-free, self-funded company and is not looking for PE funding on an immediate basis. We will offer the Initial Public Offerings (IPO) once Netsurf achieves a turnover of 2000 crore. I believe that it will help us to take a giant leap and take the direct selling business to another scale,” says founder Sujit Jain.

The numbers (see graphic) speak growth. The business strategy on the other hand takes the direct selling model and leverages technology to offer rural sellers direct access to the urban landscape, and vice-versa.

Netsurf Network was incepted in 2001, which hardly makes it a startup in the true sense of the word, however, the continuous evolving nature of the Netsurf business and the challenges presented by the Covid-19 pandemic, have meant that the startup hustle has never really stopped for Jain.

Today, Netsurf Network direct sells herbal and organic products, personal care, cosmetics, home care, and its primary base from where it grew into the behemoth Jain claims it is today, agricultural goods.

In the beginning…

After completing his higher education from Symbiosis Institute of Management Studies in 2000, Jain was neither interested in on-campus placements like his peers, nor going into the family business heritage of jewellery, construction and legal advocacy. He aspired to open a small computer training institute in Pune. Setting off on his entrepreneurial journey, he developed a product that allowed a person with basic knowledge of computers to develop their own website. There was a key missing ingredient in Jain’s grand plans: funds.

Realising this, Jain implemented the strategy of direct selling, by informing people about the software. It didn’t take long for Jain to connect with 80 direct sellers. By 2002, the number of direct sellers increased to 40,000 with the company achieving a 500-fold growth. This was the beginning of Netsurf Communications.

Says Jain, “I was short on funds, but high on dreams and this was when our family friend, Sanjay Malpani, joined me and we, together, paved the way. In 2003, we acquired Ajay Bio-Tech, which was into manufacturing and research of organic farming products. Netsurf started distributing those products under the brand name Biofit, through their direct selling network. While the business operations kicked off from Pune, the network of direct sellers gradually spread across the rural regions of Maharashtra, Gujarat, Karnataka, and Madhya Pradesh.”

The Biofit USP is that of chemical-free farming, something Jain claims farmers were not aware of at the time.

“Through our direct selling model, we made them aware of organic farming. The current Biofit range of products spans 11 agricultural products. Today, one million farmers are using Biofit products,” claims Jain.

What does Biofit offer? The claim is “greater yield” and “a cut in expenditure on farming”.

“Biofit contributes 60 per cent of the current Netsurf turnover,” says Jain.

Fly high, and diversify

In 2004, the household segment beckoned. Netsurf launched its health and wellness category, with “Naturamore”. Today the range consists of 10 nutraceuticals in the form of powders and capsules. The company established Netsurf Research Labs in Parwanoo, Himachal Pradesh.

“Ninety percent of Netsurf products are manufactured by us and the composition is also developed by our R&D specialists. We also have a manufacturing unit in Pune and the sourcing of the materials is done from across India,” Jain explains.

Herbs and More: Started with six Ayurvedic products; today, range consists of 30 products

Rang De: Cosmetics line launched in 2019

While all of the success Netsurf has managed may well be because of the quality of its product line, it’s the direct selling business model that really enabled the sustainability.

Like Netsurf’s training and support system for its direct sellers, established in 2007, by which time, the number of direct sellers in its network had reached the half a million mark.

Netsurf also launched a personal care range under “Herbs and More”, to increase the participation of women in the business. In 2014, Netsurf launched its home care range, Clean & More, with two products. Jain drops all the right words while pushing his Clean & More line, “plant extracts”, “enzymes”, and “probiotics”. In 2014, Netsurf Communications made its first investment in F&B brand Woohoo. Jain is also an investor in Mylab Discovery Solutions, the company which developed India’s first indigenous testing kit for Covid-19. He now plans to acquire a fintech startup.

However, it was not until 2015 that the company crossed the 100 crore turnover mark.

All the healthcare products are approved by FSSAI. The personal care products are approved by the FDA. Organic farming products are approved by Ecocert. “Over and above the certifications, we regularly conduct the clinical trials, safety studies and field trials for our health care, personal care and organic farming products,” says Jain.

All the products are formulated in-house and only 10% products are manufactured at the third party currently. A QC team is employed at the 3rd party manufacturing units.

Covid-19 – turning crisis into opportunity

Says Jain, “Our direct selling business helped generate employment opportunities even in the rural interiors, where the maximum population (and unemployment) resides. It provided a solution to socio-economic issues like migration of workers in the shadow of unemployment, large scale-layoffs, the new normal of work-from-home and the insecurity around jobs. Our business allowed people to earn supplementary income at minimum investment and risks, by spending a few flexible hours every week. Moreover, they could earn additional incentives working from home, and thereby, seek personal growth.”

The tech-know

Netsurf developed its own captive e-commerce portal for direct sellers (e-tailers) who have opted for an online retail model of the business plan.

It’s a completely screen-to-screen model indigenised by the tech team of Netsurf, wherein direct sellers merely need to send their customised e-commerce link to the prospective consumers. It is a convenient model as it involves no capital blockage, and shipment and logistics is handled by the company. Direct sellers get their retail profits directly credited to their account.

Jain explains, “We also have a comprehensive mobile app which enables direct sellers to retail Netsurf products in their social circle. Netsurf Mobile app is loaded with content for sellers allowing promotion on Netsurf products on respective social media handles. Our direct sellers are adapting to the tech-based changes, especially the 20 to 35 age group.”

The Netsurf app currently is at 0.65 million downloads and accounts for 45% of the business generated.

Business expansion and future plans

Netsurf has five captive manufacturing facilities located in Maharashtra and Himachal Pradesh, with a total staff strength of 500.

These facilities undertake the manufacturing of Netsurf’s products. Raw material is sourced from various states of India, and a few are imported.

Jain said, “Organic fish farming practices. It will be sub-categorised under Biofit and will be called Biofit Aqua, an exclusive range of products that provides quality nutrition to fishes, shrimps, prawns, and crabs. These products do not contain any chemicals, pesticides, antibiotic, or hormones. It also ensures optimum quality and purity of water without damaging the environment. Organic fish farming practices ensure that we produce healthy, disease-free natural fish food. It also helps safeguard the environment from the adverse impact of harmful conventional Fish Farming methods.”

What vendors say

Usha Bhanushali from Maharashtra said, “I come from a traditional MLM business background and started my journey as a consumer of Netsurf’s products initially in 2014. I became successful within a span of 4 years and was blessed with the title of a ‘self-styled entrepreneur’ at Netsurf Network. I have mentored over 30,000 Asmita’s (female) direct sellers which today form an integral part of my network. I believe that the reward and recognition systems along with additional income avenues at Netsurf played an important role in me reaching greater heights of success at Netsurf Network.”

Amway, Herbalife, and Modicare are some of Netsurf’s main competitors.

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