Excerpts from an exclusive conversation with Parry Singh:How did you hit upon the idea of this venture ?
My sister-in-law had to drive twice a month for 45 minutes to get to the Indian grocery store to buy Indian pickles and masalas. And many times ended up not getting all the required stuff. It is then that the idea of setting up a Net enterprise struck me. I knew I had to put together a Net enterprise where customers could shop for ethnic goods from the comfort of their homes. This was a project that I started with Subash Bedi, co-founder of ethnicgrocer. Two years after our MBA from Northwestern University ethnicgrocer was live on the Web.

What according to you makes the site a winner ?
The size of the market at $50 billion and the fact that there is nobody like us out there today. The market is poorly serviced by offline retailers and the prices they charge are very high, which helps to make a large margin and still achieve high volumes.

Both the front-end and back-end supply chain management of the legacy businesses are bad. There is no competition from any big offline retailer and the only competition is from small bookstores. This is what makes usa winner.

How are your revenue streams?
Some months revenues grow by as high as 80 per cent. In fact we expect to have annual revenues of $14 million by December 2000.

Can this idea not be replicated by another start-up?
Well we have a headstart and are more than nine months into the operation. To set up another venture like this, competition will have to set up an effective supply chain management system which is extremely difficult. They will also have to build an order fulfilment system for products sourced from all over the world. Many of the products that we source for Chinese, Latin American and the Indian community in the US are not even bar coded. These are some of the competitive barriers that a start-up has to face.

For existing big online grocers like Webvan.com or streamline.com it makes no sense to stock low-value items like pickles given the problems in sourcing. Online grocers have a decentralised order fulfilment system, which makes it uneconomical to stock low-value items. Costs of shipping can eat into the margins. Since ethnicgrocer does not sell perishable items it can have a centralised order fulfilment centre for the full country.

How is the venture funded ?
We have a total $26 million in venture capital funding and have been funded by two of Silicon Valley's leading venture capital firms-Kleiner Perkins Caufield & Byers and Benchmark Capital. Both venture capital firms have invested in Amazon.com, AOL.com, eBay.com, Excite.com, iVillage.com, Webvan.com, HomeGrocer.com and Drugstore.com.

How is your company structured ?
We have a total of four Websites-www.ethnicgrocer.com, www.namaste.com, www.gon -gshee.com and querico.com www. Namaste.com cater to Indians based in the US, www.gongshee.com targets the Chinese community in this country and querico serves the Latin American community. EthnicGrocer.com, on the other hand, brings ethnic food from around the world to the mainstream American audience. All the four sites share the same technology and order fulfilment system.

What are your future plans?
We have planned an IPO in the future and are also in the process of building sites and sourcing products for other ethnic communities like Korean, Filipino, Greek and Japanese. We are ramping up the technology on the sites and moving to the latest platform in the market.