SAFFROANART.

COM ARUNKUMAR K 170305

PRATIK SARKAR 1703022
VISHNU KUMAR 1703041

About the company (Saffronart.com)

Saffronart was founded in 2000 by two entrepreneurs Dinesh Vazirani and his wife Minal. Both,
MBA graduates, decided to let go of their professional career and established this company
riding on their passion to establish a “lifestyle portal “.
Their ideal was to provide a platform for high end, exclusive art, fashion, health products from
India to a global audience. It was established purely on the personal interest on Indian art and a
zeal to make Indian art form popular to the global audience.
Presently the company provides an online platform where customers can view, purchase and get
engaged with the contemporary Indian art form. It also organizes auction events across various
cities like New Delhi, Singapore, New- York and Hongkong.
A global company with deep Indian roots, Saffronart was founded in 2000 on the strength of a
private passion. Remaining committed to this passion and personal values, today Saffronart is a
strong and successful international auction house that both embraces and drives change.

A platform for fine art and collectibles with over fourteen years of experience in auctions,
Saffronart is committed to serving the growing community of Indian collectors, while also
creating a cultural bridge to India for both the global Indian diaspora and the international
community at large. Saffronart has set several global benchmarks for online auctions and is the
subject of a case study at Harvard Business School.

Saffronart Auctions
Saffronart has held several highly successful online and live auctions, accompanied by physical
catalogues and preview events in cities like Mumbai, New Delhi, New York, London, Singapore
and Hong Kong. These auctions allow bidders around the world to participate simultaneously in
exciting sales. In October 2008, Saffronart extended its unique online auction platform beyond
fine-art to host its inaugural sale of Fine Jewels and Watches, adding a new dimension to its
market presence.

Since December 2011, Saffronart has offered Indian antiquities including sculptures, artefacts
and miniature paintings on its auction platform, in auctions conducted by Collectibles Antiques
India Private Limited. In 2012, Saffronart held its inaugural auctions of Modern & Impressionist
Art, Carpets & Rugs, Folk & Tribal Art, Art Deco and the Art of Pakistan, followed by its first
Travel & Leisure auction in 2013.
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In the same year, Saffronart held its first Live Auction in Mumbai, ‘Francis Newton Souza:
Works from the Collection of Keren Souza Kohn’, which combined room, online and phone
bidding. This was followed by two live auctions of Modern and Contemporary Indian art in
February 2014 in Mumbai. Saffronart recently held its 100th auction and its first live auction in
Delhi, which was a tremendous success.

With online and live auctions, a host of technology enabled services for clients, and a global
presence in Mumbai, New York, London and Delhi, Saffronart offers easy access and detailed
information on art, jewellery, collectibles and real estate.

Opportunities That led to the creation of Saffronart:

Saffronart started off purely based on individual interest and commitment towards popularizing
Indian art and was funded by Venture capitalist. Even though it was triggered by interest in Arts
that they studied in college, they also sensed some real opportunities in the market.
1. Indian art form didn’t have the proper category at that point of time. Most of the people were
not aware of the rich heritage of traditional Indian art form. There were very few exhibitions or
live auctions that was totally dedicated to Indian Art. There was a complete vacuum in that arena
which was up for grab.
2. The Primary Art market in India was not properly defined and structured. The gallery and the
artist didn’t share a strong business and growth-oriented structure and it failed to bring in buyers
and sellers to a single meeting point. None of the art galleries championed in art form and failed
to foster confidence in the artist. There was an absence of reputed Auction houses and most of
the interactions happened on personal recommendation and references.
Majorly access to the best of the creations of reputed artist were very restricted. Only strong
personal connections with the gallery owners could give access to the creations.
This was a major opportunity that founders of Saffronart sensed and utilized in a way to bring in
synergy and trust between the artist and the buyers.
3. The secondary market for the Indian art form was majorly dominated by creations of Mughal
and the colonial era. Mostly miniature paintings of Mughal era and colonial art forms had the
major share. Modern art was totally neglected and secondary market didn’t attach too much
value to it .
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PRATIK SARKAR 1703022
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4. One of the major factors that bothered this market was authenticity. Auction houses and
galleries didn’t fail to provide guarantee to the artworks. This trust factor provided an important
opportunity for any organization which can build up this gap.
5. Since these markets didn’t have a steady transaction happening, it failed to generate a steady
stream of revenue.
6. The market didn’t have a standardized pricing mechanism A proper benchmarking for pricing
was missing and Indian Art suffered due to this compared to the matured western art forms.
Dinesh and Minal saw a huge opportunity and they tried to establish Saffronart that can
consolidate the market for Indian art by introducing transparent pricing , genuineness and
authenticity of the Art forms. With economic liberalization happening in India, the market of
Indian Arts has not triggered the way it should have been with in line with the consumer
capacity. They could also sense a burgeoning demand of Indian Art in the international market.
So, Dinesh and Minal could sense a huge opportunity to establish a venture which could actually
fill up the gap and cater to the needs of both the buyer and seller of the Indian art.

Did Minal and Dinesh adopt the right business model to capitalize on this opportunity?
Saffronart was created with a mission to popularize Indian Art both on domestic and India
market though a mechanism of transparent pricing, authenticity and a platform where buyer,
seller and artist can come together for interaction. The industry was not structured and Saffronart
thought to fill up this Gap. They adopted a business model based on proper sourcing of authentic
product to a consumer base with structured price setting.
Consumers:
Saffronart started off in a fragmented market where sustaining of an on-line auction model in Art
forms was not clear. Considering the mindset of the customers, it was highly unlikely that they
will buy products of thousands of dollars by just looking at the internet. To mitigate this doubt
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VISHNU KUMAR 1703041

within the minds of the consumers Saffronart decided to put up art exhibitions across various
cities in the world and later on they established permanent art galleries in Mumbai , New York
and London.
These allowed customers to get a feel of the products and also be aware of the price before they
could go in and buy online and solved the problem of Pricing and authencity of the product.
The other major challenge for the Art Industry was the limited customer base of NRI and some
rich Indians. Coupled with that limited customer base and market was also not transparent. So
Dinesh and Minal took steps to mitigate the pricing and authenticity by creating high definition
catalogues with detailed description of the art form along with the biography of the artist. They
also decided to educate and motivate the customers and the physical art galleries and exhibitions
played an important role.
Good amount of time, energy and money was spent on capturing details of the art forms and
giving confidence in the minds of the customers.
Procurement of Art forms:
Procuring of Genuine art forms was one of the biggest challenge for Saffronart. Since it was a
new entrant in the market, gaining access to the best art forms was difficult. Initially the
collectors, dealers were too much hesitant to enter into an agreement with an online auction
company of a startup firm. They also had an inhibition that Saffronart might bypass them in
future and directly procure the art form from the artist , so trust issue played a huge role in
sourcing the art form.
But Saffronart, instead of being radical played a slow game of building trust and confidence and
got into agreement with best galleries. They were clear in terms of procurement and gave the
highest value to authencity and structured pricing of the product.
Pricing:
Saffronart gave much importance to bring in structured and transparent pricing in the highly
fragmented market. Lot of factors were kept into consideration when deciding on the pricing
front. They used a two pricing models, where the best of works was sold through auction to
gather better revenue streams , but the moderate items were sold through a fixed pricing model to
generate a constant revenue stream also.
Use of Technology:
Saffronart Leveraged the Dot com boom by bringing technology the segment which helped them
to have customer internationally. This allowed them access to a huge customer base. The Online
Bid tracking system also helped them to do a lot of data analysis to gain customer buying insight.
Diversification:
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They also diversified into contemporary Indian art which was gaining preeminence slowly in the
consumers. It not only increased their portfolio of offering but they found potential buyer among
the upwardly mobile young generation which contributed to the revenue stream.

What Have they done Right?

Understanding the market sentiments and trends- Increased internet users and change of
consumer behavior in favor of online portal.
Inaccurate theory of creativity: The passion driven business model when they explicitly study
what others have done for online business and presence of mind.
Established the credibility which is critical for business and ensured authenticity.
Ability to encash relationship for sourcing.
Reduced the employees from 50 to 26 but increased the sales by 70 times which reduced their
operational cost and increased the net profit.
Employees are the key assets of the organization
Identifying the occupied strategic positions of competitors and moving away from the cluster
gave them the competitive advantage
As the online auction was open for 3 days unlike traditional auction for few hours, it paved way
for Saffornart to have better and fair market prices as the bidders have more time to revisit and
increase the prices accordingly. This gives them better price points and margins.
What have they done Wrong?
1. Saffronart entered into a market space which generally didn’t have that many competitors in
the first phase, to say they had a first mover advantage. But from the case facts we couldn’t see
that they took any steps to increase the entry barrier. Naturally they lost the competitive
advantage to several other players like Sotheby’s, Christie’s and Osian’s. When these players
were aggressively building relationship for sourcing and procurement with the art galleries,
Saffronart was mostly focused on reducing commission of the seller. With more players in the
market, the buyers and suppliers had better bargaining power and less switching cost.
2. Saffronart main advantage was personal interaction and authencity of the products they put
into display or sold in auction or online. As they operated with a very small team , when the
market started growing they had difficulty to cater to the growing customer base.
What can / should they do now?
1. With increased competition from other players in both the Indian and international market ,
Saffronart should now think of expanding their portfolio of offering . Since most of the business
they do are in online they can easily scale up to other niche categories and not being only
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PRATIK SARKAR 1703022
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restricted to art forms. With the emergence of middle class , they can also offer high quality
home décor , jewelry , high quality dressing accessories.
2. They should also scape up their internal team and externa marketing agencies. To gain
visibility they can start endorsing different events where they could get more visibility and
increase networking contacts.
3. They could also think of improving their team of procurement as it is one of the major
operation of the firm.