Tiffin Service – Why not change the design of Tiffin?

Tiffin Service – Why not change the design of Tiffin?

Whenever I go in a new city to stay, after foodie escapades of exactly two week – when my digestive tract starts rejecting  everything I eat on road side ( be it a Baba ramdev dhaba at Nigdi,Pune or Chur chur naan at Gurgaon), I feel like booking a Tiffin service straight away for regular dinner. That will save my hell lot of time and on time delivery will ensure that I eat something to keep my motor running.

It works fine for first week. I feel eager to grab the Tiffin box from delivery boy and taste the food as soon as I get comfortable in the surroundings of newly occupied room. Then comes the second week and the turmoil begins again – I hate that look of Tiffin! Comes third week & my hands deny to plunge Roti in the ocean of dal! By fourth week my tongue joins the mood of hand and declares – No taste at all buddy. Then comes the sinking feeling – Is this what I am earning for!

All this has prompted me to begin a new topic for discussion about the Tiffin! Though it’s a personal thing for me but I guess there are others who suffer like me but can’t raise the red flag! Intolerance haters might return their awards citing a conspiracy against “Tiffin”. Still I am writing with a hope that a sensible founder will read this and will think along. I am simply putting a seed.

History of Tiffin

Tiffin is a word with Indo-English origin which earlier refereed to a light meal. Its definition over the period of time has changed and now it’s a well known name for lunch boxes, and dinner boxes. It contains 3 to 4 small size boxes stacked together with help of a structure. This stacked structure is either used as it to deliver food or is kept in another shining plastic cover up box (whose color faded away earlier than the whistle of cooker).

Tiffin Content

What has to be kept in tiffin is fixed – a curry, chapatti and dal. Four boxes restrict the addition of any other content, though to the respite of Janta – curry could be either veg or non-veg as per demand. And in case you want something else, you need to get one of the contents replaced by the one of your own choice.

Famous Tiffin Service Providers

Mumbai dabbawalas are an organization which delivers homemade food in tiffin to the subscribers. Foodees and Spicebox are few more names in this domain. In every city you will fine hundreds of tiffin service providers and content everywhere is same – Dal Chawal Roti & curry.

FS Labs - Why not change the design of Tiffin

Now let us discuss why I felt like stopping the tiffin service after 4 weeks?

Tiffin service providers do a good job to provide a solution to the dinner and lunch; here are certain points which I noted down when I got served for dinner by Yadav Tiffin service

  • Tiffin has only four boxes, what if I want to have chutney or salad or a sweet or lassi or butter milk?
  • Most of the times I got mixed dal. There was nothing like a yellow dal or dal makhani ever on special days.
  • Curry (Veg) was same thrice a week and that too the cheapest item in the market.
  • I hated the way in which roti was kept. Folded and without butter. Sometimes I found it tough to chew that thing.
  • Plastic cover in which the tiffin was stacked often had a dull look. It was too dull in color to attract me to open the same.
  • And the amount charged for the service was decent enough – 100 Rs/Day.
  • There was never a call for feedback though they charged proactively at the beginning of month.
  • There was never a regular guy for delivery.

Considering the volume of the public which depends upon the tiffin service, it’s very difficult to digest the fact that there has never been any discussion on changing the size of tiffin. Why only four boxes? Even if there are four boxes then why not increasing size stacked one below other so that bottom most tiffin could accommodate more than one or two food items? And why none of the service providers ever try to serve something customer pleasing? Is it all about serving “cold, least tasty, just for serving, without any lure” type of food to those subscribers whose health is dependent on tiffin service?

So what is the scope of improvement in tiffin service?

[A] Changing the design of tiffin – From a classical “stacked 4 box kept in a plastic box“tiffin we could get only basic food requirement fulfilled. If we wish to make food delicious for the subscribers of the tiffin service, change in the design is need of hour.

A possible design can be – All four boxes have increasing size from top to bottom, and bottom two boxes with bigger size and partitioned into two half could possibly add two more compartments in a tiffin box. Salad and chutney along with some sprouts/ fruits could be included in the service. This will definitely add some value to the tiffin.

[B] Changing the menu – There are customers who are willing to pay good for a healthy and delicious food. Serving them with same curry thrice a week is like killing your own business. Nobody is stopping the service provider to look for veg or non-veg items which are in middle or top level of price chart. Planning the content for whole week in advance will help in managing the show in a better way. Customer will get variety and owner will be able to manage funds.

[C] Customer feedback is must – Nobody can force any product on customer. He is the king. Staying in touch of customer once in a week/ once biweekly will be suffice to keep the interest of customer intact on tiffin service provider. A little personal touch can do wonders to the tiffin delivery service.

[D] Add additional items in service menu – Health is dependent on food. Additional food items which are good for health could always be included in the tiffin service provided the service provider asks customer for preference.

[E] Special day should not be on the weekends – Most of the tiffin providers serve special food on weekends. Problem with this is – generally most of the crowd goes outdoors for parties etc on weekends. One Extra meal with too much luxury is not the requirement of customer. He will not be able to appreciate the content and neither will he be able to enjoy the food.

On the other hand if special day is on middle of the week, customer will be able to enjoy the food to the fullest.

[F] Plastic Box could be made attractive – What is being noticed first by customer is the Plastic cover box. The cover box could be made more attractive for the purpose of keeping customer’s hunger alive.  Its cleanliness is again a mood maker for the customer. Small things count and this will ensure that service provider will not lose customer in 4 weeks.

[G] Let customer decide what to eat – Another extension could be to get menu from customers beforehand. But the demand should always be from the variety of items present in your menu. Service provider will be able to plan his inventory in a better way and will be able to serve customer as per the requirement. This way the association between customer and service provider gains better bonding.

So as per FS Labs outlook, for Tiffin service providers it’s important to keep service interactive. Any side misses the interaction; chances of long term association are very less.

Transportation Startup – Generic Analysis

Transportation Startup – Generic Analysis

With advancement in technology and lifestyle, the basic requirements of life have introduced a lot of verticals apart from “Roti, Kapda and Makaan (Food, Clothing and Shelters)”. Transportation, communication, health, entertainment etc have become an integral part of the basic needs of human life. If we analyze all of our activities of day to day life, the ultimate aim of each come to only a small list of basic needs of our life.

Startups that are working to fulfill these basic necessities are having greater chances of market acceptance and success probability. As explained in our previous analysis “Startup – Roti, Kapda aur Makaan”, startups are trying to capture each of the vertical of these basic necessities. Also as per our analysis of extended needs of human life “Startups Fulfilling the Extended Basic Needs”, all of the possible modes of transportations are attracting startups to execute their business models. Air, Train, Bus, Cabs, Daily Bus Commute, Self-drive cars etc, startups are trying to capture all of the areas of transportation. Ola, Uber, Meru Cabs, Easycabs, Taxiforsure, Megacab, Quickcab, Getmeacab, Taxi24x7 are some of the well-known names of transportation startup.

First Cut Planning of Transportation Startup – Here is FS Analysis on starting a transportation startup, the key points that need to be thoroughly analyzed prior to execution –

FS Labs Transportation Startup - Generic Analysis

[A] Type of Service – The first requirement is the selection of service that you are going to provide. Few of business models associated with transportation startup are as follow

  • Taxi on demand
  • Self-drive Car Service
  • Daily Bus Commute
  • Car Pooling

So the selection of service is very crucial as per the requirement of consumer. Mixed model could also be started based on the expected market base.

[B] Development of Self or Market Based Model – The business model of transportation startup is completely dependent on the vehicles. So the model could be made either self-developed or market base.

  • Self-Financing – Investing a huge amount of money into a new business model is risky. Though it increase the reliability and availability of vehicles, but the opportunity cost and return on investment is limited.
  • Aggregator Model – Getting small players on board is less risky in terms of money investment, but it increases the complexity of the system.

So the best strategy is to develop a market based model in the initial stage and then developing your own fleet based on demand and reliability analysis of market based model.

[C] Selection of City – The prerequisite to start a successful business of transportation domain is selecting an area where people are ready to accept your business model. A city where local transportation is very frequent and people are struggling with mediums of convenient transportation is the ideal location to start with. Concentration of Industries, corporate offices, tourism, and city inflow are some of the factors that conclude an area to be suitable for transportation startup.

So FS advises founders to be very careful while selecting an area for your operations. A very posh area where people prefer to travel by their on vehicles is not a good choice for transportation startup. A very poor area where people struggle for their daily basic needs will never support your concept.

[D] Area and Route Selection – Once you have decided suitable city for your transportation startup, the next step is to map the routes that are in frequent use.

If your transportation is completely based on consumer demands, the mapping of routes is required to estimate the required number of vehicles or trips to fulfill the expected demand of consumers. If your transportation is public and the control of routes is in your hands, the mapping of routes is required to estimate the number of maximum users and hence the enhanced revenue generation in each trip.

Here are few tips for route selection-

  • Residential areas with large working population
  • Market, Railways Station, Bus Stops, Airport, Industrial Hubs
  • Routes with maximum traffic
  • Area with less competition but sufficient demand

[E] Market Competition Analysis – The most crucial step while selecting a business model is to analyze the level of competition that you are going to face once you start the execution of your startup. So check for all the direct and indirect competitors working in your area.

Small startups can easily be managed by providing better user experience with the service. For big players that have sufficient resources to kick you out of the market, FS advices to modify your model so that they can acquire you.

Read here more about the market competition estimation and handling tactics.

[F] Legal go-ahead – Transportation startup requires a lot of legal work based on the government rules and regulations. So it’s always suggested to check the specific rules of your selected area and plan your business model to remain in legal limits. Few of the legal approvals involved in transportation startup are as follow –

  • Drivers’ License
  • Business License
  • Insurance (vehicle as well as business)

So check for all the rules and regulations that are applicable for your business model and contact the agencies that are doing these works.

[G] Getting Required Team- To run a startup successful a strong team is mandatory that have all the required skill sets. The best strategy to map the manpower requirement is by planning the entire work structure for your startup and the skill sets required for each of the activities. For transportation startup, following staff are required based on the skill sets-

  • Technical Staff
  • Call Centre Employees
  • Operation Managers
  • Fleet supervisor
  • Drivers
  • Marketing Staff

FS advises to select the team based on skillsets or if you have already developed a team then assigns the roles based on the skillsets of individuals.

[H] Parking and Operation Area To manage the entire fleet of cabs, buses etc a proper parking space and operating point is required. Based on the market needs and fluctuations in terms of changing demands, rush etc, the reserve fleet is always required to manage the smooth flow.

So FS advises startups to manage their supply chain by ensuring the proper operating and parking space for their fleet prior to execution.

[I] Website and App Development – Website or App is the distinguishing feature from the traditional ones. A website or app with interactive user interface always attracts consumers. You need an App or Website prior to execution, to check the loopholes of your system.

Also, the website or app developed prior to execution helps in initial marketing.

[J] Payment Options for Consumers – Payment options for the service should remain flexible to cover all kind of consumer base. For eg: old age person are sometimes not comfortable with the card or wallet payment system. So, it’s always better to include all of the payment options in your model and develop a flexible system. Following are the payment method that should always be there in the system-

  • Cash
  • Debit/Credit Card
  • Net Banking
  • Wallet System

[K] Marketing Strategies – Marketing of transportation startup is required to let people know about the new service in the market. You should directly engage with your consumers to let them know about the benefits of your business model. Press, Media, Social Networking etc should be included in marketing strategies.

[L] Protection of Consumer Data – Protection measure on consumer data shall be the major priority if you are incorporating your own payment gateway.

Also, the safety of consumers is major focus area for transportation startups. Uber has always been in news for the safety issues. So to develop a setup that is concerned towards passengers safety is the initial part of startup execution.

[M] Revenue Model and Pricing – Ultimate aim of any of the business model is to get the return on investments in short run and generate profit margins in log run. In case of Transportation startup, the revenue is generated by the cost of service that customer is going to pay. So the revenue model should be designed in such a way that the running cost should be covered by the cost of service itself and the profit margins should cover the fixed cost as well.

Suppose the Fixed cost of initial set up = A

Running cost per user = B

And the Cost of service per user = C

Hence the break-even point i.e. the number of trips used to get a stage of no profit no loss = A/(C-B)

If you align this number of trips / service usage with number of vehicles, number of trips and the number of users, you will get the actual timeline of your break even.

FS advice to entrepreneurs is to keep the pricing of their service in the following manner –

  • Initial Stage – The target at initial stage should be to capture the market and infiltration in the market share of other competitors. The best strategy for the same is to keep the cost of service as per the competitor cost along with some extra discount to attract customers. For example – Every 6th trip would be of additional discount.
  • Progression – Once you have captured the sufficient market base, the major focus should be on profit generation. The running cost along with some profit margin should start reflecting at this point in time in your accounts. One of the strategies is to keep the promotional discounts minimal and enhanced profit margins than initial stage.
  • Saturation – At saturation stage the focus should get shifted to keep acquired the loyal consumer base and start getting back your fixed cost along with the running cost. The cost should be realigned at this stage to keep your business model profitable. For eg- quarterly revision of the cost etc.

[N] Expansion Planning – The key factor of a successful business model is its scalability in long run. Sustainability of business model aligned with its scalability leads towards actual success of the startup. Nobody wish for the “TinyOwl Unplanned Expansion – Hiring and Firing Saga”. “Growth for the sake of growth is the ideology of the cancer cell” – Edward Abbey, American Author and Environmental Advocate.

So FS advises entrepreneurs to expand their business model with proper planning aligned with the resource availability.

FS Outlook – Startups have only two major objectives in long run:- [1] to become leader of some domain and acquire the other startups to expand their business model. [2] to become expert in some vertical and getting acquired by big players.

So if your target is to become leader of your domain, then the major focus should be on loyal consumer base and eliminating the market base of other players. If your target is getting acquired by some big player, then FS advises to carefully study the acquisition trends of big players and based on that trends anticipate their potential acquisitions in future and develop your business model accordingly.

One major point that entrepreneurs should keep in mind while starting a transportation startup is that the big players never look for the same business model, they have sufficient resources to kick out other small players, so think of an addition to their business verticals, become expert in that and then approach for getting acquired.

Wish you luck for your startup. Stay tuned with FS Labs for more updates.

TinyOwl Firing Saga – Lessons for Small Startups

TinyOwl Firing Saga – Lessons for Small Startups

As highlighted in our previous analysis of “Startup – Hiring and Firing”, the requirement of manpower increases exponentially during growth phase when the target is to make startup presence visible in the market and reduces considerably when startup enters into its maturity or stability phase when the target shifts towards operational excellence and profit generation. The reason why growing startups like TinyOwl and Housing are in news since last few month is not because of their success meters but the rapid changes in their organizational structures. If the rapid growth and expansion dependent on funding are to be considered reaching its limits, the maturity phase of these startups is getting started and the requirement of manpower is getting down.

TinyOwl Firing Saga has developed a lot of lessons for startups. FS has comprehended few of those critical issues that are helpful for entrepreneurs.

FS Labs TinyOwl Firing Saga - Lessons for Small Startups

 

[A] Copy the Concept with Brain

Steve Jobs once said for Microsoft “Microsoft has had two goals in the last 10 years. One was to copy the Mac, and the other was to copy Lotus’ success in the spreadsheet – basically, the applications business. Over the course of 10 years, Microsoft accomplished both of those goals. And now they are completely lost.”

Microsoft has always remained in light because of its image of copying Apple, in spite of all these controversies, Microsoft has always been able to manage its market share because of its strategies to penetrate into the market volume of other players.

Same happened with TinyOwl, the concept was not new, and so the success parameters were limited to the operational excellence, market acceptance and geographical area selection.

Here are few lesson for small startups regarding the startup idea selection and evaluation –

  • Exact Copy – If your startup concept is an exact replica of existing platform, product or service, check whether the targeted market is ready to accommodate one more platform . If the other players are limited to particular features, products or geographical locations, you can easily build your loyal customer base without their interference. If the other players are dominating or having sufficient resources to penetrate into your customer base, the chances of your success are limited unless you prove yourself better than those big giants.
  • Copy with Some Additional Features– If your startup concept is an extension to the existing concept i.e. you are having some additional feature to add to existing platform, product or service, the success probability is limited to the fact that how well your target customer accepts the extra features in that product.
  • New Concept–if your startup concept is completely new, the best strategy for idea evaluation is by making a “Startup – Prototype” and getting feedback of targeted market volume on that. The benefit of creating a prototype and then developing a full scale product/service is that it reduces the risk associated with new concept acceptance and provides guidelines for large scale execution.

Read here more about startup idea selection.

Read here more about startup concept evaluation.

[B] Remain Clear on Startup Vision

“Action without vision is only passing time, vision without action is merely day dreaming, but vision with action can change the world.” –Joel A. Barker

Every idea has a short and long term vision. Whether you are preparing for a competitive exam or studying some of the famous books, there is always a goal in your mind, either to crack the exam or getting wise.  Most of the entrepreneurs have to major long term objectives in mind for their startup concepts –

  • Getting bigger and bigger day by day and become leader in some domain
  • Becoming expert in some vertical and getting acquired by some big player

Same is applicable for TinyOwl, whatever may be the short term and long term vision of their founders, but FS Labs is pretty sure that their short and long term market capturing strategies were not in line with their future goals.

If your target is to become the leader of some domain, the focus factors should be operational excellence, market penetration and capture, timely funding and a sustainable expansion. If your target is to become a support to some of the existing players, the focus should be on market capture, loyal customer base and uniqueness of the feature (in terms of it development and customer trust).

[C] Know the Competitors Very Well

“Take the initiative to ask your customers what they think than to wait for your competitors to do it.”John Wechsler Co-founder, Formspring.

Market competition is the biggest challenge for any of the startup. Whatever may be your domain of startup, other players are always there to stop you in penetrating their market volume or creating a new customer base.

TinyOwl’s is not a completely new concept; this market of INR 89K Crore has almost 120 startups in competition out of which 60 started in 2014 only. Leading player of the market has been Foodpanda, Zomato & Swiggy.

Foodpanda already has strategic partnership & investment in Swiggy. It is looking to strengthen its presence everywhere to fight a global battle with Zomato. Most of the investors are already aligning themselves and are less interested in investing into a venture which ultimately going to get acquired in name of sector consolidation. Facing too stiff competition, TinyOwl has not been able to raise enough funds to run its operation after unplanned expansion.

TinyOwl has also burnt huge cash in promotions and advertisements. But on this front also, Foodpanda and Zomato are always in better position due to unlimited fund availability with them. As per FS Labs, for better understanding of startup market competitions, we can categorize the competitors in three verticals –

  • Level 1 – Same Domain Startups with Limited Funds and Reach
  • Level 2 – Same Domain Startups with Huge Funds and Moderate Reach
  • Level 3 – Big Players getting Diverse

FS advises startups to overcome the level 1 competition by achieving operational excellence, enhanced consumer relationship management, level 2 competition by market penetration strategies and level 3 competitions by evaluating the market trends of acquisitions and growing your business in that direction only.

Read here more about the startup competition analysis and handling tactics.

[D] Move ahead with Proper Plan

“A Goal without a plan is just a wish”

For converting an idea into a business model, a very essential element is the planning of your future today. Without a defined frame work for your objectives, all that happens is you start beating around bush. Though they have started a bit late, TinyOwl firing saga is an excellent example of having plans for their future, the alignment of resources as per the need and the changes in model to enhance profit margins.

Any activity has five phases during its lifecycle: Initiation, Planning, Execution, Monitoring & Control and Closure. The knowledge areas involved during these phases are Scope, Schedule, Cost, Quality, Communication, Manpower, Procurement, Risk and Integration. So founders must plan every activity beforehand aligned with the available resources.

Now that TinyOwl has learnt its lesson, let us see if they could plan some magic to turn around the situation.

Read here more about the resource planning of startup.

Read here more about the knowledge area of startup planning.

[E] Expand the Business Model as per Market Need

“Growth for the sake of growth is the ideology of the cancer cell.”- Edward Abbey, American Author and Environmental Advocate

Most startups start from a city and do exceedingly well before targeting an expansion into other cities. Basic of expansion is clear. Either your single city operation generates enough funds to serve your operations during expansion to other base or you have enough funding to start operations altogether in a new city.

TinyOwl secured timely funding but methodology which they followed was not up to the mark. When they secured $50 million funding they announced about targeting expansion in 50 cities. Where they actually spent the money was on promotions and marketing. Customer volume definitely surged because of the promotional offers, but it was not a loyal customer base. Expecting that large number of investors will be attracted toward investing in TinyOwl, its founders gambled to open new bases in other cities as well.

In fact TinyOwl has offloaded its delivery service as well and that required searching a new delivery player in each city where it planned expansion.  It requires investment other than the operating cost of TinyOwl only as funding of delivery players is also a responsibility of TinyOwl.

As per FS Labs, Market expansion should be carefully planned and should happen only if founders are able to see light at the end of tunnel. This could be in form of – securing positive operating margins and support of investors.

Wish you luck for your startup. Stay connected with FS for more updates.

Startup – Roti Kapda Aur Makaan Extended – Travel, Talk, and Health

Startup – Roti Kapda Aur Makaan Extended – Travel, Talk, and Health

As explained in our previous analysis Startup – Roti, Kapda aur Makaan that the place, context and priorities of the human beings are extremely important in judging the value of the product or service. There are other needs and services which were earlier in the least priority list of common man as He was busy in fighting to complete his basic needs. With influx of money and exposure to evolved technology, now common man has access to ” One button solution to every need – basic or other than basic. Startups working in domain of fulfilling these extra necessities are having more probability of success and high acceptance limits.

Roti, Kapda aur Makaan – food, clothing and shelter, are defined as the basic needs of human life yet with advancement in technology and enhancement in life style, this list of basic necessities has introduced more verticals into it. Can you imagine living without your cell phone, or without internet connection or without your laptop? Answer is definitely “a big no”.

Startups are trying to fulfill these extended basic necessities of human life through their business models and market capturing strategies. Just think of any of the extended needs of your life, search on internet and it will give you a list of startups ready to look after those needs. Say, your car/bike has broken down and you are getting late for your office, what alternatives come in your mind, book a cab using Ola or Uber or book an auto using Jugnoo, and the nearest cab/auto will be at your door step to take you to the desired destination.

Here is FS Analysis of startup – fulfilling the extended needs of human life.

Transportation

It defines the need of short or long distance journey for personal or official purpose. Whatever be the mode of travel or need, a lot of startups are working to fulfill the transportation need of human life.

FS Labs Travel Necessity - Startup Models

Travel segment can be divided into following groups –

1.Air Travel: It has become a basic need for business work, holiday plans, medical emergencies, leisure trips, overseas studies etc. A lot of startups are working and providing a great facility to compare all the available flights as per need and further requirements like hotel booking, travel planning etc. Goibibo, Yatra, Makemytrip, Cleartrip, skyscanner, kayak, Expedia are some of the known startups that are working in domain of air travel management. Though airlines like Indigo, Jet airways, Go air, Spice jet, Air India are having their own portals for ticket booking yet websites like makemytrip etc are more famous because of the deals which they provide.

2.Train and Bus Travel are essential requirements of domestic travel. Goibibo, Yatra, Makemytrip, Clear Trip, Redbus, Abhibus, Paytm, Busindia etc are working to provide you easy booking of trains and bus.

3.Cabs have become a nice alternative for travelling. Ola, Uber, Meru Cabs, Easycabs, Taxiforsure, Megacab, Quickcab, Getmeacab, Taxi24x7 etc are the known names in the field of car services. The high competition in cab service provider / aggregator has forced the players to come out with lot of innovative way of attracting customers. Though the security and trust is still a big challenge for these service providers/ aggregators, comfort to the consumer due to these services is appreciable.

4.Daily Bus Commute is a rising area to attract daily passengers with the comfortable and affordable daily travelling. Ola Shuttl, Shuttl, Zipgo, Cityflow, rBus are solving the issue of daily travel by introducing their traveler bus services.

5.Auto RickshawAutowale, AutoRaja, mGaadi, Jugnoo are Uber of auto travel. These startups are bringing autos and auto rickshaw drivers on one platform to make it easier for commuters to get autos at the standard rates.

6.Car-pooling -Those who are environment concerned users or want an economical option, Bla Bla Car is there for car-poolingwith people travelling on same route and time. Social network profile integration, mutual rating, scrutiny of all the data like profile, photo, comments etc. are the major driver of making car-pooling a secured and trusted option. Travel group Ibibo has also launched its app “Ryde” for carpooling. Uber is also in the race of peer-to-peer business mode by introducing ride sharing service.

7.Self-drive car service based startups are also making a big entry in transportation market. ZoomCar, JustRide is the known name of self-drive car service providers.

8.Bikes/ Cars purchasing & selling is an organized market base and a lot of startups are trying to align with the customers requirement and segment need. CarDekho, Vroom, Shift, Beepi, Spinny is working in domain of used cars. Olx, Quikr has already established their market place of used car/bikes selling portal along with other products. BikeWale, Bikedekho are working specifically for used bikes selling and purchasing.

Communication

Flow of information is the next big necessity of life as every inter related activity requires the communication among all the involved stakeholders. Whether it’s being an official communication or personal talk or any other information flow, all needs some medium to reciprocate that communication.

We can divide the communication based need into following subgroups –

1.Devices: Required for communication like cell phone, tablets, laptops etc are available at all the major e-commerce startups like Flipkart, Snapdeal, ShopClues and Amazon. Online mobile sale has become an instant hit. Few companies are getting benefitted by the surging demands through flash sale.

2.Recharge: Lucrative recharge is supported by the tremendous amount of money which investors are putting into Indian startups market. Day by day mobile penetration is increasing in India and hence the requirement of being connected. Freecharge, Paytm, RechargeGuru, talkcharge and Mobiwik is there to recharge your cell phone with a few clicks.

3.Deal for Recharge: Grabon, Paytm, CouponDunia, DesiDime etc are there with many lucrative deals if you become their reliable customer.

FS Labs Communication and Health Necessity - Startup Models

Health Care

Health is also one of the most essential necessities of life. Hectic lifestyle, food habits, future stress, less physical work are some of major reasons that has enhances the dependency on medicines and doctors more than ever. Startups are also working to fulfill the need of health care in life. Macro factors like increased income, double income groups, increased hospitalization needs etc are resulting in an explosive growth in home health care

Health care segment can be broadly divided into following subgroups –

1.Doctor Search & Appointment–

Practo has B2B software product (Practo Ray) that is tightly integrated with its much loved consumer offering (Practo Search), creating the world’s first and only healthcare hyper loop that is connecting the entire healthcare ecosystem. Recently it acquired Qikwell to strengthen its patient, doctor and front office staff’s synchronization. The acquisition also makes Practo the world’s largest appointment booking platform with nearly 40 million appointments managed every year.

Taking the industry by storm is ZocDoc which is into businesses of scheduling doctor appointments, as well as making doctors more accountable by having patients publicly rate them. The company makes its money by charging doctors $250 a month to list their practice. It lets patients find a doctor easily, set up appointments and rate their experience. Well-rated doctors then attract more patients and attention from ZocDoc’s more than 700,000 monthly users.

Dailyrounds is doctor network App with 160,000+ Doctors. Docplexus is web network for Doctors. Curofy is for doctor referral app. Ziffi, Zipnosis, Sugarerica, Docsuggest, and Helpingdoc are few other names.

2.Online consultation and Q/A-

Healthcaremagic & doctorspring are leading the chart for his service. Mdhil provides online & app based awareness to people for living a healthy lifestyle. Medianangel with a unique concept of “Global Hospital” bridges the gap between patients and doctors. Pinkwhalehealthcare is there for online consultation with doctor.

3.Patient care platforms –

Care24 – offers services such as home care visit by a nurse, a physiotherapist and an attendant or for infant care.

Mira Rehab – provides a software program that uses medically approved games to accelerate rehab for patients recovering from an injury or surgery

Navigene – This Company screens newborn babies to detect at least 100 genetic disorders. It collects their urine samples from hospitals across six major cities and tests them at its lab in Thane (near Mumbai), offering results in 48 to 72 hours.

4.Medicine E commerce

HealthKart delivers the medicines at your doorstep.

Healthvala & medplusbeauty is there for same purpose

FS Outlook

As explained in our earlier analysis “Startup Idea Selection”, the best approach to choose an idea for startup is the selection of a problem and reverse analysis of its solution. So FS advices to all the startup enthusiasts to find the difficulties faced by mass for their basic or extended needs, and provide a better solution for the same.

Wish you luck for you startup. Stay tuned with FS for more updates.

Startup – Roti Kapda aur Makaan (Food, Clothing and Shelter) (Analysis 1)

Startup – Roti Kapda aur Makaan (Food, Clothing and Shelter) (Analysis 1)

In 2007, Washington Post did a social try-out with prominent violinist Joshua Bell to understand the context in which the perception and priorities of human beings change. On a busy weekday morning, Joshua Bell was playing the violin in the corridor of a subway station in New York. He was using a violin worth 3.5 million dollars (made in 1730). He played a few Bach pieces for about 45 minutes. During that time, thousands of people crossed to walk by their normal pace. He collected $32. When he finished playing and silence took over, no one applauded, nor was there any recognition. Few days before, Joshua Bell was sold out at a theater in Boston, and the price of an average ticket was $100.

Through this experiment, it was realized that the place, context and priorities of the human beings are extremely important to judge the value of the product or service. In normal day to day life people are occupied so much with their basic necessities of life that the appreciation for other things is very less unless concentrated focus is only on that.

Roti Kapda aur Makaan (Food, Clothing and Shelter)

Roti, Kapda aur Makan – these three words define minimum necessity of a human life. This phrase has an interesting history – Zulfikar Ali Bhutto (Pakistan) and Indira Gandhi (India) popularized this phrase during the general elections in late 1960s. In Early 70s Indian cinema industry produced a blockbuster with same name which boosted career of cine star Amitabh Bachchan. Down the line after 40 years same phrase is again in limelight courtesy its close resemblance to the basic general life requirements which are getting fulfilled by online marketplace/startups.

Roti (Food)

FS Labs Roti (food) Necessity Startup Models

It defines all food based needs. May it be a delicious plate from “Gupta ki rasoi” or famous “chur chur naan”, startups like Foodpanda, Zomato, Swiggy, TinyOwl are ready to take your order for food delivery from a restaurant of your choice. Even if you want to cook your own food, you do not have to go to market to bring vegetable or flour or olive oil or sugar and spices. Just call PepperTap or Grofers. They will be more than happy to list down your requirement and delivering it to you within quick time.

According to a report organised food industry In India is valued at $ 48 Billion out of which $15 Billion is the worth of online food delivery.

For India, it all started with Zomato and its restaurants searching website + App. Beginning in 2008 now it features scanned menu of restaurants, review, rating and photos to assist food loving crowd. Recently it has acquired Urbanspoon in order to enter into USA market.

Foodpanda – foodpanda processes and sends orders directly to partner restaurants and then deliver the same to customers. The service is available via web sites and mobile apps. Recently it acquired TastyKhana & Just Eat India to bolster its presence in India. It is in talks to buy stake in Tinyowl.

Mumbai based Burgandybox tells users how to cook famous dishes at home using recipe of Master Chef India fame Ajay Chopra. Homemade food delivery arena is secured by Cyberchef which is operational in Mumbai & Gurgaon. Yummytiffin and Homecarry are there for Tiffin service in Delhi & Mumbai. To support health conscious crowd iTiffin, Caloriesmart and Caloriecare are there. Bigbasket, Ekstop, Localbanya, Grofers, Peppertap, Amazon and Zansaar are there to deliver your grocery at your home.

To provide delicious food to travelling foodies, websites like Travelkhana, Yatrachef, Comesum, Railrider and Merafoodchoice are on roll. Website like Betterbutter promotes recipe submission on the website and then making a recipe book and publishing the same. Ola & Justdial have recently jumped into Indian online food ordering market.

Without excellent last mile delivery team “Roti” need can never be fulfilled. Roadrunnr, Delyver, Delhivery and many other “rider” providers are available to make hot food available well within time to foodies.

Kapda (Clothing)

FS Labs Kapda (Clothing) Necessity Startup Models

It defines clothing and apparel based needs. What it is that you want to wear? Do you need Indian designer clothing? Exclusively is there for you. Myntra, Zabong, Shopclues and global fashion group are there to suit you up for any occasion. Variety of the clothing and thousand of designs are available online. Customer needs to choose as per his/her taste.

What has been the reason for meteoritic rise of online fashion and apparel industry? Better brands at display, better price category , better deals and discount and awesome return are few reasons which have ensured the drift of traditional shopping ‘s decline.

While Myntra and Zabong are fighting to grab the top spot of Indian apparel Industry, other players have also lined up for catching a piece of the pie. Zovi focuses on providing shopping solution through putting a reasonable price and promotes local design and manufacturing. As per Zovi, earlier merchants, who controlled offline apparel sale, used to sell products at quite high price to fund the inefficiency of their supply chain and sales channels. Zovi hopes to cut cost by simply controlling its operations more effectively.

LimeRoad is there to check the gorgeous yet affordable solution for woman apparel. LimeRoad encourages its users to create outfit collages by picking items from different online stores. Then the most popular collages (or “scrapbooks,” as LimeRoad calls them) are ranked using an algorithm and suggested to other users. Shoppers can purchase and pay for products from different vendors directly on LimeRoad.

Roposo utilizes a recommendation engine to show shoppers products that are similar to ones they have already saved on the platform. Yepme, which has signed Shahrukh Khan as brand ambassador, is a marketplace for garments and accessories. Jabong has also been extremely active in bringing international brands to the Indian market and forging exclusive partnerships.

Fashionara allows its customers to try clothes at home before paying, while Myntra has recently tied up with local tailors in Bangalore to pilot a customization project which includes alteration of new clothes. Nearly all hurdles have been crossed apart from the touch and feel factor that a physical store offers. Even that will be solved by new developments in 3D technology.

Makaan (Shelter)

FS Labs Makaan (Shelter) Necessity Startup Models

It defines shelter based needs. Get a house on rent, Give a house on rent. Want to share a house with flatmates? Want to get a dream house next to your office area or you want to settle in the posh area of your city? Online web portal is there to support you in your search. Here is an analysis how –

Housing permits brokers and owners to enlist property on the interactive map.  Search results are filtered with respect to lifestyle rating, room availability and area based price range. Certain innovative features like Heat Map, child friendliness rating and demand flux maps are there to help customer in zeroing on a better property.

Commonfloor which provides housing solution to the people has also developed a Commonfloor apartment management system and helps in making apartment based communities across the country for better communication.

Through Magicbricks, apart from buying or selling & renting properties in India users have access to services like PropIndex (detailed information on the movement of residential apartment prices and supply of properties) and Property Pulse(property news, home loans concerns, legal & taxation issues, expert opinion and analysis of property trends).

Indiaproperty, Tata housing, Snapdeal are also having decent share in property business. 99acres features property listings from builders, dealers and property owners from all Indian cities.

Oyo Rooms and Airbnb helps you to find the shelter as per need of short time span.

FS Outlook 

All of the above analysis concludes that the startups working in the domain of basic necessities of life are having more probability of success and high chances of acceptance. As explained in our earlier analysis “Startup Idea Selection”, the best approach to choose an idea for startup is the selection of a problem and reverse analysis of its solution. So FS advices to all the startup enthusiasts to find the difficulties faced by mass for their basic needs, and provide a better solution for the same.

Read here more about the betterment of flipkart.

Read here more about the betterment of Myntra.

Read here more about the betterment of Housing.

Wish you luck for your startup. Stay tuned with fs labs for more analysis.

Housing Acquisitions: Introduction of New Verticals

Housing Acquisitions: Introduction of New Verticals

Indian property market is so huge and unorganized that none of the available platforms is on a trajectory of accumulating all the properties on it. This is the only reason why 99acres, housing, India property, common floor, no broker etc., all are running with their own market volume. Further, the verticals in property management are so wide that everyday a new startup is coming with introduction of new vertical, hence, creating a scope of improvement for every major player.

Started in 2012, housing has emerged as a “first mover” of all the new innovative features in property directory portals. Whether it’s be map based directory or 360 degree view, housing has always come up with new features ahead of its competitors to penetrate into the market volume of other players. “Experiments” and “Introduction of New Verticals” is the two major driver of its leadership in property portals. Though the popularity rate has lower downed considerably since the forced resignation of its former CEO Rahul Yadav, its improved user interface is still able to force users to remain stick with it.

Let’s take a short dive into housing establishment:

2012 – In June 2012, group of 12 students of IIT Bombay started housing as map based directory of rental properties in Mumbai. Further, housing introduced “point of interest”, a map based locator of all the nearby facilities like restaurants, ATM, Shopping Malls etc. Later it introduced CFI – Child friendliness index, to judge the property and area friendliness from child prospective.

2013 – In 2013, with 3 rounds of funding, housing extended its reach in Hyderabad, Pune, Delhi, Gurgaon, Bangalore, Chennai, Noida, Ghaziabad, Faridabad etc. along with new vertical like Buy and Resale Section. Land Section. Price Heat Map, Grid View, PGs services etc.

2014 – In 2014, housing got further 2 rounds of funding, along with the introduction of new features like Home Loans, Slice View, Demand Supply Monitoring, Rental Agreement etc.

2015 – Housing remained in news more for its CEO firing / forced resignation, employee firing and acquisitions rather than their own features development or business model grow.

FS Labs Housing Acquisitions - Introduction of New Verticals

During its journey of establishment, housing has acquired few startups to enhance its verticals. Here is FS Labs analysis on housing acquisitions trends:-

1.Indian Real Estate Forum (IREF) – March 2015, Deal worth – $1.3 Million (Target – Setting up Unbiased Platform for Property Related Discussion) : Founded in 2007, as a venture of Rohini Dutt, IREF gives information such as new projects, developers, localities, brokers, and plots before making the purchase. It claims to have a base of about 1.5 lakh active users on its forum.

Housing stated that IREF was imploding because of lack of resources and was suffering because of an intense marketing was from all the all estate classified players. With the acquisition of IREF, housing planned to revolutionize how real estate was perceived and conversed about. This move was made to improve the availability and accessibility of independent information for home-buyers.

Ravish Naresh, one of the co-founder of housing, who has prior experience of forum admin, has taken over as the CEO of IREF. Housing had planned to introduce a separate section called as “Ask me anything” on IREF which would attempt to answer any query regarding projects, brokers & builders.

What promoted the IREF selling? Bigger platform offered by Housing, Better technological support from housing team to update the forum, Housing strategy to put an unbiased platform for property related talks, Looming treat for buy out from other biggies in online property market.

2. Realty Business Intelligence – June 2015 , Deal worth – $0.5 Million (Target – Equipping Customers with Risk Assessment Tool for Property Purchase) : Founded by ex banker – Rajeev Nohwar, Realty Business Intelligence provides risk assessment of property market by doing due diligence, project monitoring, business intelligence and back-end research.

This acquisition was done to enhance the business intelligence of housing by providing verified listings, risk- free transactions and secure investments. Rahul Yadav stated “Through our acquisition of Realty BI, Housing.com strengthens its technology platform and consumer promise to deliver a powerful collateral risk management platform addressing the entire due diligence lifecycle to validate new projects. With our combined strength, we aim to remove ambiguities in the realty industry and bring about faster growth for the industry”

3. HomeBuy360 – August 2015, Deal worth – $2 Million (Target – Developing a better Platform for CRM) – cloud CRM Software Company. By leveraging this unique platform, Developers and Agents can streamline their sales, marketing and customer connect operations. HB360 helps Developers with Sales Management, Inventory Tracking, Call Centre Management, leads, bookings, collections, documentation, managing customers’ customization requests, commission, handover, and a lot more.

Housing has taken this step of HomeBuy360 acquisition to facilitate a significant reduction in “sales and operating cost” targeting all the developers across the country. Reduction in property prices and better customer relationship management are the other drivers of this acquisition.

Housing stated “This not only results in improved efficiencies, better transparency and customer satisfaction, but also a significant reduction in costs in the long run for around 20,000+ Developers across the country.”

FS Labs Housing Acquisitions - Bigger is Better

4. Plat and BigBHK – September 2015 (Target – Enhanced Relationship Management with Agents, Owners and Tenant) – Plat: an online network for Agents, and BigBHK: property management software.

Plat is as an online network for Agents, allowing them to share real estate requirements and inventories.

With the launch of Agents App, housing has already been trying to enhance its reach in the CRM domain of properties. The acquisition of Plat is a further move in this direction to enhance the technological expertise, and to fulfill the needs of Agents community. Housing comprehended that the tasks such as posting leads, enhancing the property showcase experience, and communications will be made more efficient, thus helping them close deals faster!

BigBHK is real estate property management software that helps users (PG Accommodations, Hostels, Independent Houses, Property Management Firms, Builders and Brokers or Agents) manage their property portfolios using a cloud-based solution.

Housing enhanced its CRM vertical for owners and tenant by acquisition of BigBHK. Using BigBHK’s technology, partners can streamline their real estate life-cycle, which include rental accounting, e-Invoicing, record management, complaint tracking, reports, inventory management, and much more. For the end customer, BigBHK provides tenants access to a free platform to raise complaints, track rent dues, and maintenance amounts on a monthly basis.

With these acquisitions, housing brought onboard Chitransh Sahai, Gautam Prem Jain, Ayush Lodhi and Ankit Aggarwal from Plat and Ankur Kumar and AtulYadav from BigBHK that strengthen its team.

Potential future acquisitions by Housing –

Post Rahul yadav era, there has been a significant change in the strategy of housing.com and they are now trying to capture all the verticals of property market by acquisitions only. Earlier it used to be a carefully planned & innovative new vertical launch.

We have talked in length about the future of Housing in our article “Next housing”. Recent acquisition by housing shows that its founders have keen interest in CRM and providing better service to its customers.

Read here more about the betterment strategies of housing.

According to FS labs, housing major focus shall be on CRM services acquisitions and the future of property segment will be more inclined toward providing “A Complete Housing Solution“. This includes – (Housing + Furnishing + Decoration + Daily chores service providers + Daily Grocery Supply).

Another prospective option of online property market is consolidation. It is due since long. Let us see when this happens.

Till then Adios ! Stay tuned for next analysis.

E-commerce Startups – Generic Analysis

E-commerce Startups – Generic Analysis

E-commerce Startups – Generic Analysis

Mobile revolution has emerged as primary driver of economic growth of individual as well as large scale industries and a potential driver of amazing startup concepts. Reduction in cost of smart phone and the availability of affordable network infrastructure has made a lot of entrepreneurs to think of website or app based startups. E-commerce has materialized as an attractive way of selling products by enhancing the reach of the local business model to the entire world.

“E-commerce” at first glimpse seems exceptionally simple and massive profitable concept, get some product, prepare a website, do some marketing and wait for the rain of money. The overall show is not as simple as it seems.

There are thousands of small vendors available in the city, have you ever thought why they have chosen to sell their product on a famous big platform rather than managing their own online store.

Let’s understand the basic models of e-commerce:

Model A – Market based where your role is of aggregator

Model B – Inventory based where you control the entire supply chain

Model C – Inventory and market based mixed model.

All three models are good enough in terms of profitability, depending on the level of execution. Profit margins are more in inventory based model but it requires huge investment to manage the inventory. In case of market based model, profit margins are moderate as you get the commission per sale but it’s requires less resources to manage the entire business model. A combined model is good enough in terms of large product catalog as well as profit margins.

FS Labs E-commerce Startups - Profit Margins

“Though we are using word profit margin too much, it does not mean that founders start making money from day one after launching an e commerce marketplace portal. Gaining profit is a 10 year or so type of long journey. It’s all game of pumping the discount to the “sale” obsessed consumers, gaining a loyal customer base, timely funding and finally trimming down the discount in long run. More than paying attention to profitability at the beginning, attention should be given on providing better service and delivery experience to customer.”

Here is FS Labs analysis on first cut planning of e-commerce startups How the simple stuffs become complicated?

1.Product Selection – The basic need of any of the e-commerce business model is product that you want to sell through your website/app. The product selection is critical as it decides the market volume based on the affordability and acceptability limits of the consumers.

The advantage of inventory based model is that the quality is completely in your control as well as the profit margin is high. The main drawback of inventory based e-commerce models are huge capital blockage, requirement of more resources, proper management, and limited product catalog.

Market based e-commerce business model gives the advantage of large product range, less requirement of resources, less capital blockage but the dependency on third party raises the issues of quality control and limited commission margins.

A mixed model is suitable enough as it provides the advantage of both of the e-commerce setups. So product should be selected that can be managed by self-owned inventories as well as third parties.

2. Market Volume Estimation–To estimate your targeted market volume is essential for your startup as it helps in deciding the marketing strategies and in estimating the level of competition in the market. Say if you are selling electronics items on your e-commerce platform, the targeted market volume depends on the affordability limit, age limit, gender limit etc.

The next step is to estimate the level of competition that you are going to face. So analyse all the players of e-commerce that are working in same domain, their strength and weakness, level of competition that they are going to give, their business strategies to capture the market etc.

3. Vendors Selection–Vendor of products are always required irrespective of the e-commerce model type. Monitoring of vendors of e-commerce business model is less in case of inventory based model while it’s critical in market base model. So, choose the vendors that are within your defined cost, quality limits.

If your model is inventory based, you need vendors to procure your inventory level. If your model is market based, you need vendors that are capable enough to deliver the order as per consumer need.

Cost and quality are the two major factors that need to be defined in the initial stage of vendor evaluation and selection. Ultimately it’s you whose name is going to get affected if someone is not performing as per the expectations.

4. Logistics Management–Logistics is the heart of e-commerce business model. Let’s break the entire process into small steps:-

  • Consumer places the order
  • Payment is done either beforehand or at the time of delivery
  • Vendor packs the shipment
  • Logistics need to deliver the product to consumer
  • Cost on delivery needs to be sent back to aggregator or vendor
  • Reverse logistics of the shipment if the consumer rejects the product
  • Further shipment for the reverse logistics as per consumer terms/agreement

Logistics is involved in all the steps of delivery process, so a proper channel of product flow, forward as well as backward, should be developed for on-time execution.

5. Website / App Design–A user friendly website or app is necessary where consumers can easily browse the products and place the order. So the development of website or app should be done parallel to the initial planning.

Getting domain name and circulating the cards among all the vendors do the initial stage marketing.

FS Labs E-commerce Startups - Generic Analysis

6. Payment Methods–Payment security is one of the biggest issues for the reputation of e-commerce website. Following are the major techniques of payment –

  • Credit / Debit Card
  • Net Banking
  • Payment Wallet
  • Cash on Delivery

Every consumer has his own choice of choosing the payment method, few prefer to use credit/debit card while few prefer to go with cash on delivery. So to incorporate all of the methods become essential for capturing all type of market base.

7. Marketing / Promotion–Marketing is always required to let the people know about the new development in some particular domain. Based on the type of product and targeted consumer base, suitable marketing strategies needs to be developed.

8. Supply Chain Management–Supply chain management is the management of flow of product / service. It includes the flow of goods from starting point to end point. So a proper management channel is required to plan, execute, monitor and control the supply chain.

Communication flow is the essential part of supply chain management as the contact points are more in both the cases; inventory based model as well as market based model. Customer, aggregator, vendor, logistics controller, payment controller are the major contact points of e-commerce supply chain. Hence extra care should be done while doing the planning of supply chain management.

Read here more about the communication planning.

9. Reverse Logistics Management–Reverse logistics is the most difficult task of e-commerce management. Faulty product, customer rejection are the main reasons that drives the need of reverse logistics.

Reverse logistics is difficult as the product needs to be picked up from the customer and return back to the original point, and then the further action should be taken place as per the consumer demand. The establishment of reverse logistics is necessary to maintain the customer satisfaction level

Why choose famous platform–Unless you have big scaling plans for your startup, it’s not sensible to create, maintain and expand the separate online store. It requires a lot of background work to keep the online store in demand. The major benefits of choosing an already established e-commerce platform are as follow-

  • No risk of establishing a new portal
  • Access to already settled infrastructure
  • Less operational cost
  • Reach to large market volume

The other risk associated with the new e-commerce setup of similar domain is that the recognized players would definitely not allow you to penetrate into their market base. Also, the probability of standing against “cash burn” techniques of established startups is quite little.

So, if you are planning to work on an e-commerce startup, FS Labs advises you to go through the complete analysis of your competitors, who are already in the same domain or who has high probability of getting into the similar domain once you start capturing the market. One of the most common misunderstandings that occupies the thought process of new entrepreneurs is that settle down one particular setup and big giant would come to acquire you. If you analyse the acquisition trends of Flipkart and Snapdeal, you will identify that their trends of startup acquisitions is getting shifted from verticals to value addition.

Read here more about the acquisition trends of Flipkart.

Read here more about the acquisition trends of Snapdeal.

Read here about the betterment of Flipkart.

This was the first cut planning of any of the e-commerce platform. Wish you luck for your startup. Stay tuned for more updates.

Food Ordering & Delivery Startups – Generic Analysis

Food Ordering & Delivery Startups – Generic Analysis

Food is the basic necessity of life and hence the grocery and food delivery areas are two hot concepts for startups, ensuring some level of success, provided other players don’t use “Burn Cash” techniques to penetrate the market volume. The probability of success associated with food and grocery based startup is quite high as the market volume is huge for your products/service depending on the affordability limits of targeted mass.

Day in & out internet is getting jammed with screaming food sellers. They make your plate at a reasonable cost (Plate makers declare so). They get your plate served to you within 45 minutes that too with a content demand. (Catch is – Serve hot & customer will pay anything).

Have you ever thought why you can order only from one restaurant & not from several restaurants? What if you want a “KFC- Fiery grilled” & your “not carrying wallet” friend wants a” Crunchy Prawn Salt & Pepper – Yo china”.

Here is FS Labs Analysis of Food Delivery Startups – How They Manage the Show?

Food based startups can be divided into three groups-

Model A. Those which only facilitate ordering.

Model B. Those which facilitate ordering + delivery.

Model C. Those which facilitate ordering + cooking + delivery.

FS Labs Food Ordering and Delivery Startups - Profit Margins

The faction of profit increases as the business model includes other verticals; hence the sustainability of “ordering + cooking + delivery” is more as compared with others. As compared the three vertical with each other’s, the profit percentage is highest in “cooking”, so the profit margin is highest if all the three verticals are captured.

In this article we will focus on the generic structure of this industry.

At the beginning Founder need to decide on following essential planning part:

  1. Deciding Market Base

Deciding which area will be covered for food delivery requires a deep insight of kind of people residing in that area. College students, bachelor groups, working couples, office based customers being the hot spots. These areas are termed as “Serve Areas”. Serve areas act as the booster for any business. Getting bumper response at the very beginning kick starts the proceedings.

Even Snapdeal built its empire of group buying based on the hot serve area of cyber city Gurgaon.

Read here more about Snapdeal – Business Model Expansion Strategies.

Read here more about the market size estimation of startup.

  1. Bringing Restaurants Onboard:

Once area is decided, next quest is to catch those eating points which are quite famous among the crowd. Next criterion is the proximity of these restaurants from serve areas. Availability of good eating joints near to hot “Serve areas” is an opportunity up for grab. Planning of last mile delivery and quality of customer service depends upon the distance between serve areas and eating joints.

Tough part of bringing restaurant onboard is to negotiate commercials with restaurants/eating points. Founder’s share varies from 5% to 20% on the order value (w/o tax). Though margins are good often food startups complain about bigger operational cost as the customer base booms.

If the model is self-cooking based, then to arrange the optimum kitchen is essential for sustainability of model. The security deposit, monthly rent, electricity cost, water supply cost etc. are the major cost factors to be considered during initial planning itself.

  1. Gathering Menu & Contact Information for Publishing on Website

This can be termed as basic data collection. Gathering menu of all the restaurants and then bringing them to same platform is one of the major tasks of starting a food based startup. While making an interface of menu on the website/ app, clarity and simplicity of data is most important. Any ambiguity with regard to Menu can be detrimental.

Here the role of user interface becomes important. More handy the interface is lesser will be the customer bounce rate from website and hence better conversion.

If the model is self-cooking based, then deciding the menu as per local needs is essential. Initial feedback of targeted market volume is essential to understand their food requirements.

  1. Website / App Design and its Release –

The next basic requirement of “food serving platform” is a user friendly Website/App. and getting cards circulated among the restaurants. It invariably helps in marketing of food startup.

FS Labs Food Ordering and Delivery Startups - Generic Analysis

  1. Deciding MOV:

MOV here stands for minimum order value. It depends upon operating cost of the supply chain. We can broadly classify incurring cost as – Operational cost, marketing & promotional cost, Profit margin, Discounts and overheads. Most of the existing startup keeps MOV as a function of distance of Restaurant from Serve Area. It may vary from 200/ Order to Rs 400/ order.

  1. Setting up Support Facility & Staff:

Food startups need supporting staff as per their business model, cooks/helpers to prepare required food, for taking fresh order, conveying order to respective restaurant, getting report on ready order, tracking the order status, coordinating order delivery and getting customer feedback. And then startup needs hardware to make all this digital magic happen.

  1. Building Delivery Team:

Most crucial part of delivery business is managing the supply chain. Delivery hot order to a customer is quite challenging.

Let’s break this into short action –

  • Customer puts an order.
  • Food startup operator places order in respective restaurant.
  • Operator looks for delivery guy in the hub.
  • Operator asks delivery guy to collect order from Restaurant and invoice from hub.
  • Delivery guys runs through the traffic.
  • Order is delivered hot to the customer.
  • Delivery guy collects the cash and returns to hub.

This whole delivery sequence (delivery areas in 5 kilometer diameter) takes around 30-40 minutes / order. A single delivery guy could serve at most 8 orders @ 80% efficiency during evening shift (From 6PM to 12 AM). Number of delivery guys increases exponentially with rising customer base.

  1. Operational cost –

Main area where food delivery segment leaks money is order delivery. At an standard delivery man salary of Rs 8k/ month(without petrol charges & perks) operating cost of delivery man/ hr is 53 Rs/Hr. Minimum order value has to be around 266 Rs/ Order (53/20%) to attain no gain no loss status. Apart from this office rent, petrol expenses of the delivery man, other overheads are the major operational costs associated with this business model.

  1. Why Delivery from a Single Restaurant –

Above we have discussed how a delivery man costs around 53 Rs/ hour. For facilitating order from more than one restaurant, it will require either of the two things –

a.) Increasing involvement time per order for delivery guys

b.) Involving more than one delivery guys for a single order.

Both these situations will lead to more operational cost to food startup. And in case of involvement of 2 delivery guys MOV shoots up to 550 Rs/ Order, which is quite high, provided the players are not just trying to penetrate the market base by “Cash Burning”

FS Labs has analyzed the food delivery startups and upon initial brain storming it seems that serving from one restaurant is most apt option. Anyone looking for “food from more than one restaurant” will have to set MOV to quite higher side or need to optimize its processes very precisely or need to burn cash to penetrate the market.

Stay tuned with FS Labs for more analysis.

Snapdeal Acquisition Trend: Sheer Aggression or Well Planned Acquisitions?

Snapdeal Acquisition Trend: Sheer Aggression or Well Planned Acquisitions?

Group buying is an online retail service that aggregates demand from consumers to negotiate unbeatable discounts from merchants across restaurants, spas and other entertainment avenues. Aim of Group buying sites has been to bring customers together socially, in addition to harnessing the bargaining power of groups.

Groupon’s billion dollar valuation in 2010 created buzz all over the world. Indian entrepreneurs noticed the news with enthusiasm and in a short time number of group-discount based websites became operational.

Let us take a short dive in the fairytale rise of Snapdeal

Started on 4th February 2010 by Kunal Bahl & Rohit Bansal, Snapdeal’s initial business model was quite similar to Groupon. They charged 35% upfront for every deal. Rest had to be paid directly to the merchant on delivery of service or good. Employees were given the job of getting discounts from merchants. Ambience of 0.8 million strong Gurgaon cyber city IT crowd too helped Snapdeal in jump start. IT crowd was the sweet target as it loved – lavish dinners, pair of luxury sunglasses and soothing spa.

By June 2011 Snapdeal was already well ahead of all other players in group buying market. It boasted 5 million registered users and a hefty 27% of Indian online deal market share.

Around 2011 end, Snapdeal founders realized that core deal was not as big a business as they used to think.  They then started thinking about integrating deals, services and product sale onto one platform. In January 2012, taking cue from Alibaba they transformed their deal base into a product focused market place.

Here is FS Labs Analysis how Snapdeal build their business by acquiring diverse marketplaces:

FS Labs Snapdeal Acquisitions - Bigger is Better

1.Grabbon – June’2010. Snapdeal Business Model – Deal Sellers. Target – Expansion into 15 cities within 2 months)

Grabbon had been leaders of group buying segment in Bangalore. They shared their nature of work with Snapdeal. Their quality of execution and thought leadership in evolving the business model in India was of top notch.

Its founders were XLRI alumni with consulting backgrounds, Jackson Fernandez (Accenture) and Tony Navin (KPMG). Grabbon’s geographical presence made them apt choice for the acquisition for Snapdeal which started targeting southern part of India after this acquisition.

After acquiring Grabbon, Kunal Bahl had said that they would have the flexibility and resources needed to pursue their goal of building the next-generation platform for the Group Buying space in India. Snapdeal were present in 8 cities before the deal.

2. Esportsbuy – April’2012. Snapdeal Business Model – Online Marketplace for Products, Deals and Services. Snapdeal valuation – $200Mn, Deal worth – $10Mn. (Target – Unorganized Sports Retail Sale)

Esportsbuy was founded by Amit Monga (Amazon) and Prateek Agarwal (IBM) in 2011. Its turnover crossed $0.2 Mn within 1 year of service. It was a Delhi based startup which sold fitness and sports products online. Sports product & equipment selling was a niche segment and offered better margins.

By This acquisition, Snapdeal aimed to add a niche category in its product portfolio, which was not being sold by its competitors.  Another reason for the acquisition was segment consolidation. As per experts, smaller websites were not able to gain customer loyalty and were not able to sustain highly competitive pricing hence they came looking for merger with big players. From Esportsbuy point of view, 5 times valuation was a good value proposition.

Within 2 months of acquisition, Snapdeal closed Esportsbuy and introduces new vertical for sports and fitness products on its website.

3. Shopo – May’2013, (Target – Niche Handicraft and Designer Items Online Sale)

Launched in 2011, Shopo was an online marketplace for Indian handicraft products.  Shopo was backed by investors including Sequoia Capital, Sashi Reddi, SRI Capital and Seeders, among other angels. After looking for funding for more than eight months, its founders decided to sell Shopo to Snapdeal.

For Snapdeal it was another acquisition highlighting addition of niche vertical in its product portfolio. For Shopo, it was an opportunity to get showcased to a 20 million registered customer base of Snapdeal. Shopo sellers were supposed to get exposure to larger customer base.

Snapdeal re-launched Shopo platform in June 2015 as an interactive platform for online buying & selling. It facilitated sellers in setting up an online shop through a mobile app and charged them nothing. Buyers can strike a bargain from seller through online chat and sellers can make time bound offers and transact offline. It tries to replicate offline buying experience.

4. Doozton – April’2014, (Target – Fashion & Apparel online sale)

Founded in March 2013 by Pushpendra Singh – An IIT graduate, Doozton was a social shopping platform which aggregated fashion and lifestyle products from online fashion & lifestyle stores. Apparently it was We read ( Read here about Flipkart’s Acquisition trend) of fashion and apparel. It offered product recommendations to users based on their interests, gender and occasion for buying fashion and lifestyle products. Users were able to browse through fashion recommendations from their friends, Doozton community and the latest fashion trends.

This deal came at a time when Flipkart & Myntra were in discussion for merger. Doozton had tie ups with almost all fashion and lifestyle online sellers and directed customers to corresponding seller as per customer preference.

Snapdeal used Doozton platform for listing and suggesting fashion merchandise to customers in more artful and personalized way. With an aim of curbing the traffic to other competitors, it was definitely a big buy for Snapdeal.  For Doozton, exposure to huge customer base of Snapdeal made sense.

5. Wishpicker – December’2014, Snapdeal – 30 million members, 50,000+ sellers, Delivery @ 5,000 cities and towns (Target – Intelligent Recommendation Based on Customer Data)

Wishpicker was a tech platform that used machine learning to deliver recommendations for gift purchases. Founded by Apurv Bansal and Prateek Rathore, Wishpicker’s technology helped users find gift options using information about their relationship with the recipient, the occasion, and his or her age and personality, or looking at the recipient’s likes on Facebook.

At a time when intelligent recommendation are gaining more importance as a measure to control inventory, Wishpicker’s platform helped Snapdeal in fine tuning their product category and planning the inventory as per trend of customer choice.

This was more of a technological acquisition which would equip Snapdeal with a better platform and capability for helping sellers connect buyers in newer ways.

Since last one year or so, Snapdeal had been acquiring or getting an exposure to third-party e-commerce enabling ventures.

6.Smartprix – January’2015, Snapdeal – 30 million members, 50,000+ sellers, Delivery @ 5,000 cities and towns (Target – In line with Amazon’s Junglee; Better Customer Experience and Successful Conversion)

Smartprix was an online comparison shopping that helped users compare different products and choose the best product according to their needs. It presented pricing information of the product on different online stores and provided review, ranking and recommendations. Product categories included mobile phones, tablets, laptops, cameras personal care appliances, accessories and books. It was founded by Hitesh Khandelwal and Abhinav Choudhary from IIT Delhi. It earned commission from affiliates on every sale.

Through this acquisition, Snapdeal tried to go in line with Amazon which owned Jungle for comparison of product. This strategy helps in showcasing more number of products to customers at the same time and helps in converting the customer’s visit into a successful event for E commerce seller.

FS Labs Snapdeal Acquisitions - Introduction of New Verticals

7. Exclusively – February’2015, (Target – Serving Luxury Items to Public)

Exclusively started as a flash sales site but changed to a standard e-commerce model offering Indian designer apparel and accessories in 2011. The company used to ship products only to the US and UK catering to them Indian designer fashion and apparel items but by 2015 it had started shipping to destinations in India and other global destinations too. Exclusively was once part of Myntra courtesy an acquisition in 2012. Myntra had sold the company back to founders and had exited completely.

As per deal, Exclusively will remain as a standalone brand, with its existing team — including co-founders Sunjay Guleria and Mohini Boparai-Guleria — leading the charge to continue building its online luxury mall. Exclusively will be expanded this year to include international luxury brands alongside the home grown products.

This deal could provide a relief to the luxury lovers in India. At the time of deal there were only 3 physical shopping malls dedicated to luxury items. Considering the increasing purchasing power of Indian middle class and more inclination toward “Branded” shopping, this deal could act as a new turning point for Fashion and apparel online sale.

8. Gojavas – March’2015, (Target – Logistics Betterment)

Launched in 2013, GoJavas is a last mile delivery platform. At start of 2015 it was serving near 200 companies, delivered at 2300 pin codes and covered 105 cities. It had shipped 5 million packages in 2013-14 and was expected to ship 20 million packages in 2014-15. It served 0.1 million customers daily.

Logistics plays an important role for success of E commerce business and Snapdeal were not having any personalized delivery arm but were dependent on third party logistics firms.

With a plan to expand- selling 80 million packages per month- developing its own logistics service became all important for Snapdeal. It bought 20% stake in Gojavas in $20 Million to build a strategic partnership. Snapdeal said that they would now be able to make delivery within 4 hours in 8 selected cities and will focus on quality of service, timeliness of delivery and improving delivery cost.

9. Unicommerce & Rupeepower – March’2015, (Target – Logistics Betterment+ Digital Market Place)

Founded in 2012 by three graduates from Indian Institute of Technology, Delhi—Ankit Pruthi, Karun Singla and Vibhu Garg—Unicommerce offered SaaS (Software as a Service is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet) based solutions to manage inventory, delivery and other aspects of ecommerce. It helped small merchants and e-commerce firms manage orders from the time they are placed till when products are delivered.

Snapdeal picked majority stake in RupeePower, a digital marketplace for loans, credit cards and other personal finance products for an undisclosed amount. Through this acquisition, Snapdeal will be adding a financial services marketplace onto its site, which will offer financial products like personal loans, educational loans, credit cards, auto loans, home loans and extended warranties amongst others.

Snapdeal claimed that this marketplace will allow financial services companies to reach out to consumers in smaller cities & towns and market their products & services to a targeted audience, which may led to higher conversions as compared to traditional offline channels.

Every day 75 million mobile recharges are done in India by a section of India’s 800 million mobile phone subscribers, out of which currently only 3 million recharges are done online.

10. Freecharge – April’2015, Deal Value – $450 Millions (Target – Converting M-commerce Customers into E-commerce Customer)

Freecharge is India’s leading mobile commerce platform where users can pay their mobile, DTH and utility payments across most major operators. Freecharge provides online facility to recharge any prepaid mobile phone in India. The amount paid by the user for recharge is returned in form of shopping coupons of some of the top retailers in India, thereby making the recharge virtually free.

Online recharge and E commerce are like cousins. Freecharge’s subscriber base is one of the biggest reason behind this acquisition. Consider the move of Paytm : They started as mobile recharge platform provider, once the customer base swelled they added ecommerce in their portfolio. Reasoning behind this being the common demography of customer base for mobile recharge and ecommerce online sale. Free-Charge came with a trove of payment data on the estimated 10 million users on its platform. Besides, buyers are transacting on mobile devices in ever greater numbers, meaning that Freecharge users become potential customers for Snapdeal.

11 Reduce data – April’2015, (Target – Logistics Betterment)

Reduce Data’s focus is to assist brands and advertisers through leveraging artificial intelligence, real-time data and other tools. Revenue generation from ads has been the target of E commerce giants considering the revelation by Alibaba that they had generated around 55% of their sales from advertisement in year 2014-15.

Acquisition of Reduce Data by Snapdeal is the company’s latest push into strengthening its advertising business. This will assist the sellers of Snapdeal to retarget users with custom ads tailored to individual visitors, as well as get real time data on their impressions to provide better ROI .The acquisition will help Snapdeal to build a discovery platform and tools for brands and over two lakh sellers on the marketplace.

12. Letsgomo & MartMobi – May & June’2015, (Target – Betterment of Mobile Platform)

After acquiring Freecharge, Snapdeal became the largest M commerce company. Strengthening its mobile platform became utmost priority for them.

Founded by Manav Kamboj and Vikas Banga, Letsgomo Labs helps companies with end to end mobility solutions like building mobile strategies, conceptualization of applications and mobile sites, implementation and hosting.
With over 150 clients, MartMobi enables seamless connectivity with the customers’ existing back-end systems in addition to a real-time analytics engine to improve conversions and user engagement.

With 75% of sales coming through mobile based platform Snapdeal has been targeting to provide better service experience to customers. These two acquisitions are in line with this thinking.

This brings to a closure to the “Acquisition Spree” of Snapdeal which is quietly running to fill in the shoes of Chinese Giant – Alibaba.

What will be the Next Potential Acquisitions by Snapdeal

FS Labs Snapdeal Acquisitions -Lessons for Small Startups

Snapdeal has now established into a leading player of Indian E retail sellers. To consolidate its position, it must be broadening its horizon from time to time. FS Labs has listed down few prospective areas where Snapdeal could make next acquisition-

  • Grocery Delivery.
  • Better last mile delivery.
  • Better warehousing / Inventory management solution.
  • Mobile wallet service provider.
  • Customer Relationship Management Platforms.

There are more areas which will be added to E retail market and will pose a new challenge in front of giants of the market. Till then, happy reading.

Stay tuned for more analysis.

Flipkart Acquisition Trend – Lessons for Small Startups

Flipkart Acquisition Trend – Lessons for Small Startups

Every idea is a seed. It has got potential to transform into a big tree of success. Whenever an entrepreneur starts working on an idea, first and foremost question which he faces is how his idea will perform? Would he be able to stand in the category of few “Bansals of India” or would be consumed by big startups in the phase of evolution.

Founder’s target:

Aim of every startup coming at the horizon can be summarized in two broad categories:

  1. Startup will evolve into big success and will lead its segment. Like – Filpkart, Amazon, Apple, Google etc.
  2. Startup will develop into an expert in particular segment/practice/technology and will be later acquired by bigger startups as part of their business model.

Every founder thinks big. As per them, their idea could be the next big hit in market. But phases of evolution and time shape the future of every startup.

Here is FS Lab’s analysis about Flipkart Acquisition trend, which highlights how Flipkart has carefully planned its success story on the map of Indian E-Retail market.

Let us take a short dive in the fairytale rise of Flipkart-

Consider the evolution of Flipkart from “Online Book Sellers” to a $15 billion E retailer company. Founders of Flipkart were initially trying to make a price comparison platform but as not many e commerce websites were present at that time, they decided to make one E-commerce company. Flipkart began its service in India in 2007. It all started with book named “Leaving Microsoft to change the World”. Initial investment of $8000 for making website and customer interface domain was all they invested. Within 3 years they were able to attract large customer base which was previously content with buying books from stores.

Book plus Electronics item sale was next target. Funding and careful planning supported by better customer service was mantra for smooth changeover of Flipkart-The book seller to Flipkart-The E retailer. In mean time to switch over its initial image to E retailer, Flipkart acquired number of companies. These acquisitions were carefully chosen and all of them coincide clearly with “what next Flipkart is planning to sell”.

Flipkart Acquisition – Pattern

FS labs Flipkart Acquisition - Bigger is Better

1. We Read : 2011 (Flipkart sold books; had 800 Employees. Potential Target – Getting socially connected to its customers and get traffic from social media) A social book discovery engine and enabled users to recommend and discover books, search for authors, rate and review books as well as share and network with other book lovers. It was registered widget on Facebook, Hi5, Myspace, Yahoo and Orkut. It boasted a registered reader base of 3 million and had listed 60 million books. Most troublesome feature pre Flipkart acquisition was that it directed customers to Amazon.com.

Through acquisition of We read, Flipkart were able to connect to its customers socially. It ensured presence of Flipkart on every social media platform. And of course a lot of traffic to Flipkart website which was previously diverted to somewhere else.

2.Mime360: 2011 (Flipkart sold books, handsets, consumer electronics & movies; had 1500 Employees. Potential Target –Online Music Store)

An online digital media exchange platform that connected content owners such as artists and musicians with content publishers. It resolved common issues such as piracy, varied pricing and revenue collection for the users and had a revenue share and licensing based business model. Flipkart wanted to build out its B2C story. It was already selling music CDs and DVDs on the site and now they wanted to open a business vertical to distribute music & games online.

In October 2011, Flipkart launched an online paid music download store – Flyte, with an aim to control legal music download and hence generate revenue by selling paid music download. Later this venture failed as it was not able to compete with free music download industry.

Mime360 had around 11-12 people, and the technology team eventually shifted to Bangalore, while the business team remained in Mumbai. Sameer Nigam, CEO of Mime360, joined as head to lead Flipkart’s digital distribution business.

3.Chakpak : 2011 (Flipkart sold books, handsets, consumer electronics & movies; had 1500 Employees. Potential Target – Online digital store for movies)

Chakpak was a content portal around films, covering Bollywood, Tamil and Telugu films, with movie timing, movie information, film reviews, a stars directory, video clips, wallpapers and film news. Flipkart acquired only content from Chakpak. This move was in line with the acquisition of Mime360. Probably Flipkart had a vision to include paid film download in its “Flyte” digital store.

Critics saw this move of Flipkart to be in line with the acquisition of IMDb by Amazon, to benefit from its dedicated ad inventory for driving online sales of movies, music and merchandise.

Among its founders, Gaurav Singh kushwaha went ahead with new ventures while Nitin Rajpoot joined Flipkart. Chakpak.com (website) was later acquired by Trivone digital services.

4.Letsbuy : 2012 (Flipkart sold books, handsets, consumer electronics & movies; had 2500 Employees. Potential target – to be undisputed king of online electronics sale market)

LetsBuy was launched in July 2009, and primarily focused on retailing consumer electronics; communications and computer goods, later expanded its product portfolio to include toys, sports, healthcare, watches and stationary. At the time of acquisition Letsbuy.com was making around 150 Cr annually as compared to 500 Cr of Flipkart. These two were the leading online electronics seller and the segment was actually struggling for customer loyalty.

This acquisition gave Flipkart an edge in electronics market. It in a way consolidated the E retail market and redefined the size of Flipkart. It also prepared Flipkart for a duel with Amazon which had just entered into India market.

The acquisition was a combination of cash and equity. Founders of Letsbuy, along with their 350-plus team, continued to function independently with the added advantage of being able to access Flipkart’s superior technology platform and supply chain capabilities

 With This move Flipkart clearly had had consolidated its position in two verticals – Books and consumer goods, while in third – Digital store, its performance was OK-ish.

FS labs Flipkart Acquisition - Introduction of New Verticals

5.Myntra : 2014 (Flipkart sold books, handsets, consumer electronics & movies, apparel; had 20000 Employees. Potential target – to be leaders in online apparel market)

Leader of fashion and lifestyle – Myntra was the next grab for Flipkart. With looming threat from Amazon and eminent entry of Walmart led to consolidation of apparel industry as well. At the time of acquisition, Myntra was values at $204 Million and combined with flipkart it was holding 40-50% of online apparel industry market share.

This acquisition came as a blessing to both E retailers. In year 2013 both had booked a net loss close to $350-400 million. Consolidating the business will help them as now both will be able to share the supply chain and operations. This move again prepared Flipkart for forthcoming duel with Amazon, E-bay and Walmart.

Myntra co-founder and chief executive Mukesh Bansal got the role of head of fashion business of both Myntra and Flipkart. Despite this acquisition, as per terms agreed by Flipkart & Myntra, both still sold apparels independently.

6.Adiquity : 2015 (Flipkart sold books, handsets, consumer electronics & movies, apparel; had 33000 Employees. Potential target – Online marketing space)

Adiquity started in year 2006 as a search engine named Guruji.com. By 2015 company has changed into a mobile ad network that allows app developers and mobile publishers to earn revenue through their mobile inventory. It also facilitates ad agencies, ad networks and other industry buyers to acquire global quality mobile traffic.

Adiquity’s technology will help Flipkart provide online marketing services to the sellers on its site, an online marketplace, helping them improve their chances of reaching a wider and more relevant audience, including that are served up with searches and social networking posts. With Adiquity, Flipkart can help its vendors by taking the burden of effective online marketing off of their shoulders, for a fee. It would also ensure the vendors are tied to Flipkart’s ecosystem more firmly at a time of intense competition.

This Move is in line with the search of more inorganic route of revenue generation. Adiquity CEO – Anurag Dod joined Flipkart initially but resigned 6 months thereafter.

7.Appiterate : 2015 (Flipkart sold books, handsets, consumer electronics & movies, apparel; had 33000 Employees. Potential target – precise marketing through mobile app)

Appiterate was basically an A/B testing tool for mobiles. A/B testing is a methodology to test out two variants and experiment to find out which version works better with the audience. Appiterate in the past has helped e-commerce companies in targeting their customers in more specific manner by using big data, push notifications and in-app messages. Appiterate was delivering more than 100 million personalized notifications each month through its platform for leading e-commerce companies

Appiterate’s mobile marketing automation platform will be integrated into Flipkart’s mobile app and will be used to drive up revenue through precise targeting of users based on their activity on the app and website.

This acquisition was in line with Flipkart’s “Mobile first” approach.

Apart from these acquisitions Flipkart in 2014 has bought a sizable share in NgPay to strengthen its mobile payment platform.  Appiterate CEO – Tanuj Mendiratta joined Flipkart initially but resigned 4 months thereafter.

What will be the next potential acquisition by Flipkart!

FS labs Flipkart Acquisition - Lessons for Small Startups

Flipkart has now established into the biggest Indian E retail seller. To consolidate its position at the top it must be broadening its horizon from time to time. FS Labs has listed down few prospective areas where Flipkart could make next acquisition-

  1. Grocery Delivery.
  2. Better last mile delivery.
  3. Better warehousing / Inventory management solution.
  4. Mobile wallet service provider.
  5. Spectacle and lens makers.
  6. Customer Relationship Management Platforms.

There are more areas which will be added to E retail market and will pose a new challenge in front of giants of the market. Till then happy reading.

Stay tuned for more analysis.

Read here about the betterment of existing setup of “Flipkart”. (An analysis by FS Labs dated 26th July 2015).

Read here about the betterment of existing setup of “Myntra”. (An analysis by FS Labs dated 6th October 2015).

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