Delhi based MyGrahak.com is an online grocery store launched in December of 2010. With increasingly busy lifestyles of urban middle class in India, an e-commerce store to purchase groceries is a much needed option. We at YourStory.in caught up with Mr. Ambuj Jhunjhunwala, founder & CEO of MyGrahak.com to know more about his business idea and expansion plans. Edited excerpts:
Ambuj, What led to the creation of MyGrahak?
I founded MyGrahak based on the idea to transform grocery retail in the country from ‘transaction driven’ to ‘relationship focused’ by offering people an opportunity to shop online from the comfort of their homes. The idea was to elevate the lifestyle of people by giving them a one-stop-online-shop and extreme purchase satisfaction such that they would keep returning every month. Currently, Indian consumers are forced to visit about 3-5 shops to get their monthly household needs. In addition, loose-unbranded groceries represent a quality and quantity hazard, which many could do without. After travelling extensively I was able to see the convenience that consumers in the West enjoy, and I wanted to add that convenience and comfort to time stressed Indian consumers.
Tell us a little bit more about your service offering.
MyGrahak began by selling grocery and household items to customers in Delhiand NCR, but we aim to extend our service to Mumbai, Bangalore, and Chennai by 2015.
Before starting the venture, I ensured that the core ideology should be framed as supreme service to the customer by using technology to break conventional barriers. By keeping customers at the core of all activities, we have been able to differentiate ourselves which has given us higher bill sizes and increased supply chain efficiency. This has allowed us to offer free home delivery.
On the product side customers can refill their household needs with anything from groceries, tea, sugar, branded food & beverage to pet products and toiletries. While a typical hypermarket is only able to fill 65-75% of customers food and grocery needs, we have already managed to meet 80% by maintaining a list of 10,000 SKUs and enlisting new products on customer’s demand.
On the service offering, we believe in making life easier and MyGrahak is a place where we redefine the customers’ lifestyle for better. Our customers can View the entire product range on his or her computer, Select and confirm the order by viewing the cost of purchase and savings, Buy cheaper by getting a minimum 4% discount on MRP on all FMCG products, Interact with courteous telecallers/chat agents for troubleshooting, Get free home deliveries within 48 hours by well uniformed and courteous delivery men, avoiding the troublesome trip back from the grocery store while also saving time, Choose to pay online or by cash on delivery, Subscribe for information of the regular offers and combo deals by enrolling with MyGrahak newsletter, Request new products.
Initially we started with deliveries in restricted areas of South Delhi, but after establishing various areas of value chain in functions like delivery, assortment, and stocking and warehousing, we extended our service to all of Delhiand NCR in May, 2011.
What is your educational background and work experience prior to starting up?
I am a management graduate from Singapore. I was born into a large business family, and I have always dreamed of being an entrepreneur. I joined family business at the age of 20, and have played various roles in the group companies with interests ranging from rice to steel to retail over the last 5 years. I have a strong interest in technology and consumerism. My desire to use technology to boost consumerism, led me to startup a platform to sell groceries online.
How big is your team?
Our team consists of 51 employees in the areas of IT, marketing, supply-chain, merchandising, and HR.
How many transactions happen per month?
We process about 5000 transactions per month with a growing rate of 30% month to month for the last 3-4 months. Additionally, with improved service levels, we have also seen our repeat customer sales increase from 30% to over 40% in the last two months.
We can divide our supply chain divide into three areas: Merchandising & Vendor Management, Warehousing, and Delivery.
We have taken significant steps in the area of devising and sourcing policy by aligning with around 800 odd companies. We have also implemented efficient mechanisms like virtual merchandising and CPFR (Collaborative Planning, Forecasting and Replenishment) initiative. Our vendors have been divided into 3 categories – direct from manufacturer/brand (V1), direct from wholesaler (V2), and strategic alliances (V3). The use of all 3 distribution points for sourcing is unique in its own way and has allowed us to ensure constant availability of products to the consumer thereby giving us 100% fulfillment in over 95% of our orders.
We have set up a 7000 sq ft warehouse in Delhi to cater to product demand requirements of the customer. We are looking to expand to a larger space in order to meet increased demand and improve the depth and width of SKUs within the categories we offer.
We divided Delhiinto various zones with mapped routes. Uniformed MyGrahak delivery men supply products in a variety of delivery vehicles & motorcycles on a daily basis. All our vans are equipped with GPS systems. Our in-house logistics and transportation team ensures that deliveries are made as per the chosen time of the customer. We manage every aspect of the supply chain, from sourcing all the way to customer delivery.
What is your revenue?
We are yet to complete an entire year of operations, but we expect to cross a monthly turnover of 1 crore before the end of this fiscal year.
How do you spread the word about MyGrahak offerings?
To spread the word, MyGrahak has created 5 ladders of loyalty and has assigned marketing vehicles to each. These ladders are prospect, customer, supporter, advocate, and partner. The first two are for customer attraction and the remaining are for CRM. To identify prospects we have conducted extensive market research, focus group interviews, and dip stick studies in Delhiand NCR. To market to customers we have employed several marketing vehicles such as ATL marketing (print, PR, and radio), outdoor activation (home to home activations and kitty parties), and digital marketing. To maintain supporters who buy more than once, we provide personalized teasers for their birthdays and anniversaries, leaflets communicating how valuable they are to us, and delivery tags with feedback forms. To maintain relationships with our advocates, those who recommend us to friends and family, we give them referral cards. We send flowers & a designer leaflet to the referrals and then our telecallers follow up. In addition we communicate to them via social media and send personalized text SMS to them on their birthdays and anniversaries.
Are you looking to raise funds?
Yes. We are looking to raise Rs. 200 crores. Rs. 50 crores by 2012, and Rs. 150 crores by 2014.
As an e-commerce site in a very niche market, what are your major challenges?
There are four overall challenges, stock availability, warehousing, distribution, and manpower. We have successfully overcome these till now.
What is the size of the market you are trying to capture?
We feel there is a potential of Rs. 3.2 billion in this market, growing at 15% (top nine cities in India). MyGrahak plans for a turnover of Rs. 1,000 crore by 2015.
What are your thoughts on MyGrahak? It would be interesting to keep an eye on how they scale!