While the likes of Ola, Taxi for Sure and MGaadi are already trying to tap the auto-rickshaw market, Chandigarh-based Jugnoo is going a step ahead, and plans to use auto-rickshaws to revolutionize hyper-local commerce.
Comprising an all ex-IITian team, and headed by CEO and Founder Samar Singla, Jugnoo was launched in November last year and is currently present in Chandigarh and Ludhiana. Their aim is to ultimately utilize the auto-rickshaw network to provide on-demand delivery of ‘anything’ through their app, along with an option of personalised chat platform.
They are looking at tapping the network in a dual capacity: transportation services as a growth engine and logistics platform as the main revenue stream. They believe that to ensure optimum ETA (Estimated Time of Arrival), optimum utilisation (for driver sustainability) and not disturb their overall economics, Value Added Services are the way forward.
They have already launched ‘JugnooFatafat’ in Chandigarh, providing on-demand personalised generic deliveries, and seem to be facilitating hyper-local commerce at a new level. On the scope of hyper-local commerce, Samar says,
“You can always find an equally priced vendor within 5 kilometers radius, offering a product that you buy from Flipkart or Amazon and wait for two days to be delivered. It just takes a lot of effort to do that. Then, there is a lot of stuff that is just not right to sell on Flipkart and Amazon, for instance, cakes, flowers and other perishable items. Almost all the big e-commerce companies have tried to take an approach of starting from the top by offering everything everywhere, and then trying to reduce delivery time by economies of scale. This just doesn’t work, especially in countries like India where supply chains are super fragmented and have razor thin margins. Still this approach is pretty efficient because of low labour cost. Creating warehouses and buying bigger and better trucks just isn’t that useful. There needs to be a mobile first bottom-up approach for connecting buyer’s and seller’s hyperlocal approach.”
On the question of competition from the biggies like Ola and TaxiforSure, their team believes that taxis and autos are two entirely different segments and tapping the two simultaneously will be a very tough task. They are of the view that tapping both of them as service partners has a conflict of interest and one of the service partners is bound to be unhappy.
The Jugnoo team adds that they are currently aiming at Tier-2 and 3 cities where ratio of auto vs. cab is much more skewed towards autos, which is likely to give them an upper hand in the long run.
On the same point, Samar explains,
“In India, over 45 million trips are being completed daily through auto rickshaws. The total number of autos in India is more than 10 times the number of taxis. Plus the reach of taxis is limited to only a few big cities, beyond which you would only find them in less numbers, making operations in such cities uneconomical. Autos, on the other hand, can be seen everywhere, be it a metropolitan city or a small town. Potential to scale Jugnoo is therefore manifold compared to Uber and the likes.”
Within four months of its launching, Jugnoo has already crossed 1000 transactions/day figure. They have already raised a round of funding from reputed angels and are in talks for a substantial round from another reputed institutional investor. Given their pace, they should be able to reach out to multiple cities soon!