In the era of mobile, this trio is hitting a crore in revenue with 'The Bluebook of discounts'
The industry for coupons is more than 130 years old. In this period it hasn't changed significantly except for one aspect - you don't have to cut it out of newspapers anymore. It is the era of online retail and the web is flush with discount vouchers, coupons and couponing sites. Over and above the already deeply discounted products that e-commerce sites are luring consumers (read: you and I) with, there is a deluge of affiliate merchants offering you cashback for your purchases.
Even before the consumer could become comfortable with e-commerce viz. shopping on your laptop, the era of m-commerce seems to be dawning upon us. With one of the leading fashion online retailers having already announced its plans to go mobile-only by the year end, m-commerce is surely more than a trend. In fact, several industry experts and thought leaders have already passed the ruling: "Mobile-first is passe, it's time for a mobile-only strategy".
Not very far away from all of this action, but definitely unscathed from the trend is the trio of Varun Kumar Akula, Alok Medikepura Anil, Reetika Reddy and, their startup The Bluebook. In the era of mobile and online discounts, the startup's offering is a book (yes, a physical book) of discount vouchers that can be used at some of the top restaurants, bars, spas etc. in Bengaluru and Hyderabad.
What is The Bluebook?
The Bluebook is a lifestyle guide and voucher book that gives exclusive discounts on all categories related to food, wellness, health, entertainment and leisure at more than 500 outlets in Bangalore. The startup claims the following offerings as part of The Bluebook (Bangalore edition):
- 225+ exclusive savings vouchers from 100 best brands in the city
- Vouchers accepted at 500+ Outlets
- Average savings per customer - Rs 5500
- Validity of vouchers - 1 year, until December 2015
The background story
After Varun graduated from the State University of New York in 2010, he started an export-import firm in Dubai. "I scaled it up to 1 million USD in revenue in the first two years," says Varun. Varun came back to India towards the end of 2012. It was then that he met Reetika through a common friend. Reetika was then employed at Accenture. She quit her job instantly after Varun pitched the idea of The Bluebook to her. She joined as the PR & Marketing Manager. The duo then got a dummy book printed and went around showcasing it to merchants in Hyderabad. The merchants liked the idea and 300 of them came on board. The first edition of The Bluebook was launched in 2013 with 800+ vouchers. The duo ended up selling 3000+ copies of the book.
With learnings from the first edition, the two launched the second edition of The Bluebook in 2014. This time the book had 75 merchants on board and it offered 125 discount vouchers. The second edition was a huge success. They ended up selling over 27,000 copies of this book at Rs 399 a pop.
Around the same time, Varun joined the Stanford Ignite program where he met Alok, a graduate from Boston University, USA and, Cranfield University, UK. Alok happened to have used similar vouchers during his time abroad. He was sold to the idea of bringing the best of Bangalore’s nightlife, microbreweries, F&B options to other Bangaloreans like himself. He shared the idea of launching Bluebook in Bangalore. Together, the trio started operations in Bangalore in September 2014 and launched the first edition of The Bluebook Bangalore in December last year.
Why a physical book in a mobile world?
While the quintessential Indian buyer has latched on to the bag of discounts on offer in the online medium, brick-and-mortar merchants often complain that online deal sites neither offer them the same reach nor bring them new customers on the same scale they do for online retailers.
"We felt offline was a better way to build our brand. Online vouchers tend to often get misused and multiple merchants we interacted with complained about lack of reach of many online deal sites and loss of revenue when majority of the redemptions happen through existing customers, thereby, not driving any new footfalls," explains Varun.
The startup wants to cater to people from all walks of life. The team starts by narrowing on the outlets based on their popularity with the customers. "Our team sits down to decide what kind of offers and discounts would suit a particular outlet based on previous customer feedback. These are, in turn, shared with the merchants for their inputs. Together with the merchants we zero-in on an exclusive offer valid for a period of one year at the specific outlet," Alok explains the selection process for the vouchers.
The Bluebook offers merchants two pages of branding in the book and limits the total number of vouchers to three. The feature acts as an ad space and also encourages a customer to come and try new places for the lure of discounts offered in the book.
"What excites the merchants most is the fact that the book reaches varied customers like corporate employees, students, tourists at the airport, thus providing them a wide range of customers throughout the year," adds Varun.
The book is marketed via different outreach strategies. The Facebook page and the website are the obvious channels. "We reach out to our audience via college ambassadors in different campuses, by hosting corporate events and promoting the book at airport and popular book stores," says Reetika.
All the deals that are part of the book are also featured online so a customer can browse through the listings, read about the outlet, get directions to the outlet and check out The Bluebook offers before purchasing the book.
A virtual book on the website gives a potential customer the look and feel and the layout of the book before they choose to order online.
How do they make money and how much?
The revenue model for The Bluebook comprises of both B2C and B2B channels. B2C is the obvious sales channel wherein customers buy the book. This happens via the website and corporate shows where they sell the books to employees of various firms. The books are also sold at the airport and a few select book stores. Retail sales accounts for 45% of the total sales volume.
B2B sales involves merchants who advertise on the book. "The Bluebook has been previously used by companies such as Hyundai, Nissan, Vodafone, Kotak Mahindra Bank, Microsoft, Meraevents, Ryan to gift their employees and customers," says Alok. B2B sales accounts for 55% of the total volume.
According to the founders, the startup bagged revenues of Rs 75 lacs in Hyderabad in the period of two years from December 2012 to December 2014. It clocked a revenue of Rs 8 lacs in Bangalore in the first month of its operation.
Fundraising and future plans
Well, after all the startup does have plans to launch a mobile app. In fact, they think that the relationship with the merchants and the customers via the physical book will help them create unique offerings with the mobile app.
"A mobile app with merchant backend data integration is in the works and further details will be revealed in the coming months. We plan to bring the amazing offline Bluebook experience to our customers’ phones soon while still allowing them to enjoy the benefits of using physical Bluebook vouchers throughout the year," explains Varun.
The startup tracks voucher redemption via a KYC form that the customer has to fill when they redeem the voucher at the outlet. These forms are collected and the data is uploaded manually. This is one of the problems that the startup wishes to address with the introduction of the mobile app.
Currently bootstrapped, the startup is looking to raise Rs 1 crore to expand to four more cities - Pune, Chennai, Gurgaon and Mumbai and launch its mobile application.
"Our existing merchant base has good presence in all the tier 1 and tier 2 cities in India which would help us in aggregating the deals from the same brands in other cities. Our corporate clientele is spread across India which would again help us in sales in other cities. Our plan is to build a team for each city which would foresee launch of both of our products - the book and the yet to be launched app," Varun delves into the startup's plans.
The exclusive offers from outlets with a long validity period of one year gives The Bluebook a significant edge. In fact, many of the offers which are part of The Bluebook are from outlets that otherwise never offer discounts. However, there is massive competition from websites that specialize in deals and especially those mobile apps which offer similar discounts to users free of charge. The app, when released, could become the game-changer for the startup.
The team is however undettered and signs off with this vision: "We intend to make a Bluebook for every tier 1 and tier 2 city in India in the next three years and aim to sell 1 million copies."
Special Offer for YourStory readers - The Bluebook is offering a limited time offer of Rs 200 off on The BlueBook Bangalore. Apply Discount code YOURSTORY2015 at checkout and avail your BlueBook for Rs 399 Only! Purchase link. Offer is valid till March 25.
Disclaimer: The offer and its T&C are solely the responsibility of the startup - The Bluebook. YourStory is not to be held responsible for any contention that may arise out of this.