Kolkata-based JustShop24 wants a big share of the e-commerce pie
Monday June 29, 2015,
7 min Read
There is a peculiar startup practice prevalent in Iran, one that I just realized has its pilot counterpart in India. There is an Iranian version of Amazon, Youtube and Groupon because the international sanctions imposed on the nation prohibit the Silicon Valley real deals from entering the market.
What will happen to these startups once the sanctions are lifted and the original ones begin to make their way into the country is anybody’s guess. Meanwhile in India there is a boom of online grocery shopping and hyperlocal delivery services. Starting up is never easy, but where the scent of the competition thrills and an ecosystem nurtures, it is easier. Unfortunately in India, that is limited to a few specific metros. For Utkarsh Lohia starting up in Kolkata, albeit with a borrowed idea, presented its own unique set of challenges.
JustShop24 is an e-commerce portal which provides doorstep deliveries of groceries in Kolkata and Howrah. Founded by Utkarsh Lohia, Chetan Sethi and Porav Jain, it is bootstrapped from the personal savings of the co-founders. They plan to raise funds for expansion soon. As a school student, Utkarsh was a computer geek immersed in designing websites and other internet projects. His father owns a bookshop. When not in front of a computer, he spent hours lost in the books there. “We followed Amazon mostly for all book related queries and had planned to open an online book store after completing my studies. But while I was finishing my education, Flipkart and Amazon had captured the entire e-commerce market for books,” he reflects ruefully.
So I explored the e-commerce market to search for new opportunities and an idea that could solve problems for people. The idea of online grocery struck my mind because there were (at that time) no such services available in the city.
A qualified Chartered Accountant, Utkarsh worked with Ernst & Young for close to four years before deciding to strike out on his own. He studied the business models of established players in this arena closely for research. “We did study the business models of other big companies in the same sector. They have their own supply chain established in terms of huge warehouses and large logistics. Big companies like Bigbasket have a huge volume of daily orders and keep an inventory of almost all products.”
But JustShop24 isn’t quite there yet. “However we are working on a limited inventory model. Since we are a new startup and still getting hold of the market in terms of demand and customer preferences, we haven’t kept much of an inventory. We stock only fast-moving items and have tie-ups with dealers for other items. Our supply chain is optimised to get the order fulfilled within 24 hours. But we guarantee a maximum time of 30 hours. We generally deliver most of the orders before time only,” says Utkarsh.
When the TMC government came to power in West Bengal in 2011, rooting out 35 years of CP(I)M monopoly, they did so by riding a wave of anti-industrialization sentiments thanks to the departing government’s brutish handling of the Tata-Singur debacle. But a company like Tata could easily to whichever state was wooing for its business. Not like starting up in Kolkata in the heyday of the communist government was easy. But post TMC, it’s torturous. Utkarsh says, “There are stringent licensing requirements and lots of resources have to be expended to ensure the same. You need to spend extra time and money to get everything setup in an organised manner after ensuring all compliances.”
It would be unfair to blame the government for everything though. He relays, “Yes there are numerous difficulties beginning from legal and licensing requirements to delivering the final product. But the major problem compared to other metros is convincing the people. People here are not tech savvy and resist changes. There are very few platforms to support new startups. Also Kolkata is a highly price sensitive market.”
The upside is that there are tons of indigenous advantages to starting up locally. “Things are cheaper whether it is office space, establishment cost, web designing, warehousing, etc. Startups can save tremendously on initial costs. The market is not filled up with numerous startups, so there is a huge potential for every new company to explore. Traveling and reaching from one end of the city to the other is relatively easier in Kolkata as compared to other big cities which contribute to heavy logistics cost. Also the general population is unaware about the latest technological trends. So people find new startups very exciting,” Utkarsh comments.
In terms of challenges, JustShop24 isn’t bothered by what’s past but bracing for what’s to come. “There are several challenges in our industry which occur at a later stage. It’s just been three months since we started up (since March 15th), so we are yet to face most of the difficulties and challenges. Till now we were mostly dealing with completing the pre-incorporation tasks, recruiting the right people and frame effective policies for internal use as well as for customers. But post three months of operations, our focus has shifted to marketing and operations, acquiring new customers and fulfilling their orders efficiently.”
They have extensive plans for expansion. “Once we have a stronghold on the Kolkata market, we
plan to diversify into medicines and other goods. Also we have plans to diversify geographically to other Tier-II cities in India,” Utkarsh says. The growth they are witnessing are emboldening their ambition. “In India e-commerce is growing across all verticals. The grocery industry is the biggest retail industry globally and in India. It is evolving fast and we are glad to have got a foothold in it.”
They are also heartened by the customer response. Utkarsh is excited to relay JustShop24’s major milestones. “In the initial month we didn’t spend much on marketing. Once we started marketing our venture, we got an overwhelming response. Our initial milestones may not be that huge but at this stage of starting up, it means everything to us.
We started off with five to six deliveries a week and have reached a level of 25-30 deliveries daily. We reached the top 4 rank in google search results for keywords containing ‘online grocery shopping Kolkata’ within two months after launching, amid tough competition from already existing websites. We have 100 plus daily users visiting our website. Above all, when we read our customer testimonials, we know we are doing something right.”
As an undergraduate when Utkarsh envisioned inaugurating online grocery delivery in Kolkata, there may not have been any players in that segment. But now JustShop24 is one among a few, jostling for customers among competitors that are over a year old. Utkarsh believes their much newer startup has a firm advantage. “There are a few online grocery stores already running in Kolkata. They are SaltnSoap, Homegennie and OnlineGroceryBazar. But we think our ‘No questions asked return policy,’ customers getting to place their orders on WhatsApp and our decision to not charge anything extra for plastic bags or credit card payments gives us a clear edge over our competitors.”
For Utkarsh the worst part about starting up was quitting a high paying job, after suffering through the rigours of qualifying for chartered accountancy, to face an uncertain future. The best part is having the ability to tap into a market with unlimited potential for growth. “Grocery is a necessity for everyone. I can reach out even to an auto driver for buying groceries on my website through his phone.”
Being a newly minted entrepreneur he feels unqualified to offer advice, but reiterates the one thing that has held true for him. “Don’t think too much. Just start up. Things will fall in place one by one. If you start up you might succeed or you might not. But if you don’t, you simply cannot.”