IIT Bombay alumni join hands to start hyperlocal platform for doorstep delivery of fresh breakfast essentials

20th Aug 2015
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Imagine you start your day with a breakfast of champions: fresh fruit, hot buttered bread that is like pillow in your mouth and a tall glass of creamy fresh milk. Wouldn't it be a dream come true? That's exactly what RainCan intends to do, by bringing fresh essentials and groceries to your doorstep.

A subscription-based prepaid service, Raincan provides everything you need for a scrumptious breakfast right at your home. All the essentials like milk, bread, eggs as well as other fresh produce like vegetables and fruit are provided under this model. As the company follows a hyperlocal model, everything is available on order within a few hours.

"Customers place a default order, which can be modified by sending a message the day before via RainChat, calls or through Whatsapp. Order fulfillment happens through sourcing from distributors early in the morning, followed by delivery from our operations team," says Abhijeet Kumar, cofounder of RainCan.


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The team

He adds that the concentrated nature of operations helps the team in doing substantial amount of deliveries within a small period of time, and says word-of-mouth marketing is a potent force. Based out of Pune, RainCan was started by a team of friends from IIT Bombay.

"Munendra and I are from 2005 batch at IIT Bombay. We have been in touch and have worked together on multiple projects. Before RainCan, both of us founded an agri-based venture in 2010 where we were grew exotic vegetables and cut-flowers in greenhouses, and sold them wholesale as well as through our website. This experience helped us gain understanding of the retail supply chain especially that of perishables," says Abhijeet.


Also Read: A scientist, doctor, ex-Nokia employee, and entrepreneur build an online marketplace for organic products


Why breakfast?

On why they chose breakfast particularly, Abhijeet says although breakfast is considered the most important meal of the day, it oft the most sidelined or ignored one. He adds that breakfast essentials are not being delivered fresh daily and thus households end up hoarding, causing them to go stale. People either ignore or have stop-gap solutions for breakfast and planning meals for the day is hardly done in most households.

"There is a lack of hygienic food available from outside, in cities. We aim to solve all these problems by providing fresh produce for customers’ daily requirements every morning so that they don't have to hoard anything. We are also developing predictive analysis platform to help users plan their daily/weekly requirements in advance," adds Abhijeet.

Hiccups

However, along with the other dime-a-dozen hyperlocal platforms, RainCan too has faced its set of challenges. Although the team believes in a multiple customer subscription platform, delivery within a span of two hours proves to be a great problem. To overcome this challenge, the team is setting up its logistics platform that will be powered by several apps for interaction, updates and real-time information. "We will have a unique delivery system to serve huge number of orders per area in very short time span," says Abhijeet.

Another challenge the team has had to solve is customer inertia. Abhijeet says that it requires lot of hand holding and customer education. The team has tried to make the whole process customer friendly, starting from on-boarding, ordering, delivery and payment. Customers can order via website, app, Rainchat, WhatsApp and pay using recharge, COD, or online.


Also Read: Mumbai-based Yummade is betting big on fresh homemade packaged food


How it works

The team has enrolled customers in a subscription model under which they are offered product categories such as dairy, bakery, perishables and staples on a daily basis. It also provides customers with multiple communication channels such as chat/call/text so that they can easily modify, pause or stop the services.

"In addition to this, we also offer customers top-up across 4,000 SKUs in categories like staples and daily care. We deliver all these products in three hours, while the morning essentials are provided within the six to eight a.m timeslot. We have tied up with distributors across our product categories from whom we source JIT. We don't keep any inventory. Currently, we are doing 100 orders a day and targeting 500 orders within a month," says Abhijeet.

Funding and traction

The team has bagged an angel investment of USD 100K from angel investors one of them is Ajeet Khurana former CEO of SINE, angel investor and mentor. Ajeet says, "I had not realised how much value could be added to a seemingly simple task of fulfilling daily purchase needs. Engaging with RainCan founders has been a real eye-opener."

The team intends to utilise the funds to improve delivery infrastructure and add more customers to the subscription platform. "Greater the number of transactions per customers, the better we are at identifying consumption patterns to forecast and plan for daily and weekly consumption per customer," says Abhijeet.

Future plans

The team is looking to raise another round of USD one million, for which it currently is in talks with VCs and angel investors. "This round will help us invest more in team building, technology for better customer experience, and marketing which will help achieve transactions of 10,000 orders a day. This will ensure we cover the city of Pune in a reasonable manner. We will also start running pilots in other select cities as well. We intend to add more products under the subscription model, incorporate private labels and build better technical infrastructure to support the entire ecosystem," adds Abhijeet.

Market space

Everyone today, from established e-commerce giants to new startups, seems to be joining the hyperlocal bandwagon today. Hyperlocal is today's biggest buzzword. Most believe that the market potential is massive as the space is highly unorganised and scattered.

Speaking about thesis behind Jugnoo, its founder and CEO, Samar Singla, said, “No one has tried to help autowallas minimise their dead inventory headache. Close to 70 per cent of the time they don’t get work. We are trying to solve this problem via ride booking and enabling hyperlocal deliveries.”

The segment is currently abuzz with activity and with the entry of bigger players, we can expect marketing games like offers and discounts to mushroom. However, the boom is just beginning, and we cannot rule out consolidations.

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