Bootstrapped Jumbogrocery claims Rs 50 lakh monthly revenue, profit
Jumbogrocery is a Delhi-based B2B grocery platform for hotels, restaurants, and caterers.
If grocery shopping for everyday needs can be difficult, one can only imagine how stressful it would be to shop for a restaurant, hotel, or catering service. Sumbul Siddiqui, who had spent 18 years in the hospitality and telecom industry, felt she needed to do something about making the whole process less tedious.
So when the 40-year-old talked to several hoteliers and restaurateurs, she ended up meeting Abhishek Kumar, her co-founder, who had successfully launched two startups, Dealgali and Vrinchi Software, in the past.
While having coffee with another restaurateur friend at Starbucks in Ambience Mall, Vasant Kunj, Sumbul overheard a conversation wherein one person was trying to convince another that a CTO is not simply a techie but someone who understands business operations and builds a platform with an outside-in approach, based on the needs of the market.
“Looking at his passion and commitment I took a chance and walked up to him. We realised we had two common friends apart from the fact that we both were passionately talking about building a future-centric platform to fulfil a large market need,” says Sumbul, talking about how she came to join hands with her co-founder.
Focusing on the HoReCA segment
Jumbogrocery is a B2B grocery platform for hotels, restaurants, and catering houses—popularly known as the HoReCa segment—and other large institutions serving food and beverages. The main reason for the duo’s focus on this space is that unlike B2C grocery, B2B is highly fragmented and inefficiently managed with multiple vendors servicing a single client.
The other inefficiencies include a manual process of ordering, low management visibility on pricing, fewer options to choose from, uneven pricing, no quality control, and multiple man hours and human resources.
“We believe technology is a big enabler in procuring and managing supplies for the HoReCa industry. We work to streamline complete end-to-end procurement processes. Our platform enables strong supply chain integration with manufacturers, a robust technology platform, an extensive, well-researched product range, and complete platform-integrated logistic setup,” says Sumbul.
Jumbogrocery follows an automated solutions approach for procurement, transparency in pricing and billing, and reduction in food cost. It directly sources from manufacturers, thereby removing the middlemen, and features high-quality branded products.
Within the platform and in the process the team also claims to have created features such as contracting or ‘on-the-go’ delivery, dynamic discounting for bulk purchases, buyer dashboards to effectively manage spends, and multi-channel touchpoints that are tailor-made for the industry. Says Sumbul,
“Our objective was to create a platform that would fill up the gap in this highly disorganised market without forgetting the most basic principle of doing business—positive bottomline. It took us over five months to create a strong backbone for our operations. We created an asset-light model with close to ‘zero-inventory’ structure to ensure minimal surplus. Our intelligent algorithms help us manage the inventory without excess stocking up/blocking our working capital.”
Growth and numbers
The team claims to have an exclusive tie-up with ICICI Bank that helps them provide a co-branded business purchase card. This enables Jumbogrocery to offer up to 75 days interest-free credit to eligible organisations. Apart from Sumbul and Abhishek, the core team comprises Samar Alam—who has spent a decade in the hospitality industry with leading international hotel chains in the area of food and beverages—as a mentor and advisor, and Sharad Chauhan and Jitender Kaushik.
Jumbogrocery today claims to have a 90 percent repeat clientele spread across Delhi and Gurgaon covering all possible segments of F & B luxury five-star hotels, high-end restaurant chains, mid-size five-star hotels, hospitals, takeaway joints, corporate caterers, and standalone joints. The average order size is at Rs 50,000 and average monthly sale is Rs 50 lakh. Sumbul mentions that they have had a positive bottomline for the last 15 months, and have zero cash burn.
But the ride hasn’t been easy. Sumbul says that coming from a corporate world after having worked for 18 years in plush offices, the first challenge was to step out in the sun and look for a decent place for office space at minimum cost. “Keeping expenses as low as possible was at the top of our minds yet a strategic location to save delivery cost. Being a woman entrepreneur also comes with its own set of issues—be it landlords, vendors, manufacturers, or even some restaurateurs,” she says.
Fighting against the odds
Apart from this, the team also had the operational challenge of finding the right manufacturers and suppliers, sourcing products at the lowest possible price, convincing partners for an extended credit timeline against payables, curating detailed lists with all possible brand options, ensuring the platform creation was done with an outside-in thought process, managing finances, and developing an executable business model. Sumbul says,
“We still remember our initial days when we were meeting a lot of wholesale vendors and as part of my market study I went and met people at wholesale markets/offices. We used to share our vision and concept with the vendors—some were open but some looked at us as competition. Those conversations led us to create a model which provided value to not just customers but also to our vendors.”
The current clientele includes JW Marriott, Hilton, DoubleTree by Hilton, large restaurant chains like Punjabi By Nature, Biryani Blues, and high-end corporate caterers serving American Express, Snapdeal, Accenture, and Airtel, to name a few. Jumbogrocery has also received a recognition certificate from the Indian government as part of the StartupIndia Initiative and are listed as a startup with the Ministry of Commerce and Industry.
“We are one of the few startups that now have the opportunity to look at availing the benefits that come as part of the Startup India programme—funding, tax exemptions, capital gains exemptions, patent filing fee waiver,” adds Sumbul. Apart from this, they are also looking at increasing scale both in locations and line of products—they would also like to provide this industry services such as equipments, linen, tableware, allied services that helps restaurant consultants, chefs.
However, the HoReCa space seems to be gaining a lot of traction and attention over the past year. A 2014 Walmart report suggested that the B2B e-commerce market in India is likely to touch $700 billion by 2020. Specifically in the grocery segment, BigBasket seems to be eyeing the market opportunity and has opened its B2B wing—HoReCa. Ahmedabad-based GrocNation ventured into the B2B segment by doing away with the B2C wing.
“We are looking for partners, be it strategic or visionary investors who would share this vision and help us grow a healthy and sustainable business. Our vision is to become the most preferred procurement partner for the hospitality industry. Our mission is to simplify, redefine, and redesign the procurement process in the industry. We want to be the Google for grocery and Amazon for customer experience,” says Sumbul.