Every year 150 million appliances come into service centres and brands have no way of catering to all of them.
Nithin Malhotra and Anuj Aggarwal walked into Snapdeal’s office in November 2015 with a proposal to offer after sales support to all electronic items sold on the portal. They made a pitch for control of after sales service in one city. Impressed with their energy and commitment, the managers at Snapdeal couldn't say no to them.
Now, two years later, everyone from Amazon to brands like Bush, Akai, Murphy, Daewoo are on 247around, the after sales service platform built by the duo.
Imagine buying an appliance or a TV on Amazon, Snapdeal or ShopClues. The consumer may need to install it or a few months later they may have some issues that need to be addressed.
The outfit, 247around (twenty four seven), is hailed by e-commerce biggies to sort consumer issues and ensure that any fault with the appliance is fixed.
All one has to do is download the 247around app and reach the service centre authorised by the brands on the platform. The brands are able to manage customer loyalty efficiently thanks to 247around.
The startup was founded in April 2015 by 35-year-olds Nitin and Anuj, who hailed from the electronics industry and knew that each year 150 million appliances come in for repairs in India. “The appliance services sector was polarised with fly-by-night operators who could not be trusted with quality spare parts on one hand and service centres that catered to only products of their own brand, on the other end,” says Nitin. He says that the duo saw this as an opportunity and left their cushy jobs to build 247around as one of the best repair services brand in India.
Earlier, the founders had spent 11 years in some of the top electronic companies like ST Microelectronics and Texas Instruments. But it was in April 2015, when e-commerce was booming, that the duo decided to start their business around discovering electronics handymen.
The initial business model was a discovery platform which enabled customers to find a handyman through an app called Boloaka. The business provided information about the handymen and their core skills, experience levels, location, certifications and other customer ratings, without having to physically search for them in the neighbourhood. But the business was yet to create something of value to consumers. They found their answers after talking to brands.
They realised that several brands did not know how to set up after sales service centres and needed expertise in the field to care for after sales. Nitin and Anuj realised that this was their biggest business opportunity and completely pivoted the business into a customer care and after sales service provider in August 2015, for various brands.
According to EY, the consumer electronics industry is going to be worth $20.6 billion by 2020. At any point of time, the installed base of home appliances in India is one billion, of which more than 150 million come in for repairs every year. There are 400-plus consumer electronic brands in India, with new entrants not having any service presence.
Additionally, each appliance from the installed base needs a portfolio of services in the entire lifecycle of the product; from installation, demonstration, repairs, extended warranty, annual maintenance contract, etc. The Indian appliance after-sales support market is to the tune of $5 billion.
“We observed that both B2C and B2B customers wanted us to take complete responsibility of the service, rather than just connecting them to the handymen,” says Anuj. As these jobs were technology-intensive, we realised that a warranty attached to the job would help build credibility.
They started appointing service centres, which would ride on the 247around technology and work as authorised service centres, abiding by the terms and conditions laid down by the company.
“Every startup should realise that there is a market and that it should bring revenues. Also, the offering must be unique,” says V Ganapaty, CEO of Axilor Ventures.
In pre-revenue stage, the company invested in building a discovery app, cloud-based backend and service professional onboarding. Industry experts saw that the discovery business did not scale up and LocalOye shut down very quickly.
The competition in the discovery segment is plenty. Housejoy has done well in beauty services and is still fixing the handyman jobs vertical. Servify, Easyfix, Mr Right, Servmobi have fragmented presence and remain in a few cities in India. Taskbob and Doormint shut businesses as the revenues did not kick in.
It was imperative that 247around did something beyond discovery and rightly got into setting up customer care centres.
“Once we moved to the new business model we were carefully expanding utilizing the earnings,” says Anuj.
The company did not raise any external investment and used its profits from the B2B business (serving brands like Bush, Akai) as seed money.
The company has expanded from just one city in 2015 to reaching a total of 450 cities. The company says it is scouting for a million dollars to fuel their next round of expansion. Says Nitin,
“Unlike others we are not raising money to create a business model, we have already scaled and are generating revenues.”
The company today caters to more than 12,000 pin codes across India. Its three revenue streams are: installation, repair and buyback targeting 1,10,000 transactions in 2017.
“We expanded from 850 to 6,500 transactions without adding a single employee and it is all thanks to our app,” says Anuj.
Now let us just hope the e-commerce companies use this business to the fullest and ensure more sales on their platform.