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O2O - Our Firsthand Experience

From a small time Juice Center to 200 Crore Offline Retail to Online transition and we still feel young !!

We never thought that we will reach so far so quick. We never thought of having pan India presence and catering to so many customers. We never thought that we would be able to survive in the E-Commerce market, where the burn-rate is so high and we never thought that consumers would pick us in against competition of Amazon, Flipkart or Snapdeal. This all started with a little phone call

In middle of March, after a heavy Sunday brunch, I was lazying at my place and Sanjeev called me. Sanjeev is the biggest telecom retailer in West India - having built his business from scratch - literally scratch along with his brother, Nikhil- and I share a great equation with him. He called me to share experience of his relative - who had purchased a mobile phone of a reputed brand from a certain market place and denied warranty from the service center since it was considered an un-authorized purchase. We were just discussing that and we realized that there are so many customers whose online shopping experience - especially after sales service is poor because of one or other reason. Market places can keep little control over their sellers they just provide a mere platform to sell mobile phones. They really cannot control the pricing, material authenticity and we all know the frequent experiences of buyers surfacing on social media about receiving soaps or stones in lieu of ordered mobile phones. Sanjeev & Nikhil have often come across such consumers who visit his stores and asking for the help in such cases - esp in warranty denial from the brand - reasons are multiple - lack of proper invoice, lack of product authenticity proof, unauthorized sales over E-Commerce portals by sellers (We do not blame the market places, it is the model which is faulty right now). Most these customers are from Surat city. Both of us are aware that price and convenience are the biggest factors besides vast portfolio that even the same city customers are opting for online shopping and that was the whole deal. We thought, why not to take our store to the customers place (we already have 96 mobile retail stores) and why not push our selves to ensure that they get the right treatment. We sensed a business opportunity down there.

We shared this idea with many people around us, and people literally made fun of us. How can you sell mobile phones at cheaper prices than the big 3? How will you ship your products across India? How can you even dream of this being in Surat - which is not a startup city? Do you have experience for it? But we just wanted to learn and unlearn many things of our experience.

It took around 45 days to built our website - OnlyMobiles.com - and we were live, I am writing this exactly on the 50th day end - and we are feeling very proud of what we have achieved by achieving synergy among our offline & online play.

2,984 Orders  this is the count of orders which we have received across India. Our first order was from a Meghalaya customer and our last dispatched order of today is from Azamgarh. We are not fan of GMV but for the record - we just felt short of Rs 3 crore value  orders.

3.2% Conversion Ratio We are in competition with Big3 - and trust us - barring exclusive models - our pricing is much better than any of these market places. We have achieved this by very prudent stock management, JIT philosophy and our hunger to sell new models first online than the Big3. For many new models launched by the brands - we are the first who starts selling online and that have clearly helped us to get more traffic to our site

Less than 10% RTO Ration You may call us  conservative but we have our unique methodology to scan each order which we receive and identify not-so-serious orders. Though we approach each and every customers but we weed out the orders which are actually not confirmed.

4.5 Days O2D Rate One can achieve this without investing millions into a logistics network setup. Though much credit goes to our back end team for this, they have ensured that almost 96% orders get dispatch on the same date itself.

0.00% Burn & Positive Unit Economics Sounds funny, right? but that is our real achievement. We are unit economics positive and we may break even in next 100 days flat. Each order which we are catering is with profit only still we are able to maintain our pricing when it comes to Big3.

but probably, the biggest beneficiary is our offline business -

96 Stores we naturally cannot keep 1,400+ models and almost 4,000 skus in all our stores, which are ranging from 300 sq ft to 1800 sq ft. but now our store team members can sell almost all models even if they are not having stock on hand. They showcase the model to the customer, customer approves it and then our back end team delivers the same at customers' house or office. In 3 hours flat - customers are getting their orders at their doorstep. We are not loosing customers because of space constraints.

New Product Categories We were always reluctant to sell accessories - mainly because of the fear of dead stock but now customers are selecting them over the App or Website and we are able to provide them the same. We do  not have to keep heavy inventory.

New Customers We keep on getting new customers to our offline stores but the biggest achievement of last 50 days is - we have started getting those customers who used to prefer Big3 for specialized accessories or models. Just to give you an example - we were never able to provide EMI to customers who want to purchase mobile of less than Rs.10,000 because finance companies do not support it and Customers do not feel comfortable to convert their purchase into EMI post card swapping at our stores. But with the help of our site, now we are able to offer them the same facility.

Increased Brand Image We are definitely seeing that our brand image has improved a lot. For many consumers we are now a "BIG" retailer who is serving customers across the nation. Many small town customers who used to rely on Big3 for their electronic purchases are now coming to us because of two factors - Our known identity and our assurance for product authenticity. 

Our Learning

01) Product Pricing is most important Do not be greedy. Measure your expenses and plan your pricing well. Be vigilant when it comes to pricing but do not sacrifice your objective of profit for the sack of customer acquisition or just for orders

02) Never sell the product, which is sub standard You may get great margin like others, You may be able to offer great deal to the customer but remember sub standard products never bring your customer back. They will simply run away from your product

03) Help your customers to chose the right product Our team always ensures to ask the customer during order verification if they want to know something more about the product which they have ordered? if you are able to remove all doubts of the consumers over the call - trust us, you will see lesser return ratio.

04) Never lie about delivery timelines - We have seen consumers cursing e-comm players because of delayed delivery and false delivery commitments - (Actually it is not even in their control because they do not own the inventory) - from day zero we have been pretty lucky to get our logistic right and we have always ensured that we maintain our timelines. There are cases, where deliveries are getting delayed but in such cases, we always make sure that we inform the customer and do not keep him waiting and surprisingly, we have realized that customers actually appreciate that.

04) Chose your team wisely we really do not know what clicks among us but we are great team. it is very important to get the team who shares the same passion and it is also very important that they table their arguments well. We firmly believe - difference of opinions are must.

Way forward to us

01) Today, we are clocking 200 crores per annum as offline retail - we aim to grow by 20% in offline retail and online retail should generate at least 100 crores in next 2 years time line.

02) We are planning to have small warehouse kind of facility in Hyderabad and one at Delhi - just to take care of 30 top selling SKUs.

Last 50 days were like roller coaster ride. We learn and un-learn almost everyday. But the joy of getting more customers in this fierce mobile handset retail market is pure joy !!



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