With Snapdeal as its majority stakeholder, SaaS-based order management and fulfilment platform, Unicommerce, aims to add one lakh sellers by the end of 2015 and foray into the hyper-local fulfilment space.ANKIT PRUTHI, CO-FOUNDER, UNICOMMERCE
Quit your job. Brainstorm for ideas. Talk to experts. Hold a survey. Arrive at a model.
This is the usual drill most aspiring entrepreneurs follow (not in any particular order) when they want to be their own bosses and pursue their passion. This is what Ankit Pruthi, Karun Singla and Vibhu Garg did too before they founded Unicommerce eSolutions Pvt. Ltd. (Unicommerce), a SaaS-based order management and fulfilment platform. Since all three were from a technology background, their attention naturally turned to e-commerce, which continues to be the newest space to be in. Wanting to build something that was an overlap between the two (e-commerce and technology) they arrived at two possible business ideas; one, a warehouse inventory solutions firm or two, a payment aggregator for e-commerce companies. They decided to settle for the former owing to the inefficiencies they noted in the way the orders were processed at e-commerce companies. “Owing to our relationship with Ankush Mehra (who carries over 20 years of experience in supply chain operations) we managed to sneak into the warehouse of one of the top e-commerce companies and found a few inefficiencies in the system. This helped us further strengthen our model,” reveals Pruthi. When prodded to elaborate on these inefficiencies Pruthi says, “For example, if there are 10 iPhone orders lying on the main shelf of the warehouse, it is better to club the orders by shelves, zones and regions, rather than club them by orders. There was a need to prepare algorithms to optimise the picker path (optimising the journey of the product from the time the order is placed to the time it is delivered),” he explains.
By early 2012, the company kicked off operations and by the end of that year, it on-boarded several key e-commerce companies such as Myntra, Jabong and Snapdeal. At the early stage it secured several insights into how the process works at the back-end and this helped Unicommerce gain the dvantage of predicting how the process will evolve as the market grows. For example, earlier, most e-commerce companies used to buy goods from the sellers and in turn sell it to the end consumers. But, this model was further tweaked in 2012. Companies moved to a drop-ship model wherein the sellers were directly allowed to sell products to the customers. “At this point, we realised that either this model will be prominent or both the models will co-exist. Hence, we designed our solution in such a way that it can adopt these changes,” indicates Pruthi.
On the evolutionary path
With the adoption of the drop-ship model came the second turning point for Unicommerce. In this model, the onus of order fulfilment now lay with the sellers. Since they were typically SMEs or distributors who are used to retail selling, they didn’t know how to pack for an e-commerce order fulfilment. “They were literally packing 200 different units for 200 customers and invoicing and order management turned into a nightmare for them,” says Pruthi. In other words, for every e-commerce player they had partnered with, they had to open a different panel and update the order status, which was a cumbersome process. Realising that a lot of value can be delivered here, Unicommerce designed a central console for the marketplace sellers, wherein, they can receive orders for all marketplaces in one platform and upload inventory status only on the Unicommerce platform, which will be in real-time sync with the e-commerce companies. “In a way, it also allowed them to sell more because earlier they had to block a certain inventory in each e-commerce site,” he notes.
Currently, Unicommerce works with 3,000 paid sellers and records 3.5 million transactions a month through these sellers. To further leverage this segment, it has recently launched a Lite version of the product, wherein small-time sellers who transact 10 orders a month can come on board. “We expect that, by the end of this year, e-commerce players will have at least half a million sellers on their platform. Through our Lite version, we want to tap at least 20 per cent of that segment,” he shares. The team’s vision is to sign at least one lakh sellers on its platform by the end of this year.
Another key feature the company has introduced recently is its payment integration platform. To explain this better, Purthi elaborates; in every e-commerce marketplace, there are four parties involved – the marketplace player, the seller, the logistics provider and the customer. Typically, the status of every order placed by a customer is updated individually on the e-commerce platform, the seller platform and the logistics provider’s platform. This being the case, in a particular circumstance, if a customer has returned a product, the seller may or may not be aware of it and this results in a discrepancy in payment due to him or her. To avoid this, Unicommerce has developed a solution which will help the seller identify payments which haven’t been cleared by the e-commerce company. “Usually, there is a four to five per cent discrepancy in payments but with this solution, we aim to eliminate that as well,” clarifies Purthi. Due to be launched in late July, the company plans to initially offer the solution to 100 odd sellers and gradually expand.
Unicommerce sees only one direct competition in this space; Bengaluru-based BrownTape e-commerce Pvt. Ltd, funded by Seedfund Advisors and serial entrepreneur K. Ganesh. Even here, the team believes that it is well ahead of the game because being a first-mover has helped it refine its product and offer better features to its sellers. “Additionally, from a market share perspective, the industry records 20 million orders a month and we are already doing 3.5 million orders a month,” he reinstates.
In the times ahead
In May 2013, the company raised its first round of funding from Nexus Venture Partners, a majority of which was channelised towards technology innovation and sales support enhancement. In March 2015, Snapdeal invested an undisclosed amount of funding into the company to further scale its operations. “Though Snapdeal is a majority investor in the company, Unicommerce functions independently,” says Purthi.
Talking about the company’s fund raising experience, Purthi indicates that the process was smooth because at the early stage, cracking a few big deals (winning customers) and communicating this in public effectively led VCs to approach them. “We went with Nexus because they carry prior experience in this segment and we felt they are the right partners within the ecosystem itself,” he opines.
With product and technology innovation being the primary focus for the company as it scales up, Unicommerce is simultaneously implementing several marketing strategies to add 2,000 sellers on its platform every month by the end of this year. “We are experimenting with different strategies like email marketing, Google Ad Words and live events. Every year, we invite close to 200 sellers in different pockets of the country to participate in the event and learn about integrating technology onto their platforms,” explains Purthi. The team credits Manish Gupta, the former National Sales Head of Indiamart and the current sales head of Unicommerce, for its marketing success.
With a 200 per cent increase in growth every year, Unicommerce soon plans to enter the hyper-local fulfilment space and position itself as a leading innovator in the e-commerce fulfilment space.
Unicommerce eSolutions Pvt. Ltd.
Founders: Ankit Pruthi, Karun Singla and Vibhu Garg
Concept: An SaaS-based order management and fulfilment platform
Investors: Snapdeal, Nexus Venture Partners
Impact: Signed 3,000 sellers on board with a record of 3.5 million transactions every month