Nexus-backed Goodbox aims to bring together small time retailers in Benglauru who want to build an online presence among their customers without facing the hassle of huge commissions
Shobha is the quintessential woman who has her produce stocked well in advance to avoid repeated visits to the kirana store. But today, unlike any other day, she wakes up to an empty milk tray in the refrigerator and hates the thought of having to make that walk. Suddenly, her phone beeps. It’s a Whatsapp message notifying her of a delivery of staples. Jumping at the opportunity, she immediately texts back with an additional order for two packets of milk.
Now, that’s not how the story goes for most of us but, for the residents of Bengaluru, this has become commonplace. Goodbox, a chat platform which was launched in early 2015, is responsible for ushering in this change. For small scale retailers who want to be a part of the e-commerce bandwagon but are irked by the commissions, the startup offers a chat platform where they can directly connect with their customers to receive orders on goods and services. “When we were looking for sustainable business ideas to build on, we came across articles which spoke about how vegetables are being sold on Whatsapp. That’s when we decided to experiment with Goodbox,” says Abey Zachariah, the co-founder.
“While it is a platform where consumers can chat with retailers, it hasn’t been designed as a ‘chatty’ platform, where either party has to engage in continuous conversation. There’s just a menu from which the consumer selects and the list goes through the chat.”
The startup, which currently operates only in Bengaluru, was the brainchild of Zachariah and six other entrepreneurs, Mahesh Herle, Charan Shetty, Mayank Bidawatka, Mohit Maheshwari, Anand Kelaginamani and Nithin Chandra. Of note, Zachariah and Bidawatka were the former core employees at RedBus.
Currently, the Goodbox mobile app has 3,000 merchants and 60,000 downloads on its app platform. Going forward, the company plans to strengthen its position further in the city and eventually look at entering other Indian metropolitans.
Setting the right pace
“The first lesson we learnt as we began rolling out the business was not to go crazy on scale,” recalls Zachariah. This lesson came at a time when the company was signing merchants on board and realised that although it had 200 merchants on the platform in the first quarter, most of them were not active and merely looking for lead generation. This led to a shift in strategy and a narrowing down to a segment it calls daily commerce. “Typically, it is the small time merchants and kirana store managers who need this app the most, but don’t have many people addressing it,” he adds.
While it began with groceries, the segment eventually expanded into restaurants, laundry and other categories leading to the 3,000 merchants and 60,000 downloads on its app platform today.
Getting the product right
The founders were clear that they didn’t want Goodbox to be just a chat platform. Hence, while it began as that, they eventually created a technology through which a consumer could create a list of products he/she wants from a particular retailer and place the order. “This particular technology went through three iterations. What we have now is the third and more refined version of the feature,” says a candid Zachariah.
Interestingly, while it is a platform where consumers can chat with retailers, it has not been designed as a ‘chatty’ platform, where either party has to engage in continuous conversation. “There’s just a menu from which the consumer selects and the list goes through the chat. Retailers are willing to go this far because they want to be online, in a place where they can connect directly with the customer,” he explains.
Typically, Goodbox operates on a revenue model wherein it charges the customer a 1.99 per cent TDR on every payment made through the platform and takes an annual subscription fee of Rs. 999 from retailers. While it doesn’t have any direct competitors in this space, Goodbox must have an eye on wallet businesses which are attempting to digitise payments for the local shopkeeper and hyperlocal delivery startups which are aggregating delivery and logistics services between small merchants and customers. “In fact, we give our customers an option of having the products delivered through Roadrunnr by signing up with them for logistics services,” says Zachariah.
Gaining investor confidence
Apart from a seed round of Rs. 1 crore from Manipal Group and Rs. 20 lakh from two undisclosed angel investors in May 2015, in a span of six months, the company raised a Series-A of US $2.5 million from notable investors such as Nexus Venture Partners, Taxi4Sure’s Aprameya Radhakrishnan and RedBus’s Charan Padmaraju. “We raised the seed round through personal connections. Our Series-A sailed through because we had a great deal of comfort when we spoke to our investors about our business plan,” shares Zachariah.
Goodbox has also made a recent acquisition (in January 2016) of SmartPocket, a platform that allows customers to digitise their loyalty cards. “With the acquisition SmartPocket’s founders, Mayank Shah and Kiran Shastri, will join the leadership team and the employees will become a part of Goodbox,” says Zachariah.
Having learnt its lesson on scaling early in the business, Goodbox is in no hurry to rapidly expand into other cities with its chat platform. In the coming year, it wants to focus on refining its app for its customers in Bengaluru and then consider entering new markets. As Zachariah believes, if the platform works in one city, the same can be implemented in other cities as well with the primary change required only in its marketing approach, which currently includes in-store promotions, radio advertisements and word of mouth.
Concept: An online chat platform for small time retailers to connect directly with consumers to receive product orders
Investors: Nexus Venture Partners, Taxi4Sure’s Aprameya Radhakrishnan, RedBus’s Charan Padmaraju and two undisclosed angel investors
Impact: Signed 1,200 merchants across kirana stores, restaurants, laundry shops and more and has recorded 60,000 app downloads