Pankaj Garg founded DailyObjects.com, an e-commerce player focused almost entirely on selling its own brand of smartphone cases. The Seedfund portfolio company has already broken even and is now ready to scale to the next level
Smartphones have become an integral part of one’s life, not only for communication purposes but also for enabling ancillary transactions. The cases to protect the smartphones have been around for almost as long as the phones themselves, but Gurgaon-based DailyObjects.com has gone a step further to enable buyers to personalise the cases. It allows customers to own individualistic, designer cases that go with one’s personality, for a variety of smartphone models. “Sometimes, the site sees multiple orders from the same customer for the same phone, suggesting customers are willing to spend a bit more for variety,” explains Pankaj Garg, Founder.
Pankaj Garg belongs to the Marwari business community and though he worked as a software engineer with Patni Computers from 2005, in his own admission, business was in his blood. In 2009, he quit his job and started Saledekho.com, an online marketplace for retailers offering discounts and potential customers to find out about deals. While the website saw good traffic, it was unable to generate revenues.
In 2010, Garg realised that people were also keen to order online. It was still the early years of e-commerce in India and the ecosystem for selling online was very nascent. Yet, Garg decided to give it a shot and started a venture called Lootspot and sold cameras and mobiles on a group discount site.
This experience was not only enlightening but also revealed the high level of competition and low margins in this industry. Not aware of how venture funding worked or even of the existence of such a concept, Garg had to make do with his limited resources. He surveyed the market looking for products that would give him high margins and discovered that while top end items were easily available, accessories were not. He also noticed that the top end items brought in 65 per cent of revenues, but 65 per cent of profits came from the accessories. Also, accessories fulfilled the five criteria he was looking for in a business: high margins, low competition, low-ticket size, low courier charges, and low possibilities of damage to the goods.
In June 2011, Lootspot became the first site to exclusively focus on accessories for smart phones and laptops. The company tied up with offline suppliers and promoted their offerings through social media. The success of this portal gave Garg confidence, especially as investors started approaching him.
In 2012, Mumbai-based Seedfund invested in the company. “We changed the name of the company to DailyObjects as we dealt with objects that one used every day. Also, Lootspot had been more appropriate when we were dealing in camera, mobile and discounts,” explains Garg.
He says that there were 18 million new smartphones purchased in India in the first half of 2014, a year-over-year growth of 84 per cent. Studies conducted by New York based NPD show that over 75 per cent of smartphone users buy and use cases on their phones. Research firm IDC estimates that the market for smartphone cases will be worth over Rs. 100 billion by 2018; the potential, thus, is huge.
An analysis of the revenue pattern also revealed that 70-80 per cent of the revenues came from smart phone cases, though the site dealt with all sorts of accessories. Instead of having to handle so many SKUs, and since the smartphone market was also picking up, the company decided to become an exclusive distributor of mobile cases. “No one else was focusing on mobile cases exclusively, leaving the field wide open for DailyObjects to create a brand,” he explains. Also, by creating their own brand, the company would be less dependent on the vagaries of the brands for other products that they dealt with.
In its original avatar, DailyObjects used to partner with brands like Capdase and Griffin and sell those brands but soon realized that it made sense to build its own brand that would compete with the likes of Chumbak and Happily Unmarried, but with a differentiated design sense.
To create branded cases, DailyObjects decided to introduce a value addition and signed up with designers to offer exclusive mobile case designs. “I signed up designers to give exclusive design options for the cases,” explains Garg. The designers liked the idea, but were initially hesitant about the pricing. But Garg convinced them that volumes will justify the effort, and his prediction bore fruit, going by the numbers. Today, DailyObjects lists nearly 42 designers on its site and customers can choose a designer of their choice for their orders. It uses polycarbonate material and special ink, for longevity and quality of the cases.
In 2014, the company grew handsomely and in January 2015, it had sold over 18,000 designer cases and over 8,000 custom cases, clocking Rs 1.4 crore in monthly revenue.
Today, its team has expanded from five to 42 and DailyObjects delivers to over 12000 pin codes across India, using premium courier partners. For areas that are not covered by private logistics companies, the company uses EMS Speedpost. If a customer is not happy with his/her order for any reason at all, the company ships it back at its cost and gives the customer a full refund. Currently, the company has 105 models offered on its website. The cases come with one-year manufacturing and replacement warranty.
Leading stores have approached DailyObjects to showcase its cases in their stores – an option that the company is considering. Going back to market research data, Garg says that market studies reveal India is currently the second largest smartphone market in the world and the domestic market for smartphone cases is slated to grow to over 82 million units in 2018, with a CAGR of 53 per cent. DailyObjects aims to capture the top end of this market with premium priced products and aims to achieve a turnover of Rs 150 crore by 2017-18.
Having broken even, now DailyObjects is ready to expand. It is looking to raise funds for improving its technology, team and infrastructure. It is also planning to introduce cases for mobiles in other materials such as leather and wood. Leather sleeves for laptops are also on the chart. While it plans to strengthen its presence in the Indian market, it has also started preliminary work in the Gulf countries to make a foray there.
In essence, Garg has certainly identified a gap in the market, that of becoming a niche e-commerce player, in a segment that is sizable in itself. The market opportunity is certainly there; Garg knows it is up to him to execute well and capitalize on the same.
Focus: Designer and customised cases for smartphones
Started in: 2011
Funded: SeedfundDailyObjects e-commerce Seedfund