Pikkol was set up with an aim of bringing transparency and quality assurance in the relocation services industry. With an estimated 6,000 relocations a month, the startup aims to touch Rs. 5 crore in revenues in FY16.
When you closely look at the founding team of Pikkol, or for that matter dig deeper into the profile of its core team, you’ll notice a handful of second-time entrepreneurs flashing top roles (in Pikkol) on their LinkedIn headlines. Was that a deliberate move? I ask Deepu Chandran, one of the co-founders and a second-time entrepreneur himself. “Not really. Initially, we hired only employees who came through referrals and that comprises 80 per cent of our employee base. But going forward, we will be seeking more external references,” he notes casually.
The founder of the technology-enabled relocation services startup, Chandran clearly admits that after selling Innomantra, an intellectual property consulting and services firm, he was toying with two business ideas. One was in the logistics segment and the second was in the home services segment. “After conducting pilots in both, we realised that the former was more lucrative because, although there are established players in the market, customers still can’t point to a brand which stands for transparency and accountability,” he opines. Launched less than a year ago, in April 2015, along with three other co-founders, Jayaram.K, Siby Mathew and Suraj Valimbe, the startup is already being compared with the frontrunners in the industry, such as Agarwal Packers & Movers.
Identifying a Customer Pain Point
Chandran believes that one of the biggest pain points for customers (with respect to the relocation services business) today is the inability to judge the quality of services being delivered to them. In other words, when a customer visits a lead generating platform, the representative gathers details from them and puts them in touch with vendors. The vendors, in turn, approach the customers with a quotation, and since there is no transparency or quality assurance in the process, they go with the person who quotes the lowest. “Can we deliver a greater advantage to the customer? Can we make some changes in how the market operates?” These were some questions the founding team was dealing with.
To set the context better, Chandran narrates an anecdote about George Akerlof, an American economist who released a paper titled, ‘The Market for Lemons – Quality Uncertainty and the Market Mechanism.’ “His paper analysed the used car market in the U.S, and the study brought out an inference that there is no way a customer can convey the quality of a used car. In such a circumstance, they tend to evaluate a product only based on price,” he explains. Now, compare this to the relocation services market in India. When customers go with a vendor who quotes the lowest, they think about maximising their returns at the lowest price. In turn, the vendors accept their order and maximise their benefits by cutting corners on the quality of services delivered to them. “Did you know that just by reducing the thickness of a carton (which can damage goods) or removing a few layers from it can save a vendor up to Rs. 6,000? This is the kind of quality we are talking about,” cites Chandran.
Developing a Sound Model
Attempt one was a marketplace model where customers could see a list of different vendors, their ratings and quality deliverables, before finalising on one. But, soon, the founders realised that their model wasn’t adding much value to the customer. Then, they switched to an aggregator model, where they started taking responsibility of the customer relocation process, and began working with vendors who were trained by them. “We realised that merely passing on leads and quotes is not going to create a great impact. Rather, what would make a difference, is streamlining the process from the word go,” he adds.
Today, Pikkol banks on its adaptive algorithm and technology software to understand what the customer’s requirements are and recommend tailor-made relocation packages based on their need. “Whether they are moving inter-city or intra-city, we ensure the customer knows what quality they are getting and what services they will be availing with each package they choose. This is our way of bringing transparency into the business,” he explains. As far as pricing goes, Chandran indicates that it is at the same level or marginally higher than market estimates.
Whether they are moving inter-city or intra-city, we ensure the customer knows what quality they are getting and what services they will be availing with each package they choose. This is our way of bringing transparency into the business.
Bootstrapped and well on its way to raise an external round in the near future, Pikkol currently, through its partner network, has 1,200 movers (trucks) on its platform and completes 6,000 relocations a month across Bengaluru, Mumbai, NCR, Pune, Hyderabad and Chennai. Realizing that relocations are more common in Metros than tier-2 cities, Pikkol is now looking to manage international relocations. “We partner with companies which can cover the last leg for customers moving from India to U.S., U.K., Australia, Middle East or more. We offer similar services for customers moving into the country,” he notes.
An interesting feature about Pikkol is its second line of partnerships with companies such as Zoomcar and Croma. “Typically, a relocation means customers move to a bigger house. This means, they might want to buy new furniture or a new television set. We tell them, we have a partnership with such a brand. Why don’t you check that?” he cites. Similarly, when customers relocate to a new house, since their routine goes for a toss, partnerships with companies such as Zoomcar means the customers can rent a car till such a time that their everyday affairs are back in place.
The not-so-rosy side
Of course, such growth does come with its fair share of challenges. Among those that the founders had to tackle are, convincing the customer who is used to a fragmented market that there is an opportunity to get quality assurance, enabling its partners and vendor networks to adopt the technology it developed to bring transparency into the system, and to convince its vendors to fall in line with Pikkol’s service standards. “While convincing vendors was initially a challenge, once they saw the kind of respect they get from customers, it improved their morale and they understood why they had to follow a certain protocol,” indicates Chandran. With respect to customers, Pikkol hasn’t invested heavily in marketing and even now relies on referrals and word of mouth.
“People say that Indians are price sensitive. But I believe, if the quality delivered is up to their standards, they will be more than willing to pay higher than what they had estimated for a service,” opines Chandran. With a capacity to handle 15,000 relocations a month, Pikkol is expected to close Rs. 5 crore in revenues in the current financial year. What is left to see is whether the startup will be able to sustain its niche and compete with the biggies, as it further expands.
Founders: Deepu Chandran, Jayaram.K, Siby Mathew and Suraj Valimbe
Year: April 2015
Concept: A technology-enabled relocation services aggregator
Impact: 1,200 vendors on board who handle 6,000 relocations a month across Bengaluru, Mumbai, NCR, Pune, Hyderabad and Chennai