SUMMARY
After starting out as a service to help brands launch online stores, Pune-based Shoptimize added a growth-oriented analytics platform leveraging data from multiple online sources
With a mix of traditional and online-first D2C brands, Shoptimize claims to be generating revenue of INR 4 Cr - INR 5 Cr quarter-on-quarter
While there is plenty of competition in the D2C space for SaaS companies, Shoptimize counts its AI-driven growth engine as a key differentiator
As the direct-to-consumer (D2C) market explodes to unlimited possibilities, the prime focus for brands has changed from online marketplaces such as Amazon and Flipkart to native D2C channels. Thanks to a plethora of ecommerce website enablers like Shopify, Magento, Shoptimize, Shopnix, GoDaddy, BigCommerce, Volusion, WooCommerce, Hankly, Wix, Weebly among others, even setting up D2C websites and app is a cinch. This means even small retailers, sellers and manufacturers are able to leverage the D2C boom without needing coding or web designing skills or even needing to hire.
While these companies have simplified the experience for brands setting up online shops, there still exists a massive gap in terms of business outcomes. That’s the key focus for Pune-based Shoptimize, which is differentiating itself from the competition with its analytics-centric SaaS platform.
Beyond helping brands set up stores, the company’s in-house machine learning and analytics tool help the smallest of businesses identify potential growth avenues, see which products are gaining traction and get real-time data insights.
“We are not just a store front building technology company, we are actually an ecommerce growth enablers,” said cofounder and CEO Mangesh Panditrao.
Founded in 2012 by Panditrao and Vivek Phalak, the company started out with the idea of helping brands sell directly to end customers, similar to Shopify. The initial focus was on building websites for brands, but this seemed like a hollow promise by itself and there were plenty of competitors. So it doubled down on a growth-oriented platform to go with ecommerce enablement.
Backed by investors such as Tandem Capital, LetsVenture, Saha Fund, and Twin Ventures among other angel investors, the company has raised an undisclosed amount in funding. While its ecommerce SaaS platform which is similar to Shopify and the likes — it comes with an integrated payment gateway, shipping partners, API frameworks for other business software, the growth platform is modelled around data analytics.
Shoptimize’s growth platform is said to bring in data from the online store customer analytics as well as several other sources including Google Ads, Facebook Ads and logistics partners. Panditrao claimed this provides a 360-degree view of the performance. This data is also used to generate insights that help D2C brands focus on risks and opportunities for their business. These include one-click implementations of recommendations through marketing automation.
With a proprietary artificial intelligence (AI) engine Aarya and real-time data analytics dashboard Polaris, the company claims to have helped brands reduce customer acquisition costs by 50% and further improve conversion ratios by over 200%.
What Sets Shoptimize Apart From Shopify & Co?
According to the cofounder, Shoptimize offers a one-stop ecommerce platform for D2C brands — setting up online stores, analytics and actionable insights. He claims this results in higher lifetime values for customers, which is a direct outcome, whereas Shopify and the likes are not outcome-centric. The company is taking on the likes of Shopify, Wix.com, Woocommerce, SquareSpace and others with its focus on enabling businesses to take their first steps into the D2C world.
“One of our key differentiators is the advanced AI-driven ecommerce growth engine. The platform harnesses data from the online store and all the other business systems that it is integrated with, and uses advanced analytics capabilities and proprietary tools to provide actionable insights and opportunities for growth,” explained Panditrao.
This offers recommendations on various aspects like dynamic messaging, product recommendations, discounts to offer and buyer-specific personalisation, he added. In addition to this, he believes Shoptimize has a bigger role to play in the entire journey and ownership of the online store, since it offers custom development as per project requirements. Shopify, on the other hand, is largely a do-it-yourself (DIY) model even though there are resources on the web for after-market support besides Shopify’s native customer support.
“Unlike other competitors in the market, we follow a partnership model for the D2C channel and make money only when the brand grows,” claimed the founder.
The Ever-Evolving D2C Landscape
With D2C brands mushrooming in the space, ecommerce in India has become the fastest growing destination for commercial transactions. According to IBEF, India’s ecommerce market is expected to grow to $200 Bn by 2026 from $48.5 Bn as of 2018. The growth is said to be fueled by increasing internet and smartphone penetration across the country, along with a consumers’ behavioural shift towards online shopping amid the pandemic.
Industry experts believe that the overall size of ecommerce is somewhere around $90 Bn, and out of which, $30 Bn comes directly from D2C brands websites. Typically, for any given D2C brand, 90-95% of the sales primarily used to come from ecommerce marketplace, and the remaining 5-10% from the brand’s website. “Each of the brands that we work with today gets at least a third of their revenue online, from their own website.” the startup’s cofounder added.
He gave the example of an offline-first consumer electronics retail brand which owns 25% market share. Shoptimize claims to have helped the business earn 400% higher revenue, 39X growth in transaction volume month-on-month along with a 40% increase in organic traffic during the Covid lockdown.
Similarly, another fashion silver jewellery manufacturer based in Mumbai and Pune is said to have used Shoptimize to see 611% revenue growth in three years with 4X growth in new users, 6X higher returns from ad campaigns as well as 517% YoY transaction growth. The names of the companies could not be revealed due to confidentiality issues.
Panditrao added that on average its clients have witnessed 200% revenue growth in six to twelve months. Shoptimize’s SaaS-based subscription platform price ranges from anywhere between INR 50K to INR 10 Lakh per month, and depends on the volume of sales and traffic managed. Plus, the company also generates revenue from online sales, where it charges a commission of 2%-3% for smaller ticket size businesses, and 30% for high-end fashion, FMCG and luxury products, per transaction.
The startup’s clients include traditional brands such as Whirlpool, Schneider Electricals, Luminous, Cafe Coffee Day, Haldiram’s and several other digital first startups such as Aadyaa, Solethreads, Phab and Iba Cosmetics among others. Overall, the company claims Shoptimize has witnessed over 30 Mn shoppers and powered 10 Mn transactions.
Headquartered in Pune, the company claimed to be earning a gross margin value (GMV) of INR 30 Cr ($4 Mn) per month, generating revenue of INR 4-5 Cr QoQ. “We are currently breaking even, and in the coming months, we are looking to invest heavily in expanding our business in India and Southeast Asia region.”
Updated November 23, 2020 | 16:00: Previously, the article erroneously mentioned the funding amount raised by Shoptimize. It has now been changed to reflect ‘undisclosed amount,’ due to confidentiality issues.
