In 2015, Narasimha Rao ML and Sravan Kumar T founders of Jigydi decided to quit their jobs as software engineers, spanning 15 years and carve a niche for themselves in the home services market. The timing was right with many such services popping up in the Indian market.
An understanding of the sector where traditional service delivery by technicians was far from the customer expectations is what led the duo to focus on hyperlocal home services at affordable prices to customers in Hyderabad.
Traditionally, the home services segment has been highly fragmented and disorganised, leaving customers frustrated at delays and low-quality services. With no agency responsible for fixing prices, no quality check for technicians and no mechanism to address customer complaints in a timely manner, customers have no choice in this space, but to pay exorbitant prices. The on-demand services marketplaces solve this by organising the market, and their success is evident from the way customers have latched on to them.
These platforms offer a simplified user experience on a mobile or desktop, and easy access to service providers in desirable turnaround time has propelled the growth of such startups. Even for service providers, platforms such as Jigydi ensure consistent work at fair prices without middle-men or contractors taking a major portion of actual technicians income.
Jigydi competes in a market which is already dominated by hyper funded players such as UrbanClap, Quikr and Housejoy.
“This is a huge market. No one owns this market till now. Some players are getting control of bits and pieces. Strong players will grow slowly. Who gets control of all services collectively will win the battle. We believe customer acceptance makes us stay ahead of the competition,” said Rao.
Of course, as with most other sectors, customer behaviour has changed for online services. The one big change the Jigydi founders witnessed is in the number of people who are now comfortable with on-demand services, such as for food, entertainment and shopping. On the trust side, the fact that Jigydi has several layers of security to ensure safety at the customer’s premise and ensuring high customer satisfaction has gone a long way in ensuring customer stickiness for the company.
On-Demand Models Take Over Startups
Jigydi operates in a cluster model. It has eight clusters to manage operations across Hyderabad. They marry this knowledge with their backend analytics and create services aimed at high customer satisfaction, strong operating procedures and smooth execution. On an average, it witnesses 5,000 orders a month for a wide range of in-home services some of which are electrical work, carpentry, cleaning, pest control and all other home repairs, maintenance and renovation work. Among these bathroom cleaning, pest control and plumbing are the most in-demand services.
“We faced major challenges in managing a cluster remotely. We developed certain procedures to overcome this problem. Now we are successfully able to manage and drive all clusters from a central location, expanding our services across Hyderabad was our major milestone and we have recently achieved it,” Rao added.
To reach its target audience in the city, Jigydi relied heavily on the power of social media.
Each order in classified as a small or a big order depending on the nature of the job and cost. The small orders typically range below INR 5000, whereas a big order ranges above INR 5000. Small orders are where customers want immediate service and technicians are assigned to these orders for an immediate attempt at completion. Big orders, on the other hand, are taken care of by managers and supervisors. Supervisors visit customer locations along with technicians and deliver an estimate based on the standard prices designed by Jigydi. The complete execution cycle thus is monitored and owned by the supervisors for big orders, which facilitates smooth managing and on-time completion of bigger orders.
Jigydi counts its supervisors as a competitive edge. Customers have the option to reach out to these designated supervisors for any concerns, unlike a customer care number. This ensures quick redressal of the problems and speedy completion of tasks.
With over 340 trained on-boarded technicians, Jigydi works on a commission model with a take ranging from 20% to 30%. It claims to have a 50% repeat customer rate and is witnessing a year-on-year growth rate of 90%.
“We spent a good amount of time on understanding what constitutes to customer satisfaction. For this, we chose a small area in Hyderabad and validated all our ideas on this small working model. Once we identified a successful operational execution cycle, we started replicating it across Hyderabad, and here we are now, successfully generating good revenues of INR 4.30 Cr as turnover for FY 2019 and now targeting INR 50 Cr turnover for FY 2020,” explained Sravan.
The Opportunity In Hyperlocal Marketplaces
While the long-term goal for Jigydi is to expand services to other cities in India, in the near future, it is looking to enter the beauty and laundry segments and expand to Bengaluru, India’s biggest startup hub. Success here will depend on how well Jigydi contends with the existing players and their scaled-up models. The challenge is not small considering that UrbanClap has had a pretty firm grip in most Tier 1 cities, including Bengaluru.
The founders estimated that the hyperlocal services market would cross INR 6K Cr by 2020 based on the current trends and average ticket size of Jigydi and other players in this sace. One look at the funding in this sector is enough to showcase the opportunity for players in the segment.
While the hyperlocal bubble burst in 2016 and saw the survival of the fittest, the segment has since gained stability and definitely has a positive story to tell for the future. Notably, UrbanClap has been brought on board as a government skilling partner, which gives it leverage in terms of market reach and service providers. The company got $75 M funding led by Tiger Global recently. Similarly, Amazon-backed Housejoy, raised $3.24 Mn (INR 23 Cr) in a bridge funding round led by Matrix Partners India.
The rising investor interest in the hyperlocal services segment clearly establishes the growth potential and the market opportunity for this segment. The core focus areas for Jigydi bode well for the startup’s growth plans. The challenges around customer service and turnaround time are key hurdles in the growth trajectory of hyperlocal services platforms no matter the stage and presence.