Mudraka Claims To Be Growing At A Rate Of 100% Q-o-Q And Looks At Consolidating Its first Mover Advantage
Ecommerce in India is like the Midas Touch. It turns everything it touches into gold, and it touches everything. The Indian ecommerce industry, which is poised to touch $73 Bn by 2022, has gone from selling books and music CDs just over 10 years ago to selling apparel, lifestyle products, electronics, food and more. It is now transforming the service sector with the likes of logistics, hyperlocal, and even advertising.
Thanks to the ecommerce boost and given the increase in advertising spend, one of the most fragmented segments in advertising — OOH (outdoor or out-of-home media advertising) — is now growing at a much faster pace. OOH is expected to grow 9.7% in 2018, pulling in revenues worth $556 Mn (INR 3,743 Cr) by the end of December. The total advertising market in India is expected to be worth $1 Tn by 2022.
To make a mark in this niche category, Gayatri Kapur and Nikhil Pawa joined the OOH bandwagon in 2016 with their venture Mudraka. Based out of Delhi, the bootstrapped startup offers outdoor print advertising products, promotional materials, and custom signages to businesses. It counts brands like Google, Zoomcar, Muthoot, 1mg, Apollo Tyres, and Modi Pharma as well as FICCI among its clients. The founders aim to resolve some of the issues such as opaque pricing, and non-standardised products in this so far unorganised industry.
So, What Is Mudraka?
Mudraka, which means “printer” in Sanskrit, was initially started as a marketplace for outdoor advertising, display and signage products with vendors across India. However, in order to address issues concerning quality control, consistency, service levels, packaging, etc, the founders had to internalise a number of processes. They then shifted from the marketplace model to the inventory model.
Mudraka had started as a platform for SMEs, and now has two very distinct markets that it caters to — the online segment for small businesses and a bulk order segment for large corporates. These products are used by businesses in outdoor campaigns, activations, exhibitions, events, POP/ in-store displays, and others.
With absolutely zero spend on branding, the company has been scaling impressively year-on-year and has clocked in a 7x revenue in FY18 as compared to the previous financial year. With a target revenue of $7.5 Mn (INR 50 Cr), Mudraka aims to grow its partner base besides generating ten times more indirect employment in the next three years.
“Today, we work with an extensive partner network who depend on our value chain. We want to grow this number organically. This extensive partner network is managed by a core team of eight people,” emphasised Gayatri.
Mudraka: Making Its Way The Bootstrapped Way
The founders were particularly keen on doing something digital as they had been observing the ongoing internet revolution in the country, which is changing the way people conduct businesses or consume services, trends which were also fueling huge valuations and funding. However, one thing they were determined about was not to make their way on the heels of VC money.
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There were two reasons behind this decision. Firstly, they didn’t want to get quick funding, spend funds recklessly, let the promoters make money, and then get out of the game. The ultimate vision was to build a business that worked for everyone by being self-sustainable and profitable, and one that empowered its partners.
Secondly, the founders deeply cared about building a business that would provide enduring value to the society via sustainable jobs. “Take, for example, the case of the erstwhile second-largest ecommerce company in the country, which was heavily funded and then went kaput. There is no point in building ventures with the objective of being acquired or funded,” said Gayatri.
How Overcoming Challenges Helped Mudraka To Scale In The OOH Sector
“The Indian market is not at all homogenous in its behaviour, and hence we cannot apply a successful business model from any other part of the world. In my view, India comprises many countries, each with unique requirements and expectations. Since our firm is focused on customer satisfaction, how to keep up to this standard, while customising every order, from design to delivery, given time constraints are some of the challenges we grapple with daily” said Nikhil.
While some of the challenges such as attaining a product-market fit were overcome with extensive research and finding existing loopholes in the industry, others were solved with experimentation and experience.
Overcoming Challenges Along The Way
- Installation Support: With customers fragmented across the country, providing installation support was not feasible. Therefore they Built a product portfolio around portable display items which don’t require installation support, thus saving costs and promoting DIY (Do It Yourself) at once.
- Time to delivery: Since a large percentage of customers are on strict timelines due to an event or a launch, Mudraka has optimised its inventory and processes to ensure the quickest possible delivery.
- Better packaging: With constant improvements in packaging, they’ve been able to ensure their fragile and heavy products reach the customers in perfect condition.
However, despite working around many of these challenges, the Mudraka team still has to contend with problems that are inherent in the industry and tough to overcome.
For instance, the ecommerce industry is still Cash On Delivery (COD) sensitive, while Mudraka demands the price upfront as it offers a customised product. Similarly, returns are also not accepted and new products are delivered only in case of damage during delivery or faulty products being sent.
Competition And The Plans Ahead
Mudraka is not the only company in this domain. Amid existing players such as CircleOne and Mega Biz Merchandise, Mudraka is betting on its ability to collect and analyse data to differentiate itself.
“Data is in our DNA. By employing A/B testing, UX improvements and smarter product selections, we’ve seen our conversion rate increase by three times in the last year. From a profitability perspective, we look at the cost of selling, distribution, customer satisfaction, etc for every product and SKU – and juggle with our portfolio in a manner that makes sense for the business. We also use data to forecast demand and secure supply,’’ Said Gayatri.
Nikhil added, “Transparent, affordable pricing, consistent quality and ease of ordering are the primary advantages over offline players. We also reach areas where there are no local offline players present.”
Further, the Mudraka founders are clear that they don’t want to introduce installation services. “We’ve tested the DIY model, which is very popular outside India, and seen it work for our products. Our most popular products are portable display items such as standees, canopies, backdrop stands, table top displays, LED boards which do not need installation support.”
They also intend to continue working in a bootstrapped manner. ‘’We want to stretch this business model to see how much we can scale it without any investments, to see its organic growth. We could look at future partnerships or investments that are strategic in nature. However, our main focus now is not to seek investments, but to build a sustainable business that is predicated on a great customer experience,” added Gayatri.
Going ahead, Mudraka is also looking to focus on increasing its product range, adding tech-enabled digital OOH solutions, reaching a larger customer base through various marketing channels and building support for local languages.
With growing competition between products and services in both the offline and online space, effective and efficient advertising seems to be the need of the hour. This need has resulted in new and innovative changes in OOH advertising media across the world.
Travel to countries like Russia and Singapore, and what strikes you is the ubiquity of outdoor digital advertising, and the lack of physical display units of the kind we find all over India.
Given how India has leapfrogged into the digital arena in the last couple of years, this change in advertising will inevitably reach India as well, with players such as Mudraka in the race. And when this change happens, if such companies are able to capture even a small percentage of the market, we are talking tens of crores.