While everyone is overwhelmed by the discounts and offers given by e-commerce platforms, there is a growing concern among people in the industry that this price competitiveness is coming due to venture capital (VC) money which might be used to offer unimaginable discounts on the purchase price. It leads to the question whether or not offering such low cost prices is a sustainable business model.
In Suresh Kabra’s opinion, Founder of Delhi-based PriceMap, wholesalers and retailers have adopted the marketplace model wherein they are the actual sellers. In reality, the merchandise stays under the individual seller’s name, until the transaction is completed; while the marketplace provides support in terms of warehouse, delivery and payment collection. Kabra believes that in the long run physical retailers will be able to offer more competitive pricing than marketplaces or other small e-commerce players, who ideally after a certain point of time, will start charging a premium.
Banking firmly on this belief, Kabra founded PriceMap with co-founders Shishir Dubey and Basabjit Dey in April, 2015. In a bid to offer digital presence to offline retailers, PriceMap connects store owners to potential shoppers who are actively searching for products online with a clear intent to buy.
Kabra’s aim is simple. “While everyone is converting to e-commerce, we’re here to convert an ecommerce shopper into an offline shopper. We’re targeting to complete the bricks to clicks, and back to bricks cycle.”
How It Works
Today, 90% of transactions made in India are done offline. However, a recent study conducted by Ipsos MediaCT and Sterling Brands along with Google revealed some interesting facts. It says that two in three shoppers who tried to find information within a store didn’t find what they needed and 43% of them left frustrated. And 71% of in-store shoppers who use smartphones for online research say their device has become more important than their in-store experience.
This is where PriceMap comes in. With a team of 10 people, the company helps physical retailers reach out to customers from the comfort of their own shop. On the buyer’s front, it gives the opportunity to search for an item/ product one wishes to buy on their phones, and share it via the PriceMap app to receive the best possible quotes from known market areas in their locality. Kabra fondly recalls one incident, where one buyer from Noida had requested for a particular mobile phone from Atta Market via the app and received responses from 13 different sellers all of whom were offering the product at the same price as any online retailer!
With the PriceMap app, a buyer has the perks of setting the time to buy and choose either a suitable pick-up & delivery timing or a walk-in store experience. The app also gives them the liberty to choose and buy from their preferred market areas. A lot of buyers have ‘store loyalty’ and this enables them to purchase their desired product from their favourite store. In short, they’re creating their own personal ‘bazaar’.
As a seller, it automatically gives them a digital presence simply by downloading and installing the app on their mobile. There is no need to upload inventory details or product images. The seller can discover a potential buyer and offer them the best deal in real time. Thus, it enables them to pull e-shoppers back to the stores.
Currently, PriceMap operates out of Delhi and supports merchandise in three categories -shoes, watches, and mobile phones. Kabra says, “All three categories are popular in their own way and we’ve seen a growing rate of traction in all of them”. However, he was quick to add that the company is planning to expand to 15 categories soon. PriceMap is currently available on Android. The iOS version is scheduled to launch soon.
Monetisation And Traction
The startup currently has over 500 retailers listed on its platform from Delhi. On the buyer’s front, it has noticed a steady growth as the app adds about 500 customers a day. Kabra is optimistic about growth and says, “Vendors are quick to install the app as it was designed keeping in mind those who might not be comfortable with technology. Whatever traction we’ve gained so far has been through word-of-mouth and this, in particular, has been very encouraging”.
On the revenue front, the company is now exploring different angles. While there is no fee charged for each real time transaction, the startup is now opening up to the possibility of revenue coming in through advertising.
Kabra admits that the biggest challenges the company faces are from e-retailers. Not only do the ecommerce platforms boast of a grandiose inventory but their competitive pricing is enough to make any shopper’s head turn. However, the startup is hopeful that for a niche set of customers, the ‘touch and feel’ factor of physical shopping remains an unavoidable need and coupled with promise of an attractive in-store experience, they’ll return to the physical space for retail therapy.
Kabra wants to make PriceMap an essential part of a user’s shopping experience. The startup plans to expand to 90 cities in India in the next five years. India currently has about 12 Mn retailers out of which 50% belong to the food & groceries sector. PriceMap aims to bring the rest under their application.
Although, a novel approach, PriceMap faces tough competition from e-retailers. With competitive pricing, 24/7 availability and the promise of delivery within 24 hours, online retailers have a clear advantage over their offline counterparts. However, the in-store experience is still valuable to many customers. Add to that, many offline retailers are already offering competitive pricing. It will be interesting to watch how PriceMap builds on the advantages of offline retailing and delivers on its promise of a worthwhile experience for real time transaction.