Headed by a veteran with over two decades of experience in retail, Bengaluru-based online hypermarket, Urdoorstep.com, says that every single transaction on its platform is delivering a profit from the day one of its operation.
With mere four months in operation, the company claims to be the first online startup in India to reach 1500 orders/day with just 20 per cent of the city pin codes being covered. The company is confident of crossing this mark in coming months, and asserts this will happen without burning cash on deep discounting.
“The entire value/supply chain — from sourcing (of products directly from farmers, millers, etc), to procurement, assortment, packaging, logistics and delivery — is completely managed by us,” says founder Dinesh Malpani, who, after years of experience in retail (including at V2, Mahindra Retail and Jubiliant Foodworks’ hypermarket format Total) , launched Urdoorstep in October 2015.
“This has helped us in bringing our unit economics or expenses under control and allow us to market the products at the lowest price. We are the cheapest hypermarket in all of South India today, and 75 per cent of our orders come from repeat customers,” he notes, adding that his vast experience and knowledge in offline retail has a great role to play in building this business.
“Additionally, our month on month growth has been over 60%. This can be much larger; essentials make up the largest consumed category. We have consciously planned to operate in a cluster of pin codes and have capped our daily order numbers so that we can ensure close to 98 per cent on-time deliveries,” Malpani says.
Urdoorstep is working on an inventory-based business model by focusing equally on all the three large business categories — food and grocery, home and lifestyle products. It currently caters to 23 pin codes in Bengaluru and claims to not be threatened by the vast geographical reach of other established players in these categories.
“Out of the total USD500 billion retail market in India, 80% of the consumer spending is in categories such as food, grocery and other essentials, while only 20% goes to apparel, mobile and consumer durables. Where e-tailers such as Flipkart, Amazon, among others, have taken off with this 20%, we have put our expertise and focus on the other 80%, which is repetitive, non-value add, but one still has to do it,” Malpani explains.
“Besides, grocery is the ‘mother of all categories’ in terms of size, repetitive need and addresses one of the biggest pain points from a consumer’s viewpoint. This is not the typical ‘one more category’ within a horizontal e-commerce portal; it is a very different business and an extremely tough vertical that needs specialised industry experience. We believe that we can do more revenues from a single city than most of the marketplace grocery models across 17-18 cities,” he added.
Urdoorstep had managed to raise USD4 million from Jupiter Capital even before launching the venture. “I have learnt that the right investors make a huge difference in any business. We raised funds in May 2015 and went live in October after putting up a 35,000 square feet state-of-the-art fulfillment center because Jupiter understood why I want to build this business,” Malpani states.
Urdoorstep is currently preparing for a next round of funding this year, but says its too early to disclose details.
Elaborating on expansion plans for this year, Malpani says, “We plan to optimise Bengaluru operations in the next 3-6 months and evaluate next cities after that. More than geographical expansion, our fundamental target is to make every transaction profitable.”
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