E-com entrant Kobster targets office supplies; how different is it?

24 Sep, 2012

Unlike the west, where there are a number of established brands (like Staples, OfficeMax and Office Depot, etc.) that act as one-stop portals for office supplies, the Indian office supplies market is still very unorganised. Vineet Neeraj, Karthik R and Mohan G saw an opportunity in this space and launched, an e-commerce site that sells office supplies.

"The size of the office products market in India is around $14.02 billion and it is growing at approximately 15-20 per cent per year. And considering the fact that it is still mostly unorganised (and no one had cracked it as of now), we saw a big opportunity in the space," said Neeraj.

Prior to founding Kobster, Neeraj has worked with companies like Cognizant and Arrayshield, while Karthik and Mohan were working at Cognizant and HCL respectively. The three of them were batch mates and have completed their B.Tech from SRM University, Chennai. The Chennai-based company, started in July 2012, targets small and medium enterprises (SMEs), home offices, startups as well as individual customers.

The site went live on the September 5 and has already done transactions worth Rs 60,000 at an average of 3-4 orders per day. The site offers products in a number of categories that include office stationery, office electronics, cleaning, food & breakroom and facilities among others. As of now, it has over 1,200 products. The prices range from Rs 10 (for a pen) to Rs 35,000 (for printers, laptops, vending machines, etc.) and the company has already tied up with 25 brands (like Canon, Xerox, HP, Renault, Cello, OfficeMate and Maped, etc.) for them.

It follows the back-to-back order model that basically means that whenever it receives an order for a particular product, it procures the same from a distributor. Apart from that, the company also warehouses (the office doubles up as a warehouse) the most frequent selling products. The minimum order value is Rs 500, below which the customer has to pay additional delivery charges of Rs 50. The deliveries are handled by Aramex and DTDC.

Marketing and expansion plans

The startup is already using social media and Google ads as a mode of online marketing and it also plans to ramp up its offline marketing efforts. While the online marketing is focused towards end-consumers, offline marketing will primarily be for connecting with and getting orders from corporates.

It wants to expand into school supplies in the coming months, and follow that by adding healthcare accessories to the mix. "We are also going to come up with our own version of e-procurement software that will be tightly integrated with our e-commerce portal. This will enable the procurement department (of a corporate) to easily order the product and also keep track of their office supplies spending. It will also help to get rid of middlemen between the buyers and the sellers," said Neeraj.

The company faces competition from a number of players (mostly startups) that include 1Click1Call, Yesgrid and iThinkStore. Additionally, Staples has also been around for a while, but sans an online presence.

So what differentiates Kobster from the others? According to Neeraj, the USP is the competitive prices the company is offering, "Our products are even cheaper than some of the big players of the market. Also, since there are no established online brands as of now, there is a lot of scope of growth." And being a startup themselves, the company plans to offer special discounted packages to startups for all their office needs.

(Edited by Prem Udayabhanu)