Bangalore-based Melting Pot Concepts Pvt Ltd, the company behind the online nutritional supplement store MyNutraMart.com, opened its first physical store in its home city last month, and now plans to set up 10 more outlets across South India, including Chennai and Hyderabad, by March 2015.
The stores are created through franchisee partnership which makes the firm a hybrid online-offline retailer seeking to create a place for itself, competing against VC-backed Healthkart.
MyNutraMart was started by siblings Himmath and Arvind Jain in 2009. Himmath holds a PGDBM in Marketing and Finance from Goa Institute of Management and has earlier worked at Indiabulls, Minova Life Sciences and JM Morgan Stanley. Arvind has prior experience in nutrition & pharma manufacturing and marketing, and holds a B Pharm degree from Rajiv Gandhi University of Health Sciences.
The company works with over 200 vendors to offer a wide selection of vitamins and nutritional supplements. Currently, the site offers around 1,200 SKUs, of which over 450 are manufactured by the company itself under seven-eight brands. It also has a manufacturing plant in Bangalore for developing its own products, in addition to a separate warehouse. "We have been in the pharma business for the past 10 years and we used the founders' capital to set up the warehouse and manufacturing plant," said Himmath, adding that the firm is already profitable.
According to Himmath, the company has an online customer base of around 20,000, among whom 40 per cent are repeat customers. The site gets around 75,000 page views per month. However, a major chunk of sales comes through third-party retail platforms such as ShopClues.com, Healthkart.com, Snapdeal.com, eBay and Naptol.com.
Himmath said over the past couple of years, the firm's revenues grew over 80 per cent, mainly driven by the private label brands, adding that better pricing has helped the firm increase its operating profit margins by 10 percentage points.
The firm claims to be doing GMV (gross merchandise volume) of Rs 38 lakh per month, and is looking to grow to Rs 1.5 crore in monthly GMV by the end of next financial year (FY15), which translates into an annualised run rate of Rs 18 crore.
Himmath said MyNutraMart.com is presently shipping on an average of 80-100 consignments per day, almost 95 per cent of which are delivered on the same day. In terms of orders, Bangalore, Delhi and Mumbai remain the top three cities. While the company has its own delivery team in Bangalore, logistics for other pin codes are handled by a number of courier services like Aramex, First Flight, DTDC, Speed Post and Blue Dart.
According to the company, it has mapped its key growth areas into four strategic business units (SBUs) that include the portal MyNutraMart.com; affiliation with other players online; the offline sales of private label brands through doctors and nutritionists; and finally franchisee of retail outlets under brand MyNutraMart.com.
"Each SBU can be scaled on the back of our private label brands. We are presently working on resource allocation for these SBUs. The scope of developing offline sales through dieticians holds immense potential, which was untapped till now," said Himmath.
Bootstrapped till now, the firm is now planning to raise growth capital worth $2 million to expand its reach in the country. "We need to build sales teams in top 10 cities in order to grow the offline prescription-cum-OTC business for our various vitamins and bodybuilding brands. Some investments have to be made in brand building of private labels as well," he said.
There are not many players operating in the nutrition supplement space in India. Gurgaon-based Healthkart.com is another player in this space, which offers an online health store along with a drug search marketplace. Healthkart is also a hybrid firm and recently opened its fourth offline store in Bangalore. Last June, the firm had raised funding from Intel Capital, with participation from Sequoia Capital.
(Edited by Joby Puthuparampil Johnson)