2015 was year of survival in hyperlocal space: Panellists at Techcircle India Ecommerce Summit
The fun has just begun for the startups in the hyperlocal and on-demand services space as the focus has turned towards unit economics and profitability, and the investors have started asking tough questions, said panellists at the 8th session of the Techcircle India Ecommerce Summit 2016 on Wednesday.
The panellists in hindsight examined the lessons learned in the hyperlocal and on-demand services space and described 2015 as the year of survival for these startups.
The panellists included some of the stalwarts of the home services and on-demand space and the panel was moderated by Rahul Khanna, managing partner, Trifecta Capital. The panellists included Abhiraj Bhal, co-founder of UrbanClap; Kiran Murthi, CEO of AskmeBazaar.com; Gajinder Singh, CEO of Paymango; Navneet Singh, founder and CEO of PepperTap and Saran Chatterjee, CEO of Housejoy.
"Year 2015 taught us to focus on customer experience and not to get diverted with the money raised," said Saran Chatterjee, CEO of Housejoy.
Sharing the biggest lesson for PepperTap, Navneet Singh, founder and CEO, said firms can acquire customers only through word of mouth and not by going after them.
Looking back at the journey of Urban Clap, Abhiraj Bhal, co-founder, shared that it has been a marathon run for the company and that the actual journey has just begun.
Panellists said as consolidation in the home services subsides, the challenge would shift to going deeper into particular categories to enhance the customer experience. Talking about the acquisition of laundry startup My Wash, Saran Chatterjee, founder of Housejoy, said that it is an attempt of getting closer to households. "Apart from adding another vertical to our portfolio, the acquisition was more about being relevant to the households for their everyday use," he said.
However, he agreed that unit economics are a challenge in the laundry space.
Concurring that customer acquisition is not easy on the pocket, panellists said there is enough space for three-five big players in the hyperlocal services space. "Given that hyperlocal services space is the mother of all categories, in the end, it will boil down to who provides better services, how different players will take the merchants online and how they improve the customer's experience," said Singh of PepperTap. Panellists introspected on the challenges and complexities faced by the offline merchants in the hyperlocal space. Kiran Murthi, CEO, AskmeBazaar.com, said merchants want to grow digitally but are struggling with marketing, finance, and how to enhance distribution. "This is the void we realised and are surprised how the market has opened," he said.
While discussing the playbook for 2016, Singh of PepperTap shared that the firm will focus on "attracting and retaining customers as well as managing margins.
"The top level story line for Housejoy would be having a lot of happy customers. The case in point for us would be predictability of arrival time followed by improving the quality at which our professionals complete the job," said Chatterjee and added that home service is the category where one doesn't compete on price.
In response to a question by one of the participants on the fate of local stores after the inception of online grocery stores, Singh of PepperTap said corner stores would instead evolve with the new paradigm using technology to compete with online players.