Will this SaaS startup's 'shop while you stream' strategy be a game changer?

Will this SaaS startup's 'shop while you stream' strategy be a game changer?
From L to R: Saket Dandotia and Alok Patil set up Toch in 2016, while Vinayak Shrivastav joined later as CEO
21 Mar, 2018

Be it Kabhi Alvida Naa Kehna in 2006 or Ae Dil Hai Mushkil in 2016, director Karan Johar's films are known for their snazzy couture and invariably feature the latest in fashion. The audience is often left imagining how they would look in those clothes. And one startup has sensed an opportunity. 

Enter Toch. Their USP: Shop while you stream videos. Their product, simply put, is an artificial intelligence engine that scans any video for objects such as clothes, accessories, footwear and even locations and provides information on those elements.

“It [The AI engine] can detect emotions, actors, activities, and scenes,” said Vinayak Shrivastav, Toch's chief executive and co-founder. 

The next step: The engine tags these elements with information and scans various e-commerce portals for similar products. Users can then directly add to cart.

The offering also goes one step further to scan locations. 

“If it [the AI engine] scans a background, it tags it with information and provides you with details on tour packages so you can explore going to that place,” said Shrivastav.

Toch's inventory database consists of location descriptions and products across fashion, travel, retail and sports, among others. 

“We started out with fashion and now we have segmented out to other points where it [the AI engine] can detect and learn. The machine just needs data to be added which then auto-detects output,” he said.

Early days

Run by Vogueme Technologies Pvt. Ltd and based out of Indore and Mumbai, Toch was founded in 2016 by Saket Dandotia and Alok Patil. 

Before Toch, co-founders Dandotia and Patil ran a mobile and web solutions consulting firm called Linkites Infotech. Some of their projects revolved around artificial intelligence and image processing. They realised these technologies have applications in video, which is how Toch came about. 

In 2016, Toch secured early-stage funding from Zsolt Capital, the seed-stage venture capital fund of Mumbai-based Z Nation Lab, a startup accelerator and incubator.

Shrivastav, who was a venture strategist at Z Nation Lab, joined Toch at this juncture to oversee strategy and marketing.

All Toch's intellectual properties are built in-house with Patil at the helm. Dandotia and Patil both look after product development.

Toch launched a mobile app in December 2016, but quickly realised that a business-to-customer (B2C) model meant burning a lot of capital. They went back to the drawing board and developed a business-to-business (B2B) product a couple of months later.

That product was a runway hit as fashion show organisers came calling for a "live experience". 

Shrivastav said the entire video of a fashion show would be streamed on the Toch app or the designer’s platform or one set up by the organisers of the fashion show. Uers could then click on a model in the app and buy clothes in real-time.

He said those videos garnered a million views without having to spend on advertising.

By the end of 2017, Toch had worked with 110 fashion designers and covered 12 fashions shows in India, including the popular Lakme Fashion Week, and two abroad.

Revenue sources 

Toch charges its clients on a per video, per tag basis. 

Beyond fashion shows, Toch caters to brands, video players, video content hosts, digital ad agencies and film production houses.

Toch currently works with more than 50 brands and eight digital ad agencies in India, and has a channel sales team in Hong Kong.

“They use our platform as a SaaS solution, upload any video content they have and make it informative, interactive or add a shopping experience element to it," said Shrivastav. "[They can] run [the videos] on their own platforms or wherever they want to host it.”

Toch has also attracted interest from infotech companies that already have partnerships with media and entertainment houses.

“Apart from that, we have also started speaking to video players who already have their own platforms.,” said Dandotia.

Shrivastav said that Toch will soon explore the possibility of creating original content as well, rather than limiting itself to working on content provided by clients. 

Besides this, the startup also operates on an affiliation model with the brands it has tied up with such as Flipkart, Snapdeal, and Amazon. 

Dandotia said that Toch gets 10% commission whenever a purchase is made via its interactive videos. 

“We also deliver videos at a rate of Rs 10,000 per video to brands,” he said. 

Nike, ICICI Bank, and Crocs are some of its paid customers.

Overcoming hurdles

Despite Toch's progress, the road has had a few speedbreakers. As is the case with most novelty products, the founders found it difficult to convince brands of its benefits.

“In India, brands are not into tech in a big way,” said Dandotia.

The backend process was cumbersome as well. The founders had to initially tag products manually and then train the machine to learn and recognise objects. 

Some industry experts feel Toch is still very much a work in progress.

Satish Meena, senior forecast analyst at Forrester Research, said that the interface is not user-friendly. In addition, the final product may differ from what the viewer first saw in the video, he added.

And there is one rather obvious challenge. 

“While it is an interesting concept allowing users to shop what they like [while] viewing [a video], the basic purpose is to watch and in the process, the user may forget to shop," said Anil Joshi, managing partner at early-stage investor Unicorn India Ventures. "The company will need to continuously think of innovative ways to make users explore shopping online.”

He said that as an alternative source of revenue, Toch can explore cross-selling and promote substitute products, which can offer higher margins.

Road ahead

Unicorn India's Joshi said that while focusing on B2B would reduce customer acquisition costs, it would also limit its potential to scale. 

For its part, Toch plans to venture back into the B2C side of the business but only when it has achieved enough scale and revenue on the B2B side.

 “We have traction in B2C. Our app has got a lot of interest from end consumers but because this is e-commerce, we need a lot more money to promote ourselves which is why you haven’t heard of us,” said Dandotia.

Under the B2C model, Toch will offer a product where end-consumers can create their own video content, auto-tag it, or pass the content they have rights to onto the platform and tag it with information, Shrivastav added. 

Users will also be able monetise their videos by leveraging the partnerships Toch has created with their e-commerce partners and brands.

For marketing, agencies are an expensive option, and Toch will be charged Rs 100 per user acquired. Toch, thus, plans to raise funds to further promote itself.

In addition, it is also looking to board the blockchain wagon to help advertisers monetise in real-time.