EkstopIts More Than a Grocery Store! Published On: Monday, December 15, 2014 Views 2283
We can live without girlfriends / boyfriends, Facebook, Instagram, Whatsapp, etc. but unfortunately food is the most basic necessity for the survival of mankind. Surprisingly even after the advancement of most of the sectors to the internet, this is one product which has been kept out of the reach of World Wide Web.
Anyways, since the last few years many new startups have entered this sector and have managed to impress everyone with their near-to-perfect business model, numbers and excellent service.
Ekstop is one company which has mastered this sector and is giving tough competition to almost everyone related to this industry.
So what’s Ekstop and how did it begin?
Ekstop is an E-Commerce, M-Commerce & Call Center retailer which sells & provides home deliveries for household products. To keep it simple, it’s an online supermarket. It is a one-stop solution for products ranging from groceries, domestic supplies, personal and baby care, healthcare, stationery, etc. across Mumbai.
Ekstop was the creation of co-founders – Sumat Chopra and Shaurya Mehta!
Sumat Chopra lived in the US and noticed that the in-house stores were pretty expensive at universities like Carnegie Mellon and Harvard. This gave him an idea to partner with Walmart and Costcos and start-off a website to sell e-goods. All he did was collected the orders from students, passed it on to these stores and they did the delivery.
Later; he thought of implementing the same model but in a different and larger way, thus started Ekstop in May 2012 with his partner-in-crime and MBA classmate at INSEAD Shaurya.
“Well Begun is half done,” but was it applicable to them???
Now this was no college experiment, they had so many challenges to tackle before their venture could be termed as a success! There were entry barriers such as skilled labor, getting hold of products from manufacturers directly, understanding demand-supply abnormalities, delivery system and managing a huge warehouse. To top that, they also had to deal with newbie competitors like LocalBanya and well-established threats like D-Mart, Reliance Fresh, etc!
To play safe, they raised an undisclosed funding through an angel round in June 2012 from a group of angel investors some of which included Jayesh Parekh (co-founder of Sony Entertainment Television), Patrick Turner, Sanjay Kamlani, Jungle Ventures, Deepak Shahdadpuri, etc.
Apart from that, Ekstop’s closest and direct competitor LocalBanya during that time sourced its products from FMCG firms, wholesalers and others and was doing good which made them rethink their strategy. After a lot of thinking Ekstop unlike its competitor, from day one decided to go with direct buying from manufacturers or acted as a facilitator between sellers and buyers.
By doing so, they had the leverage of a better margin on every product and were also in a better position to offer cheaper rates to customers.
Half their problem was sorted with that and from here onward they purely started focusing on customer attraction and for that they left no tables unturned. Providing same day delivery, provision of fresh items, no questions asked return policy, loyalty programs through which customers could earn reward points, quality products, etc. were some of the steps taken by them.
Soon the company was doing commendable business of approximately 165 orders a day with an average transaction value of Rs 1200-1300, going by which their monthly GMV was somewhere around INR 60-64 lakhs. Not only that but it was also preparing to expand to cities like Delhi, Bangalore and Pune.
Another major problem they faced during that time was to understand the ability of delivering fresh foods to customers which although was temporarily resolved by temperature-controlled packs but then a more affordable and reliable model was required due to which refrigerators that worked on batteries of delivery vans were brought into picture.
In the beginning of 2014, they raised another round of investment worth USD 2.5-Million from Ronnie Screwvala’s Unilazer Ventures in return for 25% stake in the company.
Thus, the plans of expansion became even wider and now they decided to extend their presence to five-six cities by next year. Un-Surprisingly their business also increased by more than a double and they were now making 400-450 orders a day. They now dealt with 12,000 products and were looking to increase the number to 100,000 within the next few months.
This was obviously good news for them but what was even more worth celebrating was that the team of 180 members spread across four locations of Mumbai had broke-even around the month of May and were gonna start making profits.
Clearly, Ekstop is now a hit amongst the masses and their word was spreading fire.
Their present year’s sales has tripled since the last year, the business is drastically increasing @ 20% to 30% MoM and their customer base has increased to 65,000 customers which is expected to cross 500,000 customers in the next 1.5 years max. What is even worth applauding is that Ekstop has penetrated 95% of the e-commerce groceries market.
The only thing that has helped them grow soundly is the strictly organized system they have followed of direct-buying model, inventory and working capital management, consumer satisfaction and taking calculative steps. But how will Ekstop react and strategize to the growing competition is what needs to be looked at!