ZopNow to enter high growth phase in 2017;

targets US $100 million GMV

By Charu Lamba
-
January 11, 2017

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ZopNow, the technology platform for online groceries which has over 25,000 products in
its catalogue, including fresh fruits and vegetables and high quality staples with a 7:00
am delivery promise is targeting US $100 million GMV in 2017.

Given the prime location of stores and asset-light model, its already optimized last-mile
delivery costs have been on a downward trend, while sales has been progressing
upwards without burning too much on expensive channels
While many other players have put brakes on expansion in 2016, ZopNow has quietly
launched its services in 10 major Indian cities and continues to grow at a fast pace,
hopeful of entering into a high growth phase in 2017.

CEO, ZopNow, Raj Pandey says, E-grocery is a massively under-penetrated opportunity

but there is potential to burn a lot of money either on supply side or logistics side, if
product is not well thought out. Over the last three years we have created an ecosystem
of sophisticated suppliers and best-in-class technology to provide max range to
consumers at lowest logistics cost.

He further adds, While the market opportunity is US $25 billion plus in next four years
and US $100 million GMV is easily attainable, a healthy and sustainable ecosystem is
what we have worked on. We now have battle tested technology and the desired
footprint of partner warehouses to turbo-charge our growth in 2017.

ALSO READ: Consumers turn to e-groceries for essentials; companies see

massive growth

The brand plans to grow deeper in its current markets by expanding its partnerships.
Given the prime location of stores and asset-light model, its already optimized last-mile
delivery costs have been on a downward trend, while sales has been progressing
upwards without burning too much on expensive channels. The brand plans to achieve
its growth target by leveraging these advantages and getting its customers to be its
brand ambassadors.

Business Model

The brand whose average ticket size is Rs 1,200 Rs 1,500 has put up an automated
workflow for replicating the offers that one sees on the shop floor of its retail partners.
With this, it hopes to provide its users with the latest and the most popular offers or
promotions that are available at any store. This coupled with large range and loyalty
program embedded in technology helps it drive up the ticket size.

Its app contributes approximately 60 per cent to total business while the website
contributes the remaining 40 per cent.
Highlighting their business model, Pandey says, We operate by tying up with major
retail partners like HyperCity, More, Metro and Star Bazaar and using their inventory and
large range to cater to our customers. Our technology platform allows us to sign up any
new partner with a go-live period of barely 7-10 days. Once the partnership
commences, we take care of the rest and the store becomes active as one of our
fulfillment centers.

MUST READ: How innovation is driving the growth of online-grocery in India

He further says, Given the close proximity of these large fulfillment centers to
customers, we are able to offer delivery slots spread across the entire day starting at
7:00 am and ending at 10:00 pm. Prime location of our fulfillment centers coupled with
our intellectual property helps us drive lowest logistics cost in industry. This model also
helps us in providing maximum range, maximum convenience and maximum savings to
our customers.

Growth Strategy

ZopNow is also offering e-grocery as a Service (SaaS) solution to large brick-and -mortar
retailers that want to go online with a proven technology platform. It launched online
retail stores for More and HyperCity along with their branded apps. The entire
technology and operations though powered by ZopNow provides a seamless
Omnichannel shopping experience to customers of these retailers. ZopNow is taking the
SaaS model global with Middle East and South East Asia as immediate markets.

READ MORE: Smart is as smart does: HyperCity shows its mojo

Founder, ZopNow, Mukesh Singh says, E-groceries have idiosyncrasies that require a
highly specialized platform compared to other e-commerce verticals. Our SaaS
customers value the fact that our best-in-class technology is actually a solution that has
worked with multiple grocery chains, unlike other generic out-of-box solutions. This
provides us an additional avenue to monetize the IP we have built.

Impact of Demonetization

In the recent demonetization policy by Government, as market witnessed a swift decline

in hard cash and with people opting for plastic money, card and e-wallet transactions on
ZopNow platform have grown more than 50 per cent along with 35 per cent increase in
growth of new customers compared to the period when Rs 500 and Rs 1,000 noted were
a legal tender.

Online grocery industry seems to be unintended beneficiary of the move as the

customer cannot postpone essential purchases for her home, Pandey reveals.

READ MORE: In 3 years Bigbasket will be among the top 3 players in F&G: CEO

Success Story

Founded in September 2011, it was among the early starters in Indias online grocery
business and continued to grow from strength to strength. Although it started off as an
inventory-keeping online retailer, it shifted the focus later to building a smart and
efficient technology platform for powering online retail.

It signed up HyperCity as its first partner for this strategy and re-launched operations in
Bangalore. Within a year of its launch in Bangalore, Mumbai, Pune and Hyderabad it was
 successful in sealing another partnership with More chain of hypermarkets and
supermarkets.

Until 2014, ZopNow was running on a completely owned-inventory model which

required enormous resources and in direct competition with both online and offline
retailers. But the e-grocer restructured its operation to a 100 per cent inventory free
model and today its not only bringing value to end consumer but along the way has
forged long-term partnerships with players like Aditya Birla Group, HyperCity, Metro and
StarBazaar among others.

At present, ZopNow is operational in 11 cities including Delhi, Ghaziabad, Faridabad,

Noida, Gurgaon Mumbai, Pune, Hyderabad, Bengaluru, Chennai and Mysuru.

Future Plans

ZopNow plans to go deeper in cities it serves currently and promote its loyalty plan
which gets its customers gifts and benefits worth up to Rs 1,500 every month. The
loyalty plan has proven quite successful in increasing the average basket size of its
orders. With higher repeats and better basket size, the brand is now turbo-charging
optimal customer acquisition channels. It is also focused on increasing general
merchandise category.

At the moment we are focused on our business and strategic partnerships in India and
abroad. We will raise funds at the opportune time. We will be utilizing the funds to
increase our brand awareness and scale up our presence in cities that meet our
criteria, concludes Pandey.

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4-min read

Betting on the 3 hour delivery promise: The

Story of ZopNow

JUBIN MEHTA

10 AUGUST 2012

2 shares

The clouds had gathered overhead in Bangalore and I was hoping not to be zapped by
rain before I reach the ZopNow office. But perhaps the rain gods too didnt want to
dampen the story and the sun was shining by the time the happy-go-lucky face of Bal
Krishna Birla guided me to his office. You know youre meeting a startup soul when you
see someone clad in a comfortable tee shirt and shorts enthusiastically greeting you,
ushering into the office. Tucked away in a business center in one of the lesser dense
areas of Bangalore, Zopnow has found a place for itself in HSR Layout.

Founded by two ex-Amazon employees, Bal Krishna and Mukesh Singh, Zopnow is an
upcoming eCommerce site delivering items of daily needs. Currently focused on South
Bangalore (and some areas in central and east Bangalore), Zopnow swears by a 3 hour
delivery policy. The Hyper market delivers everything from eggs to soaps to batteries;
the choice is befuddling.

Bal Krishna Birla and Mukesh Singh

Starting Up and the Ramu Problem

Bal Krishna was previously the founder at AskLaila and has had an experience of
running a handful of restaurants. Mukesh Singh, the co-founder has also been in the
startup world and was the CTO of MakeMyTrip in his previous avatar. They were both at
a point in life when thoughts were whirling around in their minds. They knew each other
back from Amazon days, and one fine day tried to explore opportunities. eCommerce
was huge and both believed in it but just so that they dont interfere with the others
thought process, they decided to chart out differently what they had in mind and then
compare. On comparing the two papers, the ideals matched, it was more like a match
made in heaven and thus was born Zopnow.

And the Ramu problem is what they endearingly call the problem theyre trying to solve.
Ramu is any boy who delivers items to your home from the local mom and pop store.
Ramu can be quick. He can deliver within 10 minutes. Many people asked that will you
be able to beat this kiranawala? Probably not, says Bal Krishna, but one thing is for
sure. Ramu, sometimes can be a day late, he continues. And this is the problem
Zopnow is trying to solve. They promise a delivery within 3 hours and considerable
predictability. When you order from us, you can be rest assured, the items will be
delivered in the stipulated time. says Bal.

Building the team and the Two Pizza Philosophy

Surprisingly, building the team hasnt been a very big problem for Zopnow. Coming
from a technology background, getting good people to get the backend functioning
wasnt a big issue. Marketing and sales guys was a problem but there are people
around if you look at the right places, informs Bal. Coming from Amazon, both Bal and
Mukesh, believe in the Two Pizza Philosphy which basically states that any team should
be small enough that two pizzas can feed them. I believe in that way of working.
Smaller teams. More focused work. I dont intend to make a mammoth 1000 member
team. says Bal.

Zopnow Delivery Bags

Logistics, Numbers and Trends

Zopnow believes the backend to be the heart of an eCommerce business. You cannot
succeed with an eCommerce business in India unless youre well backed with capital
and have a strong back-end that you own. Zopnow has its technology system built
inhouse and keeps a track of everything thats happening. The team (and even
customers now) can track where the delivery boys are. They also have their own
warehouse where the items are stocked from the supplier and a sophisticated system is
in place to deliver the customer.
 Being a business of daily needs, Zopnow has a great advantage of repeat customers.
Delivery upto Rs 500 is charged with a Rs 30 delivery cost and anything above Rs 500
is delivered without shipment charges. Having been in business for a few months now,
Zopnow has seen a trend that the first buy is usually around Rs 500 but once the
customer is satisfied, the ticket size speedily goes upto RS 6000, with close to 75%
individuals as repeat customers.

Bangalore is one city where customers give you that very important first chance.
People are ready to experiment online and once satisfied, theyll obviously re-order.
This first chance is crucial and is something that drew me to start up with Bangalore.
Also the fact that Bangalore has been my base for 17 years now was an added
advantage , says a smiling Bal.

Expansion

Having been sufficiently funded, Zopnow plans to keep to Bangalore for the next few
months. Zopnow will be delivering all across Bangalore in 2-3 months, post which theyll
be thinking about going to different cities. Were very sure of what we want to do and
believe that a steady pace will take us there. We dont want to be rash and make rookie
mistakes. concludes Bal Krishna.

Earn yourself a few Zoppies, order at Zopnow.

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ABOUT THE AUTHOR

JUBIN MEHTA
Jubin is an old timer at YourStory. Deeply entrenched in the Indian startup ecosystem,
he is currently focused on building 'Slow Tech' for YourStory. He operates from the
mountains of Himachal Pradesh where he plays with technology, farming and eco-
construction. He can be reached on Twitter @jub_in and on mail at
jubin@yourstory.com.

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