‘We Are Looking at a Market Opportunity of $40B of Electronics and Mobile Business in India’– Says Neeraj Jain, CEO & Co-founder, Zopper

Zopper.com is Indian hyper local mobile marketplace featuring over 15,000+ offline retailers. Founded by serial entrepreneurs Surjendu Kulia and Neeraj Jain, Zopper taps on the benefits of shopping at a retail store and marries them with the convenience of shopping via mobile phones. Users can buy from the comfort of their homes/offices and get the product instantly from their nearby trusted stores. Backed by marquee investors such as Tiger Global, Blume Ventures and Nirvana Ventures Advisors, the company has raised over $27 million in venture funding.

In an interaction with Sujata Sangwan of BWDisrupt, Neeraj Jain, CEO & Co-founder, Zopper, shares journey of his venture.

1) How was it started?

In the year 2011, the first business that was initiated was Brandandme, which showcased a brand’s unique selling proposition to its customer base through quizzing and social conversations.

But going ahead with this preposition was too early for the business and the next installment was Reviews42, a community based product review platform.
The idea was to syndicate reviews to other e-commerce companies since they were a cost-effective way of customer acquisition. Next, this morphed into a price comparison platform.

"We did reviews and then crawled websites to showcase the price points for various e-commerce platforms. We realized it was a small market. Reviews were a good-to-have, not a must-to-have thing for e-commerce players." Reviews42 gave way to Zopper in June 2014.

2) Unique key feature/services

 We connect our users to the trusted local stores, which are in close proximity.
 We provide much better & deeper product choices, better prices, faster delivery and the trust and assurance of a hassle-free after-sales service.
 We give retailers the opportunity to own their products and prices with an amazingly built Retailers’ App, where the retailers have the ownership of the products, prices and the delivery.
 We are adding new source of revenue for the local retailer by giving the products that they can sell to consumer. Like Zopper Assure extended warranty. This is product is sold on our App and also through the retailer stores.

3) How is it different from existing ones?

The biggest difference between Zopper and traditional e-commerce model is basic idea of digital commerce which is Hyper-Local v/s centralised. The e-commerce models in US and China evolved basis the market realities of those markets. India is a very unique market with a very well penetrated, unorganised and huge retailer ecosystem. The e-commerce model for India has to take this reality into account. Zopper model is weaved around this reality and is leveraging the unique strength of the country.

A. Zopper’s model is an extremely asset light with zero inventory, warehouse and logistics and hence is not money guzzling model like the traditional e-commerce companies. Zopper offers a no compromise shopping experience with the trust of the local store and the convenience of the online shopping.

B. Zopper is a ‘friend of Retailers’ model v/s the ‘Parallel infrastructure’ model of traditional e-commerce cos.: Traditional e-commerce companies are trying to build a parallel ecosystem to the existing retailer ecosystem by creating or supporting large warehouses, aligned Mega national distributors/partners, huge discounting, intercity deliveries etc. all this leads to huge cash burn at the same time trying to squeeze or eliminate the local retailers. Zopper is partnering the local retailers, bringing more efficiency to them and make them stand up against e-commerce biggies.

C. Retailer friendly policy: Zopper policies are designed to make local retailers life easier and merrier. For ex. Zopper since beginning has a 10 days replacement policy instead of 30 days return policy that most of the traditional e-commerce co.’s have. This solves one of the biggest concern of the retailers/distributors who work with traditional e-commerce co.’s as the returns can be in double digits in many categories, leading to huge losses. Also Zopper has an automated T+4 settlement for the dues of retailers with absolute order level transparency. This helps retailers manage their working capital efficiently.

D. Owning the complete life cycle of the product: Zopper is building the end-to-end ownership model for Electronics and other categories. This would be in contrast to the focus on immediate sale model of traditional e-commerce. Zopper’s idea is to have a long term consumer engagement like it happens in an offline business. For this Zopper is partnering with Brands and Authorised Service partners of brands. This would add much more value to consumers then just artificial price discounting. Trust, reliability and peace of mind through post-purchase installation, warranty & service are important drivers in these categories.

E. Product Assurance: Unlike other traditional e-comm players, we have also leveraged our partnership with offline stores to sell our extended warranty product 'Zopper Assure'. Here a customer pays an additional 8-10% of the product value to get an additional year or two year of extended warranty beyond the brand's warranty. This is a true marriage of Online and Offline. The retailer gets to enhance his income as a result of Zopper partnership. This is possible only in hyper local model and not traditional e-commerce model.

F. Myth breaker: In terms of price competitiveness, we are better than the traditional e-commerce players when it comes to categories such as air conditioners, refrigerators and washing machines, where they have to spend on logistics and warehousing. This has broken the myth that offline prices are higher than online. And after the new FDI guidelines in e-commerce, that states e-commerce players cannot influence price, discounting has come down on traditional online marketplaces. This augurs well for us.

4) Funding status

Zopper has earned gross profit of $27,000 and revenues of $2 million, from GMV of around $100 million in 2015-16. We have raised $27 million so far from Tiger Global, Nirvana Ventures and Blume.

5) Monetization model

Zopper has 3 source of revenue currently, which has put our business on strong path to profitability and sustainablity. We earn commission ranging between 2-4% on our marketplace model. This is highly scalable as we increase the popularity and coverage of our marketplace. The second source of revenue is the Zopper Extended Warranty offering, where the value ranges from 8 to 12% of the product price. We are seeing a very strong traction of this on our platform as well as through our Offline Retailer stores. The third stream of revenue is from EasyPOS, which is our cloud based CRM-cum-POS product for retailer automation. This product has picked up very well and we are deploying it at the retailer stores. We also see monetisation possibilities in our ‘Ownership’ part of the business in future.

6) Traction details

Zopper has been growing at a phenominal rate of 50-60% month on month, although on a smaller base. But the feedback and user response has been very positive. We are also adding 1000+ sellers every month in local neighbourhoods, which is increasing our selection, pricing and delivery competency.

7) Future and marketing plans

We are very bullish on Zopper hyper local model being the ideal e-commerce model for India. We see ourselves as the largest Electronics e-commerce Offline-Online marketplace in India in next 5 years. The way we are trying to bring the entire Electronics ecosystem to Online platform from Discovery to Fulfilment to Ownership, no one else has done anywhere in the world. Zopper would be present in 100+ cities in 5 years, with 50000+ local electronics retailers. This should give us 10% market share of entire Electronics market in India.

8) Challenges faced

While we have a great model and we are building it by putting all the pieces together, there are some challenges which are also area of big opportunity for us:

1. Retail network in India though very big and well penetrated is fragmented and unorganised. These are traditional local businesses who have not adopted technology till now. The challenge for Zopper is to make retailer adapt to the fast changing tech world so that more efficieny can be brought in from inventory, pricing and logistics.

2. We want to offer 24 hrs delivery promise to our customers, to make that happen there has to be certain science and discpline which has to be brought in operations through the retailers. Since the retailers are not used to this kind of professional processes, it would take some time to align then

3. While Zopper model is very unique and is aligned with the way Indians buy or want to buy, it is imperative on us to make our customers and electronics Brands, that we want to partner for our ownership/servicing business, understand the differences between Zopper hyper-local and traditional e-commerce model. It will help us to create a powerful differentiated consumer brand and partner of big electronics manufacturers.

4. Our EasyPOS and Zopper Assure are great products and can add tremendous value to customers. The challenge is to make them the new way of life for customers and retailers.

9) What is the market size & opportunity?

We are looking at a market opportunity of $40 billion of Electronics and Mobile business in India. Only a small part of this is Online today through tradition e-commerce players. We can capture 10% of the market in next 3-5 years, which would make us one of the largest player in this category in India.