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Scoring On The Scope Of D2C, How Shoptimize Grew By 300% In Less Than 3 Years
Inching towards a milestone of Rs. 500 crores GMV uplift, Shoptimize, a Direct To Consumer (D2C) is giving a competition to well-known brands such as Amazon itself, to create a holistic space for companies to directly reach out to their target customers digitally.
New Delhi: Inching towards a milestone of Rs. 500 crores GMV uplift, Shoptimize, a Direct To Consumer (D2C) is giving a competition to well-known brands such as Amazon itself, to create a holistic space for companies to directly reach out to their target customers digitally. Hans India spoke with Vardhan Phadnis, Co-Founder and Chief Sales Officer, Shoptimize to know the business operation and scope of expansion in the coming Financial Year of 2022-23.
The company began its operations a decade ago, back when the term D2C was lesser heard of. Cut to 2020 beginning, as Covid pandemic and restrictions were put in order, consumer demands shifted heavily towards online platforms to purchase varied items from medicare to personal care, home décor to FMCG. Phadnis believes that D2C space in India has started booming in a span of two years and the technology offered by the company, such as Artificial Intelligence (AI) and SaaS, have become relevant for businesses to reach to its target audience.
Shoptimize launched its Accelerator program 8 months ago for brands to adopt the concept of D2C and expand their businesses. Phadnis explained that earlier the company onboarded 5 business brands per month whereas at present it is onboarding 15 brands a month. The company offers technological capabilities, digital space, AI and SaaS, provision of payment gateway, shipping partners, and marketing plans customized to each of its clients.
While Shoptimize considers itself as a parallel to brands such as Amazon, its revenue generation model is based on charging a particular percentage of the brands business revenue.
After adding companies such as Haldiram's, Whirlpool, Schneider, Luminous Technology and others to its portfolio, Phadnis says that company will foray into the segment of apparel and electronics. One of the key cliental of Shoptimize in the recent years has been Café Coffee Day, a multinational chain of coffeehouses spread across India. Café Coffee Day made headlines in 2019 after its founder V.G. Siddhartha Hedge took his own life as the company was knee deep into financial losses.
"We onboarded Café Coffee Day even prior to the certain tragic incidents that happened. CCD has been a customer since quite some time now. Yes, they experienced some difficulties and there was a period when the company was not doing so well. But now the brand has bounced back a bit and the brand also wants to ride the D2C growth to an extent that they have launched certain products which are well suited to the D2C world," Phadnis explained.
He further stated that the company, CCD, now understands the need to diversify to hedge and broaden their horizon and look towards other revenue channels as well, which is also the focus of Shoptimize for its client, as of today. He also believes that CCD has performed well since the last 1 to 1.5 years, similar to other brands.
On the client's participation, Phadnis said, "There are certain expectations that we have from business. Such as product, its catalogue, pricing, inventory. We need to make sure that the company offers the right kind of product catalogue, pricing. Market expects discounts, promotions, offers and schemes and that is certainly what the brand needs to keep up with."
As of the end of FY 2021-22, Shoptimize has 150 brands as clients and is targeting on adding 15 to 20 brands per month. Since 2020, Phadnis says that Shoptimize has reached a growth rate of 300 percent. With the recent boom of the start-up ecosystem in the country, the cofounder says that the company may look into onboarding new businesses under its Accelerator program.
While industry segments such as medicare, FMCG and apparels have been consumer favourites for online shopping, electronic items are yet to see a pickup in the virtual market space. Phadnis says that companies dealing in consumer electronics are happy to sell their products via third-party marketplaces such as Amazon and Flipkart and that D2C companies such as Shoptimize are yet to see a massive success in the said segment.