This Start-Up Is Making Ecommerce Easy For Rural India
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Ramanathan Ramachandran and Karthik Nataraja were colleagues in TVS Finance and Services where they were specifically looking after rural marketing. Both of them gave up their corporate careers to start an entrepreneurial journey. “We met Narayanan who had worked with multiple big telecom players focusing on their rural operations specifically. Narayanan became the co-founder of Boonbox,” said Ramachandran, co-Founder and CEO, Boonbox.
Inthree Access Services, the parent company which operates Boonbox, was founded in 2013 by Ramachandran, Natarajan and Narayanan which is an exclusive assisted e-commerce platform operating in rural areas. Boonbox directly connect B2B and B2C customers in rural areas and offers all the product categories and SKUs to the rural customer.
“We have always felt that e-commerce has more relevance in rural areas than in urban areas for the simple reason that in urban areas all of us have access to all the products. We only go to the websites because we get a better deal not because of any lack of access to them in the physical markets,” said Ramachandran. Boonbox is present in 16 states and has already served 2.5 million customers so far. Boonbox is available in 300,000 villages, or 47 per cent of Indian villages.
Talking about his entrepreneurial journey, Ramachandran shared, “Nothing has happened in terms of improving rural distribution of commercial products in India since Independence.
It was a white space for us. There are no benchmarks for us to follow. It has been a journey that has involved a lot of creativity and innovation to think of everything from base zero.”
Tapping The 70 per cent of India
Ramachandran claims that rural India makes up 70 per cent of India and the market is highly under-penetrated. “Rural customers are incredibly aspirational. They have access to the Internet and want products such as refrigerator, television and a smartphone for themselves,” said Ramchandran. He further added, “Though they do have access to the Internet and consume its content, they do not perform transactions online. It is a cultural thing and Boonbox has an advantage as it employs the locals—people who they personally know and trust to facilitate the e-commerce retail.”
Boonbox has a local team, local language-based apps available in various local languages and a customer service team speaking the languages of 16 states to make buying process seamless for the rural customer. “Our business is all about ‘co-creation’. We are the ubers of the rural market you can say (as we have local partners),” said Ramchandran.
Boonbox provides home delivery of products that rural population otherwise don’t have access to. The start-up sources products and gives a demo, provides installation and post-sale services to customers. Boonbox has an incredibly deep last mile network and an elusive distribution reach in rural India.
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A Market Awaiting Boom
Ramachandran claims though the economy is hardly hit but there is still more scope in the rural market compared with the urban. “The economic slowdown is not going to affect the rural market as it is highly under penetrated. Boonbox is a small company compared with the available market size and we are the only ones doing something like this,” said Ramachandran.
According to Ramachandran, Rural India is going through the same phase that urban India underwent post-Liberalisation in 1991. He claims that urban customers have saturated as they do not need to buy a television and a smartphone as they already have them, and it is the rural India that is aspiring for these products.
Boonbox has over 200 brands associated with it in various categories. They are expanding their brand presence through Boonbox and are creating a new market for their products.
The VC Take
Boonbox in 2018 raised series A funding of $4 million led by Ventureast. Orios and IAN Fund also participated in the round. “Earlier Ventureast had invested in Atyati Technologies which was a technology platform for rural financial inclusion. As a continuing focus on that market, Boonbox presented an exciting opportunity as it is solving the problem of rural access to consumer brands, purchase financing and last-mile doorstep delivery, all of which have been significant impediments in the growth of rural commerce,” said an investor from the Ventureast.
The Chennai-based start-up used the funding to expand its presence from 89,000 villages to 300,000. It also invested in its technology and claims to have created an exclusive and exhaustive customer relationship management platform from the interiors of India.
Boonbox last year witnessed a turnover of INR 170 crore and is aiming to become profitable in the next nine months. The company is also in the mid of raising the second round of funding and we can expect an announcement very soon.