Building For Digital Bharat: This Start-Up Wants To Help the Next 400 Mln Users Transact Online
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Serial entrepreneur Nitin Gupta was hanging out with his family in Aligarh, Uttar Pradesh one night about three years ago when he came across a cousin of his hurrying through YouTube videos trying to exhaust his daily quota of free data.
“That was like a lightbulb moment for me,” he says, explaining how the next few months were spent doing extensive research on why, despite the supposed ‘Jio-fication’ that had enveloped the country, a lot of people in the tier-II, tier-III and tier-IV cities were still not using the internet to buy.
People were using WhatsApp extensively and there was a steady rise in the number of people who wanted to consume content, but there was no transaction happening, according to Gupta. Starting from close family friends to the likes of shopkeepers and drivers for whom a mobile phone was the first introduction to digitization, Gupta and co-founder Shubham Paramhans started funding people with a basic amount and asked them to use one of the existing e-commerce apps to order something.
“More than 95 per cent of them were not even able to proceed beyond a certain point, that was like a behavioral study,” he says.
And that’s when they stumbled upon Mall91, a vernacular social commerce platform that combines live videos, social gaming, social content, voice, and messaging to help users outside of big cities adapt to e-commerce.
Venturing Into Social Commerce
The first version of the app offered about 100-150 products, with each having a video alongside. To reduce the need to type, there was a basic voice-based artificial intelligence, built with the help of existing Google APIs and once a person wanted to transact, they were redirected to a chat on WhatsApp where they confirmed their order. Once an order was placed, it was fed manually to the order management system.
Gupta says the first version tested three things, the three basic building blocks for the final product: voice, video and messaging. “Video made it a more engaging experience, voice made it easy to search the catalog (a direct result of their earlier behavioral research) and third was they already knew chats very well, hence the messaging checkout.”
Over time, while the basics of the business have remained the same, a lot has changed in the app. Users are no longer redirected to WhatsApp. The company has developed a chat feature on the app itself.
Even on the engagement front, there are now live shows. “People look forward to some of these shows, some of them have actually become mini celebrities,” quips Gupta. He says these are habit forming activities and considering that people in these smaller cities and towns have a lot of time on their hands, they have observed that a large number of them convert to sales thereafter.
Utsav Somani, an angel investor who has backed the company from an early stage, feels the same.
“People don't realize that these people have more time than money and Mall91 came up with a solution in such a beautiful way...to allow people to build trust first,” says Somani.
Theme Is Aspirational
“The common theme across all this is aspirational,” says Gupta, responding to a question on the kind of products that they currently sell.
Mall91, the name of which is derived directly from India’s dialing code, is focusing a lot on three to four categories as of now: mobile accessories, fashion and fashion accessories and daily needs. Gupta cites the example of selfie sticks and how they have been an extremely popular item in their catalog, with a lot of demand coming from a small village in Uttar Pradesh.
“They see things in movies, in videos, entertainment has ventured very deep into India, but then where do you see the access? That’s where this whole e-commerce thing comes in.”
Apart from earning from product sales, the company now has some other sources of revenue. It now has a feature ‘Star 91’, where the company is bringing influencers and small-town celebrities, and one can wish a video for their family members for a cost. These features also help the company go viral, without having to spend much on marketing, says Gupta.
Somani, explaining his thesis behind investing in the company, says, “everybody's trying to call for video commerce and all of those things but those are all features. And this was a guy (Gupta) thinking how these amazing features will come together and platforms will emerge out of that.”
The company raised a $7.5 million Series A round led by GoVentures, the investment arm of ride-hailing firm GoJek in October. It has since put its feet on the pedal, scaling rapidly.
Mall91 is currently available in eight languages but is currently heavily focused on Hindi, says Gupta. Over the next few quarters, they would be putting their focus on making the whole experience available in other languages as well. “The reason is not technology because tech is there; there are a lot of ancillary functions that you need to build for a particular language, for example, support on email or chat for those users.”
On Google Play Store, the app has over 5 million downloads and Gupta claims they have a daily active user (DAU) base of about 600,000. Given the pace at which they are growing, he sees the DAU number crossing 1 million in the next few weeks. Within six months, he says the number of downloads will rise to 15-20 million.
And while the focus continues to be India, where becoming the top player would take at least 2-3 years, there are plans of exploring opportunities in Southeast Asia as well, he says. On an unit economics basis, the company is already profitable and Gupta says as scale kicks in, net profitability wouldn’t be too far away.
“Your people costs will remain the same, your infrastructure costs will remain the same and your orders will be like 50 times higher than what you're doing today, so it's a very predictable path to net profitability.”