Businesses cannot be built by giving huge discounts, says zopper’s neeraj jain – the economic times

In June 2014, when Neeraj Jain decided to pivot Reviews42 — a community-based product review platform which had morphed into a listing site for local consumer durable sellers — he was faced with two ‘massively tempting’ options.

The first one was to ‘buy’ consumers by burning cash, as all other startups were doing. High profit small business And the second was to stay away from the ‘untouchable’ brick and mortar segment.

The 37 year old, as it turned out, didn’t give in to temptation.

High profit crops He shunned both the options. Business with high profit philippines “We have never been in business of burning cash,” contends Jain, who rebranded Reviews42 as Zopper. Small investment high profit business india Businesses cannot be built by giving huge discounts, he adds. List of business with low investment and high profit The move seems to have paid off.

At a time when wel l- funded hyperlocal startups such as PepperTap have shut down and equal ly large ones like Grofers and Zomato have been forced to scale down operations, Zopper has not only survived but flourished to become India’s largest hyperlocal electronics and consumer durable marketplace, claims co-founder Jain.

The mortality rate has been high in hyperlocal, he points out, because people have been reckless with investors’ money and have not looked at the business model and commercial viability.

The Tiger Global-backed startup has earned gross profit of $27,000 and revenues of $1.3 million in 2015-16 from sales of around $100 million. High profit margin business ideas “We are profitable on gross level and will turn fully profitable by 2016-2017,” claims Jain, adding that he plans to double the sales this year.

Under normal circumstances, the financial report card of the startup might have been ordinary. Small items with high profit margin But it stands out in the context of a startup ecosystem where even so-called unicorns such as Flipkart, Snapdeal and Shopclues are struggling to turn profitable.

Zopper, which earns a commission from sellers on each transaction, has over 15,000 merchants on its platform. High profit cash crops It is present across 28 cities, plans to expand to another 50 in three months, and has raised $27 million in funding from marquee investors such as Tiger Global, Nirvana Ventures and Blume Ventures, he says.

What has worked for Zopper, Jain explains, is sticking to four business fundamentals: zero discounting, zero inventory and logistics cost, word of the mouth marketing and alliance with brick and mortar retailers.

In fact, a string of tieups with local retailers is one of the most interesting marketing masterstrokes which sets the startup apart from other ecommerce players, says Jain, adding that Zopper has also roped in top electronics retail chains such as Croma, Prestige, Viveks and Reliance Digital.

Its expanded warranty scheme ‘Zopper Assure,’ where a customer pays an additional 8%-10% of the product value to get an extra year of warranty beyond the brand’s commitment, has also helped in raking in high margins, he says.

The beauty of the model lies in its simplicity: a deep focus on electronics without wasting time on a horizontal play that offers everything to everybody, says Harish Bijoor, who runs an eponymous brand consultancy firm based out of Bengaluru. Small scale business with low investment and high profit “Add to it the zing of comparative price shopping, and this is an undeniable hit,” he says.

Bijoor feels that Zopper’s business model is a clever cusp play between the brick and mortar traditions of the market for electronics and the modern ecommerce format. High risk high profit “Zopper plays with assets that are already in the market,” he says.

However, he sounds a word of caution. Business ideas with low investment and high profit in india The biggest challenge is the impending entry of other players in a segment that seems undeniably profitable. High profit business in pakistan “The herd mentality will set in,” he says. Best business with high profit The second big task: to ramp-up the business: “Zopper needs to be not in 50 cities, but in 5,000 cities and towns. Low investment high profit business That’s a daunting task.”

Another area of concern: what if the ecommerce biggies like Flipkart and Snapdeal reorient their electronics business and collaborate more comprehensively with local sellers? “That would surely turn the tide in favour of biggies,” says a top official of an ecommerce firm, requesting not to be named. High profit items So far what has worked for Zopper doesn’t guarantee that it would work in the future as well. Products with high profit margins “The might of ecommerce biggies is still formidable,” he says.

Zopper’s co-founder Jain is only too aware of these potential setbacks. High profit low cost business ideas Retail in India is fragmented and unorganised. Low cost high profit items The challenge, says Jain, is to make retailer adapt to the fast changing tech world so that more efficiency can be brought in from inventory, pricing and logistics.

However, he refuses to get bogged down, considering this an area of big opportunity. Low cost high profit business in india “The Zopper model is extremely scalable, sustainable and profitable. What products have high profit margins This provides a very strong edge,” Jain signs off.

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