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Going online to find DEALS OFFLINE


Startups are bringing together the online and offline, building apps that help customers find the best discounts in their neighbourhood

Vani Nagpaul heard about cashback app Crown it from her colleagues in Gurgaon a year ago. The 22-year-old and her friends use it regularly to get discounts that go up to 50% at offline restaurants.  “The app is a boon when we want to go out, especially at the end of the month when cash is tight,” says Nagpaul, who used to work at audit firm KPMG. “We get deals and discounts at almost every restaurant in Gurgaon,” she adds. All she does is upload the bill of a restaurant she’s visited. and she gets 15% of the bill amount back in the form of ‘crowns’. where one crown equals I. The crowns can be redeemed as discounts at other restaurants in the vicinity. Her latest deal was getting 2250 off on a restaurant bill of MO. “It is great for someone who has to think twice before taking out cash from the wallet.”

Crownit isn’t the only app drawing customers with promises of deals offline. 020 or online•to-offline is the term that describes sites and apps like Crown-it, which provide information. service and discounts online on websites and apps so that customers can get better deals offline, in real-world restaurants. shops and movie theatres. It’s a channel that helps old-world, brick-and-mortar businesses draw new-age, tech-savvy customers.

O2O startups also help businesses deal with excess supply by finding customers close to them. For instance, when a restaurant in Chennai realized there were not many takers for the buffet that day, they offered it at a 60% discount. Ruben Chandy. 23, found the deal on Nearbuy (formerly Groupon India) and got himself a good meal. Chandy says he’s been the beneficiary of close to 100 similar deals on Nearbuy. “Once you sign up, they send custom notifications about deals depending on where you are and the price difference is quite notable. I have used it for restaurants, salons, says Chandy

Nearbuy CEO Ankur Warikoo changed course for Groupon India last year when he realized the discount coupon model was not growing fast enough, and that India needed a strategy different from the one that worked for the US parent company. Warikoo roped in venture capital fluid Sequoia Capital to buy out the stake of the Chicago-based Groupon.

“India is a big market and what works in the West does not necessarily work here.” says Warikoo, adding that the site has more than 35 lakh unique visitors every month. They get an average of eight visits from one customer every month with two of those turning into  transactions. “We want to make it four a month,” says Warikoo, who is aiming to make Nearbuy cash positive within a year.

Crownit founder Sameer Grover says they target people between the ages of 22 and 32 who are in their first or second jobs. Grover, who worked as director of products at cloud telephony company Knowlarity, started Crownit in 2014 after noticing that people in India were usually averse to using coupons. He identified hubs in the top cities where most restaurants are located and decided to offer cash back discounts which could be used at any restaurant in one hub. “There are 50 hubs in Gurgaon and 30 in Bengaluru,” he says. The average value of a transaction on platforms like these is 11,500.

More than half the customers are within a 1 km radius of the merchants. Nearbuy’s average discount value was 63% last year, which has come down to 41%. “When it is real time and the customer is already at the location, the need for big discounts is low,” says Warikoo. The app has more than 20 lakh down-loads, he says.

The companies raised funding last year and say their cash burn is low as the deals are often given by merchants. “We work on a low-cost structure and healthy margins of up to 10% on every transaction,” says Manish Chopra, co-founder and CEO of Little, which is funded by mobile wallet firm Paytm and New York-based investment firm Tiger Global. While restaurants are the early adopters, other merchants like multi-plexes, apparel stores and spas have come on board.

There are more than 50,000 mer-chants on Nearbuy, while Crown it and Little each have 10,000 merchants. Other companies have kept the model the same but offer different content. Shouut, for instance, is a Delhi-based app that offers curated content such as reviews and it lists events, trips, shopping places and restaurants. Fashalot follows a similar model but just for clothing and accessories brands. Started as a product discovery store, where a user could enter a product name and get deals closest to him/her, Fashalot pivoted its model this year to a store discovery platform.

“One can follow a store, rate, check-in, and get points after uploading the bill. One can then redeem these points in restaurants,” says Am it Kaushal, who previously worked at Intuit and started Fashalot in 2014. “E-commerce is still just 1% of the retail industry in India. In the US, it is 12%. The rest of the trans-actions are still taking place offline.” he says, explaining why the future belongs to companies like his.

Fashalot says that it is operationally profitable and crossed 120 crore in sales last month. It has agreements with 2.600 offline stores, including Bata, Woodlands and Benetton in Delhi NCR and Bengaluru. It charges a commission for every customer who comes to the store through the app. “Last month, the app brought 25,000 people to the stores.” he says.

They’re also investing in analytics to understand the consumer better. “There is no point in pushing a biriyani to a person who does not like it,” says Chopra of Little.

Karan Mohla, executive director at IDG Ventures India, notes that there are well funded companies in the space. “While they have done well in terms of opening up discovery for offline mer-chants, the success will depend on how well they are able to monetize,” he says, adding that the players run the risk of getting customers who are looking at the best deal and not creating loyalty.

Most merchants love the platform as they provide the crucial incremental sales when they need it most. The plat-forms account for 15% of sales of popular fine dining restaurants, while con-tributing 1 %-3% for fast food chains like KFC, Pizza Hut and Cafe Coffee Day.

Venu Madhav, CEO of Café Coffee Day, says the platforms offer the coffee chain multiple ways of easily reaching different consumers. “But it will take time to improve efficiency on these plat-forms. Conversion rates are lower than expected. At this point of time, it is a good way to broaden our base,” he says, adding that as we go forward, “we will see more mobile and digital players.”

Source: TOI

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