Diesel Door Delivery Is Accepted Now And Will Grow In Times To Come: Mayank Agarwal, Co-founder, Humsafar
In an interview with BW Disrupt, Mayank Agarwal, Co-founder, Humsafar, speaks about company's business model, challenges, funding status and more
Brief us about your business model. How did you get the ideas of this business?
The idea behind Humsafar was to provide a platform connecting resellers and customers and create a Loyalty Programme around repeat purchase. We wanted to solve the problem of the informal-level Diesel Door Delivery in large volume and industrial customers. Till now, this need was being serviced by entrepreneurial petrol pump dealers. The outcomes were heat and dust, delay in diesel supply due to road congestion, customer concerns, and the problem of global warming due to a larger carbon footprint.
Our solutions include two aspects: a PESO compliant Bowser, which is practically a Mobile Petrol pump that is automated and geo-fencing compliant. The other one is a tech platform or App for order placement and products. Our solutions are customer and vendor friendly enabling geo tracking and backend analytics for machine learning. One of the key aspects of our business model is sustainability and therefore, the capability to provide end to end solutions. We fabricate bowsers and have a fully functional tech platform. The government also decided to back it up and brought in policy amendments which sealed the investments for good.
Further, we have put in place a customer facing organization structure. We are the first start up in the sector to place territory managers in various major consumption centres, which gave us dividends. We have been leading by example and expect what we do to become an industry norm going forward – something that we are very proud of.
How are you different from the existing competitors?
Our business model is very unique since we are among one of the very few to offer end to end solutions and capabilities. Our organization is driven by people with deep insights about oil retailing, something that is very critical for sustaining the business model. There is no one else in this sector with such an experience. Our business model received further validation when a transnational client base of customers got inclined to invest with us.
What is the funding status and monetization model?
We are currently self-funded and our business operations are self-sustaining. Our business model developed as we progressed. However, we also believe that the sector and our startup Humsafar have reached a stage where we can look forward to the next round of growth. The need of the hour is investments that would enable aggressive expansion and in improving our technical and digital marketing capabilities. We also aim to expand our bowser fabrication capacity and modernize the plant further. We are exploring strategic investors who may want to have a stake in the sector.
What challenges are you facing in running your business?
The challenges faced by us are quite common given our unique field of work. There are many processes which are yet to be streamlined for easy approvals.
What are the traction details (like users and other achievements of the company)?How do you look at expansion?
Following the policy amendment in early 2019, the real work started in the second quarter of the year. Since then, we have developed our tech platform called Fuel Humsafar, established a functional website, improved digital marketing and corporate communication capabilities, and also made vendor partners in many cities. We have also sold 8,132,168 litres of diesel through our App so far. The App has been downloaded 8549 number of times and we have fabricated more than 300 bowsers. Another development was that we managed to make an immensely capable and exceptional set of oil industry veterans a part of our advisory committee. Humsafar got associated with over 50 fuellants in guiding them through the process. Therefore, the overall journey has been very good and progressive.
Even during COVID-19, we were able to get a lot done. Humsafar became the first company to supply diesel for heavy harvesting machinery in Haryana. We launched the service during very difficult lockdown period when farmers could not get even their barrel filled.
Now, we are on the threshold of our second round of expansion. Going forward, we are targeting the fabrication of more than double the numbers of bowsers in the current year. We are entering into strategic long-term partnerships with other stakeholders and will double the number of territory offices. We also plan to improve our service vertical. We also look forward to some traction on diesel sales given our unique strengths in this area.
What are your marketing plans?
Our marketing plan will revolve around improving algorithms and technical capabilities.
We aim to expand the Bowser fabrication numbers by more than 100% and double our territory offices. We are also building servicing capabilities as a part of our Bowser+ commitment and entering into strategic partnerships.
What has been the biggest learning’s so far?
The biggest learning from our success has been that there is no substitute for hard work at any level. Personally, I have learnt to be more patient. We understood how it is important to build capabilities through partnerships for growth and the latter need not be a zero-sum game. We will always keep the customer on top of whatever we do and we are taking proactive steps towards this end.
What is the market size and opportunity?
To understand the market size and opportunity, we must look at different aspects. From a consumer point of view, there are several pain points around getting diesel supplies. There is a large upside waiting to open up enabling the B2B sector further. There is a need for stakeholders especially OMCs and the government to create a model for servicing large trucks and buses in a safe manner.
The second thing is that there over 60,000 petrol pumps. According to a rough estimate, there would be approx., 20,000 makeshift bowsers operated by petrol pumps across network. These would get replaced over time.
The third aspect is that fuellants are being registered which opens a large area for diesel sales. The government may have to soon open up the sector further to ensure economic viability across all locations, where the industrial potential is low. Customers would thus get used to paying service charges and realize that discount/credit in the industry has done more disservice rather than helping, so far. Therefore, this is very likely to be a big success story around startups in this sector in the country.
How did you manage your services during lockdown?
During the lockdown, essential services and even the agriculture sector needed diesel supply. Later, even as the economic activities resumed, door step delivery was being preferred. All stakeholders including the government and OMCs saw the value of this sector during and after the pandemic. Even the media played a positive part in lauding the efforts of startups. We were able to connect with OMCs and petrol pump dealers virtually during the lockdown ad educate them. All these things have paid a huge dividend.
How has your company been adjusting to the new-normal?
We were quite functional during the time that the pandemic was at its peak since this sector was exempt. Therefore, it did not affect us. Furthermore, the lockdown made the society and all stakeholders aware of the importance of this sector which helped all startups, including us.
Have you witnessed any major changes in the business/sector in the post Covid scenario?
In just one sentence, diesel door delivery is much more accepted now than ever before, is more settled and will expand and grow in the times to come.
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