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Zepo - Simplifying eCommerce for SMBs, Plans to Hit a Gross Revenue of Rs 8-10 Cr in FY 16-17

Zepo has enabled Rs. 44.2 crore worth of sales for its customers in the last financial year. Its gross revenue reached Rs. 3.8 crore in FY’16, and the company is on track to clock a gross revenue of Rs. 8-10 crore in FY 16-17.

Nitin Purswani is the founder and CEO of Zepo Technologies, a company that helps SMB's go online. An entrepreneur at heart, he is doggedly determined to simplify ecommerce for millions of small businesses in India.

In an exclusive interaction with BWDisrupt Team, Nitin shares his entrepreneurial journey and details about the venture. When asked about the idea generation, Nitin said, “It all started when I and a friend decided to manufacture and sell slogan t-shirts right after college. Initially, we were supplying these t-shirts to 50 retail outlets across Pune, Nasik and Mumbai. In about two years, we scaled to selling 5000 t-shirts per month. Then, we tried to take this t-shirt business online.”

Zepo's aim is to simplify ecommerce for small businesses. To achieve that, Zepo offers a 4-fold solution, namely:

1. Building an Online Store: One can set-up a fully functional ecommerce website in minutes, without any technical know-how.
2. Providing Logistics services: Via Zepo Couriers, the company provides an easy-to-use platform that helps clients schedule and manage their shipments via FedEx, Aramex, Bluedart, etc.
3. Online Marketing: The firm helps its clients increase traffic to their online store without them having to do anything.
4. Help with Selling on Marketplaces: Zepo helps its clients sell their products on various Marketplaces like Flipkart, Amazon, eBay etc. & manage all inventory & orders in one dashboard.

Zepo has raised its Pre Series A round recently. The company’s revenue model is tightly linked with the success of its stores & the firm makes its money from all the solutions that it provide to the customers.

Online Store - A monthly subscription is charged per customer.
Online Marketing - A certain percentage of commission is charged on total ad budget.
Logistics - A certain percentage of commission is charged on courier charges.
Marketplaces Management - An Order Processing fee is charged per order.
Payments - A certain percentage of commission on online payments processed across all stores.

Zepo has enabled Rs. 44.2 crore worth of sales for its customers in the last financial year. Its gross revenue reached Rs. 3.8 crore in FY’16, and the company is on track to clock a gross revenue of Rs. 8-10 crore in FY 16-17.

In terms of future plans, Zepo plans to mainly focus on a couple of aspects like:

- The company plans to hit a gross revenue of Rs. 15 crore in FY-17-18 along with being EBIDTA positive.
- It also aims to keep optimizing its automated-marketing for stores thereby ensuring higher ROI for store owners

Commenting on the market size & opportunity, Nitin stated, “Since we are in the business of taking offline businesses online, there is a sizable market in India for the same that we would like to tap into. India has around 50 million SMEs. Out of which, the total addressable market for us is close to 11 million. Out of these 11 million, about 1.5 - 2 million SMEs have their social media presence on Facebook page, which is strongly indicative of their willingness to sell online. This segment is our immediate target, as they are the low hanging fruit belonging to a much bigger tree of prospects.”

Zepo faced three main challenges initially which are as follows:

1) Simplifying the process of setting up & managing a website as much as possible

2) Simplifying the process of sending couriers & reducing the costs involved

3) Simplifying online marketing to easily get visitors & maximize conversions with no extra efforts from the seller.

The company resolved the first problem well, and the solution became a competitive advantage for it. With its Android app, people can set-up & manage critical aspects of their online business on the go.

To help resolve the logistics problem, Zepo has partnered with Bluedart, Fedex, Aramex & others to create a multi-carrier shipping solution. Now, the firm able to provide very economical rates across the board & the ease of single click scheduling.

“We have been constantly working on the last, and perhaps the most important challenge - simplifying online marketing for SMEs. We have managed to make inroads here & can now create campaigns for our store owners, publish them on FB / Google, and optimize it for max ROI - all without the store owner having to do anything more than a couple of clicks.

There are quite a few on-site optimizations that we continue to do in order to keep improving conversions. The online marketing challenge is something that we’ll continue to focus on over the next couple of quarters. We are constantly working towards process and product optimization to minimize latency between processes and provide an intuitive and delightful experience to our customers, added Nitin.

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