1. Even as Urban Clap, EasyFix, other on-demand service companies’ orders jump, commissions drop to 10-12%

Even as Urban Clap, EasyFix, other on-demand service companies’ orders jump, commissions drop to 10-12%

However, commissions have dropped to 10-12% from 18-20% on services such as deep cleaning, pest control, carpet cleaning, sofa shampooing or house painting.

By: | New Delhi | Updated: October 29, 2016 7:47 AM
commissions have dropped to 10-12% from 18-20% on services such as deep cleaning, pest control, carpet cleaning, sofa shampooing or house painting. (Reuters) commissions have dropped to 10-12% from 18-20% on services such as deep cleaning, pest control, carpet cleaning, sofa shampooing or house painting. (Reuters)

While on-demand services companies are catering for more orders this festive season, a fall in commission charges has muted the festive cheer. Players such as Urban Clap, OTJ247, Timesaverz, EasyFix, and Housejoy claim that there has been a two-three fold jump in orders — to 400-500 from 100-200 otherwise.

However, commissions have dropped to 10-12% from 18-20% on services such as deep cleaning, pest control, carpet cleaning, sofa shampooing or house painting.

The average ticket size for a home service such as pest control, carpet cleaning, sofa shampooing is priced at R1,000-1,500, and other services like deep cleaning and house painting, the ticket size is close to R3,500.

“We have reduced our commission to 12-15% in October from 16-20% but the average ticket size remains the same,” said Suhail Vadgaonkar, vice-president, customer experience and brand at UrbanClap.

Vadgaonkar claims that in September, the company posted a gross merchandise value (GMV) of R59 crore and is expecting to earn Rs 67 crore in GMV during the festive month — October.

UrbanClap has integrated its services with the mobile application of e-commerce platform Snapdeal to tap into the user base of Snapdeal.

According to industry experts, customer acquisition cost too has increased between R1,000-2,000, during the festive period on back of the heavy advertising and discounting. The cost of customer acquisition on regular month is between Rs 500-600, depending on the medium of advertising.

For example, Timesaverz claims to be spending 70% of its annual marketing budget on promoting its services during the festive season. “We will be largely advertising on popular digital destinations including Facebook and Twitter,” said Debadutta Upadhyaya, co-founder and CEO, Timesaverz.

While other start-ups like OTJ247 say having its own in-house team of staff for home services, limited marketing spend has helped in keeping cash-burn under control. Prashant Rai, founder, OTJ247 said that the company is expected to earn revenue of Rs 2 crore in October.

Industry observers opines that home services is largely used by upper middle class who are ready to spend as much as Rs 1,000-3,000 as an one time investment in a year.

EasyFix’s founder Shaifali Agarwal said that their target auidence are working profession with annual income of at least Rs 12 lakh.

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