Despite funding increasingly drying up for startups and large e-commerce players facing mounting losses, online shopping continues to hold its sway over Indian customers. Amazon India’s CEO Amit Agarwal recently said that he is not shy of selling ‘churan’ and ‘hing’ online, but customers have become equally comfortable buying high-value items such as air conditioners, refrigerators and furniture online. Serial entrepreneur Jawad Ayaz decided to translate this opportunity into business for CapriCoast.com, an online modular furnishing solutions provider.
Ayaz launched CapriCoast in 2015 with the aim of making purchases of modular furnishing hassle-free. According to the founder, opportunity in the modular furnishing market is immense due to the massive price variations across modular furnishing products. With CapriCoast, he seeks to address issues related to poor quality of products and delay in completion of the project. He claims that CapriCoast is committed to ensure timely completion of projects for better customer experience.
He defines CapriCoast as a marketplace for modular furnishing solutions, thus making it different from an e-commerce company selling products. Instead of selling off-the-shelf products, CapriCoast is building customised solutions for its clients, through its partners or sellers. Its online-to-offline (O2O) model allows the sellers to access a wider customer base with online cataloging and customers can explore the designs online and experience the same at the offline outlets of the seller.
“We have a bunch of partners (sellers) who bring in their different attributes. We list their attributes and add them to our database,” explains Jidesh Haridas, COO of CapriCoast. “We take the requirements of the customer and match them with partners taking into account their bandwidth.”
CapriCoast has about 100 partners on board and more than 50 of them are in Bengaluru. By end of 2017, it plans to have about 300 partners listed on its database. “We do location specific optimisation to minimise travel and handle bandwidth of the partner which is fairly dynamic,” Haridas adds.
Along with a ground staff of 20 people who physically meet the customer, CapriCoast has a strong tech team of about 25 people stationed at its Bengaluru office. By March 2017, CapriCoast expects to expand its business to key metros.
“We expect to have business units of 15-20 people each in NCR-Delhi, Chennai and Hyderabad by March,” says Haridas.
The big-ticket transactions allows the company to maintain healthy margins. Ayaz pegs the average ticket size of each sale at R5 lakh with CapriCoast earning a commission of 15-25% on every sale. The average transaction size is expected to reach R8 lakh by FY18.
Moreover, the company has achieved operational break-even on its home turf—Bengaluru. Says Haridas: “If the macro environment remains the same and profitability become important than expansion then we can be profitable in 1.5-2 years from now, but if we focus more on expansion, profitability may take longer.”
Since inception in 2015, the company has fulfilled about 500 projects. Haridas explains that each project takes a minimum of three months to complete, from the time of receiving customer requirement till the handover. The company is targetting gross merchandise value run-rate of $35 million annually by FY18.
On the expenses front, CapriCoast is low on marketing spends but is making big investments on the tech side of the business. “The customer acquisition cost for us is less than 10% of the revenue we make per customer as commission. We will invest the additional funding in technology and expansion to other cities,” Ayaz adds.
Capricoast has raised $ 4.75 million till date. In April 2015, the company raised $ 1.25 million in seed funding from Accel Partners and eight months later, it raised $3.5 million in Series A funding from Accel and RB Investments. The Series A funding was deployed largely towards technology and fresh hiring.