After shutting down its laundry service in March this year, home-services start-up UrbanClap Technologies is focussing on providing premium services such as beauty, fitness, tuition, among others.
“With a higher ticket size ranging from Rs 1,000-Rs 1,500 in case of beauty services and going up to Rs 30,000-Rs 40,000 for services like wedding photography, premium jobs allow us to earn more money due to better margins. In case of premium services we earn 15-20% margin,” says Abhiraj Bhal, co-founder, UrbanClap.
Bahl adds that with a higher repeat rate, premium orders allows the company to earn more money from the same customer.
On an average UrbanClap claims to generate business (GMV) worth Rs 1.5 crore every day. This it does by clocking about 5,000 orders per day, with an average order value of Rs 3,000. Of this 15-20% of the orders are for beauty services, where the company claims to earn a 15-20% margin.
Thus from beauty services alone, UrbanClap claims to earn commissioned revenue of Rs 5.6 lakh – Rs 7.5 lakh.
With a 65% repeat rate of orders, according to Bhal the move has helped the company control its loses. “Our monthly losses have shrunk over the last one year with the rate of burn reducing by 25%, while revenue has increased almost by 10 times,” explains Bhal.
Interestingly, the company claims that to have brought down its cost of customer acquisition by 40% to R400-500 per new customer, this year.
However, the start-up continues to provide repair services including plumbers, electricians, and other technicians. Bhall calls it a necessary evil, as despite being a low ticket size job, the order numbers are higher compared to premium service.
According to the company, in case of repairs like plumbing the ticket size is as low as Rs 200 where it about Rs 40-50 as commission. Moreover, the start-up earns Rs 100-150 as commission from appliance repair, where the average order order value is Rs 500-1000.