Free Press Journal

Rasoishop: Niche Omni-channel Retailing in Quality Kitchenware

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Today we speak to Maitreyi Jain (MJ) the Founder of Rasoishop and Anil Kumar Jain (AKJ) the Business Mentor of Rasoishop and her father. Rasoishop.com is a virtual kitchen mega mall and one stop destination for buying kitchenware online in India. Being exclusively a kitchen merchandise store, Rasoishop focuses on the three aspects: premium products, honest prices and free home delivery. Rasoishop offers complete integration of Internet, TV, Brick and Mortar, Phone and Print mediums to the consumer.

Q: How did this venture start and what was your association with it?

MJ: My dad is a first generation entrepreneur. He has been the Softel brand owner and we have been into manufacturing for the past twenty years. I was studying in Bangalore, which was already buzzing about e-commerce and when I finished my CA, I was not willing to do a 9 to 5 job. So when I came in, we thought, why not start an e-commerce platform for our business venture? E-commerce is the next step for any traditional business to go forward. Our aim was to become an overall megastore for all the branded kitchen equipment players – to become the face of the kitchen in India. That was the idea because there are so many things that go into the kitchenware category, not only appliances but cookware, bakeware, et all. That’s how we launched Rasoishop.


Q: So is kitchenware the category that you would continue to focus upon?

MJ: Yes, because everybody is a very horizontal player, nobody is specifically niche, with a focus on the kitchen. However, kitchenware is one category where every household will be my customer; there is potential for a lot of growth.

Q: How did you conclude that there are other brands who would like your team to front end for them?

MJ: As brand owners of Softel, we were often faced with trade issues, like how to push products online as everybody is moving online. However, no one guarantees you sales. Here we give them branding as well as sales. Branding in itself is a function. Like showcasing your product on television, is very costly; small players cannot afford that. That’s where we come in and we say: you give us your best product and we will sell it for you including providing branding. A lot of SME’s come to us for this dual benefit.

AKJ: They are often good manufacturers, with good quality products at optimum prices but do not know how to market themselves. This industry is full of such players who are relatively smaller players and hence do not have the marketing muscle.

Q: Within kitchenware, what are the variety of categories you offer?

MJ: Small and big appliances, cookware, bakeware, trays, glasses, cutlery, kitchen linen, etc. We also provide cookbooks.

AKJ: We want to engage the consumer in terms of cooking, so whatever is required to get them to talk about cooking.

Q: In your opinion what’s the potential of this market in terms of size?

MJ: Potentially, we can target any household irrespective of their economic or social status, as everybody needs a kitchen in their home. Also there are not too many organised players, the ones which are there are horizontal players like the big online stores, so us positioning ourselves as niche players of kitchenware will get us more traction, focus, and we will be able to connect more with consumers. We can listen to their needs and requirements. Housewives are our connect in this category as A) it’s not organised, and B) once you engage with the housewife she would want to come back to you again.

AKJ: Our estimate is that there are 1 lakh SKU’s which can go into a kitchen. Considering everything; from a pin to the biggest appliance that is used in a kitchen.

Q: What is the percentage of sales from 3rd party brands and your own brands?

MJ: Rasoishop is a platform for all the brands, so right now Softel is just one more brand on Rasoishop.

AKJ: We treat each brand depending on its potential to sell. Rasoishop is a shop brand and the others are products which will continue to get focus depending on their saleability on our platform, irrespective of who owns the platform, including us.

Q: How do you approach merchandising?

MJ: We decide on which SKU’s to choose from the brands, we decide how to price it for our customers and then we negotiate depending on our cost structure and arrive at a target price. If the brand supplies to us at that target price we take the product/brand further.

Q: With regards to customer support for products that have manufacturing problems, how do deal with these issues?

MJ: In the Tier-1 cities the brands themselves try and solve the issues. In Tier-2 cities if the brands are unable to solve the problem then Rasoishop comes into the picture. We have a tie-up with a services partner with more than 250 service centres across the country; they help with our after sales service. The first point of contact is us, and then we route the complaints to the respective brands or to the service partner.

AKJ: As a policy we encourage customers to call us, and our call centre then manages the back end. They ensure that the required service is provided.

Q: Broadly, what are the return rates?

AKJ: We are at 10 to 12% returns, which in our industry is considered low. Typically, returns are around 25 to 30%. This is because we have a two-tier process in terms of convincing the customer. Our films are very clear and detailed. When there is a call we receive it. Then there is a verification call, which is independent. Only after verification do we treat it as a confirmed order. The 10 to 12% return rates are also typically due to customers not being home etc…

Q: Can you elaborate on how you work with and appoint Tele Distributors?

AKJ: Tele Distributors are basically our delivery agents. To become a Tele Distributor with us, one needs to invest 5 lakh in our stock. To begin with we give him certain fast moving items which we know are running on the channel. He can store these products at home or in some small office space. He can operate from any non-commercial property, there is no problem. This is valid for products run on television channels. They are given access to our software by which they can download the orders in their city and directly deliver to the customer. This serves two purposes: 1) quick deliveries to the customer 2) returns don’t bother us, as the product will go back into his stock.

This is an off shoot of trade distribution; network marketing also uses a similar model. We are currently at 85 distributors, but we want to take this number to 500. It is very easy to scale up as with a very small capital of 3 to 5 lakhs you are getting a business. We are creating small entrepreneurs without much marketing and buying risk.

MJ: Finally, they have the opportunity to grow and develop into a shop; they can rent a space. Stock they already have, so we can quickly have 500 Rasoishops.

Q: What are the customer trends you see?

MJ: It’s definitely very housewife-centric. It’s also a price-sensitive market. Average ticket size at least on television is Rs 2000. But the underlying principal is value for money. It is 100% recession proof. A lot of gifting and word of mouth is seen in this category. In fact, corporate gifting is a big subcategory.

Q: Any initiatives being planned in the next 2 to 24 months?

MJ: One of the interesting aspects would be how to synergise online blogging, online recipe sharing, and online traffic to rasoishop.com and how to pitch relevant products to customers. We have a lot of brands who want to join us. 30 are on board and we are in talks with 25. We have tested the business model so the thing that remains is how we can take it to the next level. For that we can get more mediums, reach out to more consumers, reach out online, reach out through business agents, etc.

AKJ: We are focusing on the TV and online mediums. At the consumer end we are strengthening the distribution network. We have distributed catalogues to our existing customers, followed by database marketing. This has helped us get almost 11 repeat orders per customer, the retention ratio and re-ordering value is high. So online is important because we want to showcase the width of our product lines and the products which are not on television. Also for any time viewing, as all our videos are also present online.

Q: What is it that you are looking at in the days to come?

MJ: The potential in this industry or sector is huge so we are aiming to achieve 400 to 500 Cr in two years which is quite possible with the proper amount of funding. If one says VC’s look at disruptive businesses then this is definitely disruptive as there is no organised retail in this category.. This can be a very disruptive model as we are engaging housewives who will be potential customers for life. This is an innovative concept of addressing and taking into consideration both online & offline. There is a lot of opportunity for customisation, which will lead to high growth possibilities for us.

AKJ: And building a community around one unique need: cooking. So this becomes a central theme around which we are building the online community.

Q: Who are your competitors?

AKJ: In the unorganised sector, they are the bartanwala shops, in the organised sector it would be the organised retail outlets like Croma and Big Bazaar. Typically, we feel that if a housewife wants a specific brand then brand shops could be considered competition to an extent. However, if this housewife wants to see some other SKU’s before buying then she has limited choice.

For this particular category, in organised retail, there is not much competition as they have many other categories to cater to. Especially in Tier 2, 3 & 4 cities, where distribution is not strong, we hardly find any competition.

Q: What are the milestones that you have passed in your journey?

MJ: It’s been a year since we started. We have 30 brands on board already, with over 20 to 25 films on air. We are in the process of continuously expanding the media channels. We have crossed the 1 lakh plus customers mark. Since we started, a GMV of 20 Cr has been achieved. Our distributor arm of the business is also strong. We have 85 distributors across India. We have supplied to around 2000 towns & cities in India.

Q: Any numbers on the funds the Rasoishop team is planning to raise?

AKJ: We have identified around 25 Cr which needs to be raised in the first round. Dilution will depend upon the valuation. Even ramping up within 2 or 3 years is a function of how much money is invested. This business has sufficient margins; profitability is easy to achieve unlike other e-commerce initiatives. On the supply side, the industry size is big, almost 1,50,000 Cr and is fragmented, which again is an opportunity. Here we are only referring to cookware, small appliances, servingware, etc. which are relevant to our category focus. Growth in this category is around 25%.