His first company ShopClues was the fourth unicorn in India. His second start-up, Droom, became India’s 55th unicorn in July, 2021. Yet, SANDEEP AGGARWAL doesn’t call himself a serial entrepreneur, with his focus firmly on Droom and the huge potential that a connected India presents to move the buying and selling of vehicles fully online in future
The first car that Sandeep Aggarwal ever owned was a 118 NE, in 1994. He had bought the used four-year-old dark blue car paying Rs 1.10 lakh to an individual seller in Chandigarh, after seeing a newspaper ad for it. It entailed going along with the seller to a mechanic he knew, for the car to be checked, before he drove it home.
Cut to the present and Droom, the online marketplace for used and new vehicles that he has built, not only lists cars, bikes, buses and a plethora of services surrounding them, but also a couple of aircraft if people care to buy those online! Just as it took the travel industry the last 25 years to move completely online, Aggarwal believes a time will come when vehicles will only be sold and bought through e-commerce. The founder of two start-ups - ShopClues and Droom - that turned unicorn, Aggarwal’s life has been a roller-coaster ride of sorts, and he has dealt with the extreme highs and extreme lows with equal magnanimity. When he started Droom, only 0.1% of the total automobile sales in the country was online. It is now close to 1%. As per Grant Thornton and other industry reports, e-commerce for the automobile sector could grow to 6-7% in the next 5-6 years, says Aggarwal, who sees great opportunity ahead in the space. Over to him to tell his story…
Learning to adapt…
I grew up as the youngest of four siblings, highly pampered, in a happy family scenario in Chandigarh. But my father’s transferable job meant a move to a very small village in Haryana - I would say a blessing in disguise, because there, I first learnt to deal with the unfamiliar and establish my own ecosystem. Be it saying hello, sharing a lunchbox or inviting new people home or visiting them… Much later, when I went to the USA, I had to establish myself in a new place and culture, and I managed.
The ShopClues saga…
When I came back to India after 15 years in Silicon Valley and started ShopClues, I was very gung-ho that it would become one of India’s largest e-commerce platforms, and it did, in the shortest period of time, with the smallest money raised. India may have more than 65 unicorns today, but ShopClues still has a record - it spent only $67 million to become a billion-dollar company. The second company that became a unicorn by spending least money is actually Droom. So, I call myself an asset-light, frugal founder. ShopClues was ahead of its time and an awesome asset. We were doing great, but unfortunately, I was not there to build it and take it to the next level as my life went through its own personal challenges and crises at the time. But that experience made me ready for what I'm doing at Droom. Unless we make a series of stupid mistakes or get unlucky, we have an opportunity to make Droom a world-class asset.
The Droom journey…
I decided to put my neck on the chopping board seven years back, saying that automobiles could be bought online. It is a high touch-and-feel category. It's a big-ticket item you don't buy every day. So, it did not move online that fast. I have worked with three Fortune 100 companies at their headquarters. I am a former Wall Street analyst and entrepreneur. And, I always looked for a large opportunity where technology can play a role, and I can create a very scalable business. I don't like physical centres with people-heavy operations and inventory sitting on your own balance sheet. That’s how we started. Today, our business sits on four value propositions – 1. How can we create a selection of automobiles which physical centres can never offer you
2. Because you are going to buy without seeing it, can we create enough trust for someone to feel comfortable to buy online.
3. Because we don't own the inventory, we have no reason to jack up the prices to make a profit.
4. What other convenience can we add from loan and insurance to delivery? A car can come to your doorstep in a flatbed truck as shown in our #RIPTestDrive campaign. Our challenge is, at what speed can we convince people to move online for a big-ticket item like automobiles. Also, there are legacy business models in our category. We have to deal with fixing the legacy issues of others. True definition of e-commerce for automobiles is what we offer. I believe the world's largest automobile retailer will be a company exactly like ours. So, if we don't do everything on time, our fear is that will we be MySpace while someone else becomes Facebook? We want to be the Facebook of our category.
Case for buying cars online…
When Amazon started 27 years back, they had a challenge… can a human being buy something without holding it, feeling it, touching it, smelling it… because that is how they bought things always… so they started giving product ratings and reviews saying what other people thought about the product. Also, they got a free pass from the US government - for any expensive item people bought online, they would not pay 9% GST. In our case, we are giving you full promise of a great selection, low price and return warranty, and up to Rs 50 lakh buyer protection. Test drives were good when Henry Ford invented the assembly line, and he had to tell people which part was which. In the last 30 years, dealers were saying come to test drive the car, which can go from 0 to 100 kilometres in 7 seconds. But that’s practically impossible. So let’s lower the entry barrier for people to buy online.
Ecosystem needs support…
Since we started until end of September 2021, we have sold 4,00,2000 automobiles on our platform. Currently, we sell around 12,500 automobiles per month on our platform, which will make us India's largest e-commerce B2C platform for automobiles. About 96% are used, and 4% are new. After the severe second wave of COVID, a lot of OEMs have started working with us to offer new vehicles. They really wanted a platform like ours and our services, so that they can sell new cars online. We offer services in 1,100 cities. We also have 21,000 dealers who each month give us close to 3 lakh vehicles supply. The second best in this category will have probably 15,000 vehicles supply. If I had to open 1,100 showrooms with 5 to 10 employees and 3-5 cars in each, I would have gone bankrupt long back.
While the Government is very progressive in terms of building a digital India, e-commerce businesses are burdened with collecting all sorts of taxes. So many countries have given tax rebate or R&D tax credit, or other benefits so that new age businesses can grow, but that is not the case in India. If we want India to become more digital, more support is needed. Amazon did not pay any GST for 17 years!
Avoid getting indigestion…
I'm very proud of how the Indian start-up ecosystem has shaped up in the last 10 years. Today, India has almost $ 300 billion in market cap for new age companies and thousands of investors. But it is starting to get a little bit over-rich. My philosophy has always been that in our modern world, you don't die from hunger, you die from indigestion. A start-up which gets more money than it can deploy at current scale, the excess money leads to indigestion, their biggest enemy, and I see it happening often. Unicorn is just a good tag, a good milestone for a founder. It is not about realization of money. A unicorn based on scale and unit economics and market share, product differentiation and financial numbers supporting the unicorn valuation is more sustainable than just the unicorn tag.
Droom consumes me…
I never wanted to be a serial entrepreneur. But the cards life dealt me made me one. I am deeply compassionate and committed to Droom, just like the 300 other people in the company. Right now, I'm so focused on Droom that I don't see anything beyond it. I am an angel investor, and have done more of it in the last one year than in any year since I made my first ever angel investment in 2008. Droom pretty much consumes me. It is very early days yet for e-commerce for automobiles, comparable to what the travel industry was in 1995. So Droom is a handful, and even if we can do half as good a job as we aspire to do, we can permanently change how people buy automobiles online.
I will write more books…
India can achieve immense glory if we produce many more entrepreneurs. The idea behind my book ‘Fall Again, Rise Again’ was to tell people that if I with my background and challenges could do it, so can they. It's doing its work. Meanwhile, people from OTT production houses did have a few conversations with me about filming the book, but nothing has materialised yet. I will write more books for sure, before I hang up my boots!
ADVICE TO ASPIRING ENTREPRENEURS
Entrepreneurship is never a straight line. Nothing will come on a platter to an entrepreneur. My mantra is, if you have a will, you will eventually find a way. So I say this to entrepreneurs:
Do something that you are passionate about, rather than something which looks very compelling or glamorous on the surface.
Always start the business with a long-term horizon.
Even when you are not asked, always make sure you measure, and have unit economics of your business in full control.
“The earliest signs of entrepreneurship I showed was probably when I was 8 or 9 years old and started trading the stamps and coins I collected for Hot Wheels dinky cars, then a rare thing. I could get them only if some uncle returning from Dubai or Singapore got generous. So I started collecting them, grading them, pricing them and selling the surplus, in exchange for ones I didn't have. I even saw an opportunity to make money there.
Today, my 12-year-old son comes up with a business plan every 3-4 months, because he sees his Dad talking about investors and building companies all the time! Right now, he is into Pokémon cards, and tells me how he can create a trading platform for Pokémon cards. He wants a printer to put grading labels on the cards!”
“I have two boys and I like to spend time with them. I have always been a sportsperson. Every decade, I've seen my passion shifting from one sport to another, but I love squash and golf. I loved to travel before COVID struck. I love reading and writing. I like to spend time where spirituality meets wellness, exploring ancient Indian Ayurveda… As a person, I have always been very passionate, very energetic. I typically don't give up. I take a long-term approach, valuing quality over quantity.”
