Delyver’s Journey in Pioneering the Hyper Local Commerce Market in BangaloreMarch 21, 2014 2014-03-21 11:06
Delyver’s Journey in Pioneering the Hyper Local Commerce Market in Bangalore
Delyver’s Journey in Pioneering the Hyper Local Commerce Market in Bangalore
In the summer 2010, the ecommerce industry was still at a nascent stage. Flipkart had just made its first acquisition(WeRead), Zomato had just broken even, and online restaurant delivery had not yet taken off in entirety. It was also during this summer, that 3 friends decided to set shop with another concept that was new to the Indian market – a hyper local commerce platform called Delyver.
At their disposal they had just 1 bike, 1 phone, and 3 pairs of hands. They had to cater to partners who required deliveries between 6:30 am to midnight every day.
“We were actually really foolish and mad at the same time. We were taking orders day in and day out, we were also doing the deliveries also ourselves. Sometimes on the bike, sometimes in the car, sometimes walking. We did anything and everything needed to run it,” says Praful,co-founder at Delyver, “So we have solid delivery experience,” he jokes.
Four years hence, the company has scaled to six neighbourhoods in Bangalore.
The company has pan-Bangalore plans in the next six months. Their story is that which anyone pioneering a market would be familiar with – of making the very first mistakes in the industry and learning from it.
The Roadtrip That Made Delyver
Afsal Salu, Praful Thachery and Reebu Varghese were batchmates at IIM Lucknow. Even at college, the 3 always wanted to set up their own venture. However, after graduation in 2004, they parted ways to join Wipro, Phillips and Unilever.
Five years later, the three met up and decided to drive down to attend a friend’s wedding in Kerala, their hometown. It was during this road trip which Reebu terms that Delyver took shape.
“Back in campus, we had an idea to take shops to their customers, basically rural customers. We wanted to have a bright orange coloured van, which we would stuff all the items into, deliver in the village and come back. It was a very naive idea, but that’s where we started,” explains Reebu.
Instead, Reebu and Praful switched base to urban Bangalore where Afsal was working. They zeroed in on bike deliveries instead of vans and started off their business in Whitefield. They believed that the IT crowd in Bangalore would give their business leverage.
“When we started it, apart from the zeal and enthusiasm we had little else really. One of us decided to deal with picking up the phone, the other decided to ride the bike and execute the order and the third person decided to add more retailers to the network,” he says.
The company had initially started with deliveries across 5 categories with 8 partners on board in a month and a half. They feel that their initial plan was not well thought out, but they have cracked the code on what customers want along the way.
Certain categories had to be pulled out when they figured that it would not scale. Sometimes a customer from one location wanted deliveries from multiple retailers. They figured a way around this as well.
“The little bit of foolishness we had in our approach help us not get disheartened by any setbacks. We didn’t realise it was a setback. Our families may have, but we didn’t. We just kept going. We follow that principle even today. That’s something that really helped us,” says Reebu.
Delyver is gaining in a field of last mile delivery which has seen shutdowns. Chhotu, a last mile delivery solution for e-commerce shut down in September 2013.
Adding Offline Retailers To the Network
“Back in 2010, the whole online ordering space itself was extremely nascent, Flipkart , Myntra etc, no one was what they are today. So telling a retailer that I will give you orders, generate it online, offline or wherever etc was a completely new and challenging thing. None of these so called restaurant ordering spaces existed,” explains Reebu.
Their first partner was restaurant Northern Wave. Soon they got seven other retailers on board as well. A bit of simple math was all it took to get them on board, says Afsal.
“Anyone who did not have delivery did not know what it constituted, So we used to do the math for them. For doing 300 deliveries a month you will need ‘n’ number of boys, a vehicle which will cost you ‘x’, and spend on fuel for an average of so many kilometres,” narrates Afsal.
Upon calculating the costs, retailers soon figured that the cost of hosting self-delivery would be much higher than just out-sourcing the business to Delyver. This worked just fine for Delyver, whose neighbourhood-centric model gave them good margins.
After starting off in Whitefield, the company soon expanded to 4 other neighbourhoods in Bangalore. Along the way, they iterated on their operations side multiple times. They feel that their current customer base is drastically different from what they had started with. They now have different customer bases, different retailers split across multiple categories apart from restaurants.
Delyver says that compared to e-commerce companies, their entire order needs to be fulfilled within 60 minutes. Split across, this means 20 minutes to pick up an order, and another 40 minutes to deliver it.
“The skills required, the knowledge required to build that is extremely different. We had to learn it bit by bit, figure out what is required. In 4 years, we learnt to deliver from further distances, sometimes to two or more retailers at once. We have iterated on what shift timings work, what cannot, and what models work,” says Reebu.
The company made their first hire, a delivery executive within the first few months of starting up. The hire via a referral did not realise that his job would require him to do the actual deliveries on the ground. But seeing that the founders participation, he joined in wholeheartedly, says Praful.
The company also hired their workforce at the call-centre to take orders thereafter. This went from 1 to the current 20 member strong team.
Delyver’s Lessons Learnt
From working fixed hours, at fixed salaries, for a fixed number of days to the exact opposite, the founders of Delyver had quite a few lessons to learn. One among these were to admit their mistakes.
Customer is King
“For the first 3 years, and even today, if a customer comes in with an issue, one of us personally calls them and apologise. They may be angry at first, but they always come back to do business with us,” says Reebu, “Sometimes nothing can be done, so you just have to stand up and tell the customer that – boss this went wrong and we’re sorry. They appreciate it,” he adds
No retailer has left Delyver’s network unless they shut down shop themselves.
Journey to Profitability: Must be Slow, Steady & Where you Learn
“Being a scalable business, there were certain metrics the business measured itself on. At each point you have measure the metrics and see if you have done justice to it. So where we stand now is that we are quite close to where we want to get – which is profitability at the apt stage,” says Afsal.
Dealing With Holidays
“While starting up, in a business like ours you will need to work on public holidays. Now employees will want an off then, understandably. So what do you do? You just roll up your sleeves and get on with it. Till you reach a certain scale you can’t do anything about it,” says Reebu.
The Thing About Scaling
One of the biggest areas where Delyver’s founders gained perspective was in scaling. To paraphrase their ideology, there are no shortcuts to success when you create a market. Their advice is to “stick with the punches” and see your company through no matter how tough it gets.
“If we went back to do this again, one thing we would rethink is embracing technology faster, and having sufficient capital. We kept dipping into our savings throughout. We started with Rs 1 lakh bootstrapped,” says Praful.
To help matters, in 2012, they received angel funding from serial entreprenuer K Ganesh. Currently, they feel that they are funded well enough to continue to scale.
Delyver says they are way past operational challenges now.
Delyver has started a new service which partners with deliveries for home chefs. From their base of 8, they have now branched out to 250 retailers with 300 outlets on board. In their pan-Bangalore aspiration, they seek to set up self-sufficient, central order booking and delivery facilities in each neighbourhood.