Group buying start-up GoBillion wants to encourage small Indian towns to shop and save together
Roshan Farhan, who grew up in Guwahati, saw firsthand how small towns think about online shopping.
âEven today, if I tell my parents or their friends to buy from online marketplaces, they won’t. Despite the fact that they see me shopping online. There is a trust deficit, âsays Roshan.
But these small towns spread across India represent a large underserved market and a huge opportunity. The one Roshan decided to exploit with his best friend Kulapradip Bharali.
Together, the two Delhi-based co-founders, which aims to make online shopping an “interactive and fun” experience. The group buying start-up, which started with an initial investment of Rs 5 lakh, operates on a model that encourages consumers to buy together and receive discounts based on their aggregate purchase quantity.
The co-founders believe India, which now has more than 800 million internet users, is ripe for a disruption in the group buying section.
Roshan says digital adoption has reached even the smallest of cities in the country and believes that when people see others ordering online, they’re ready to do it themselves.
âThis is what worked for us. When people share deals with their friends through WhatsApp which will give them discounts, they are fully involved. It then becomes a game for them, âhe says.
After the idea came to them in 2020, the core team decided to pilot the app in Guwahati.
âWe started with small towns because the eastern part of India is still quite underserved when it comes to e-commerce. And, if something works in a small town, it’s more likely to work in big cities, âsays Roshan.
GoBillion’s 20-member team seeks to expand services in eastern states including Bihar and Odissa
The app was officially launched in February 2021, after a successful test, started offering daily essentials including products like Aashirwad Atta and Lizol which have higher brand recall, to attract more users.
The startup also sells local brands, where they give higher discounts, as well as other categories. He chose to stay away from fresh and perishable products “Because that will make storage a bit tricky” due to the need for cold storage facilities and the emphasis on shelf life.
Roshan claims that the transactions were up 107% month over month on the platform since its launch in February 2021.
The platform managed by Gobillion Inc recorded more than 30,000 transactions with an average basket of Rs 650.
It’s backed by Y Combinator, a Silicon Valley-based startup accelerator, which invested in home rental company Airbnb, and food delivery aggregator DoorDash, during their start-up phase.
The platform also raised an undisclosed amount from Shanti Mohan of LetsVenture, Vikalp Sahani, co-founder of Goibibo, and Harsh Pokharna, founder of the fintech platform OkCredit, among others.
How group buying helps
On GoBillion, group buying occurs when a consumer finds a particular deal and shares it with their network of contacts, primarily through the WhatsApp messaging app. If another person joins the deal, the price of that particular item goes down. It continues to decrease as more and more people join the case.
As of now, one person can get a maximum of four people on a particular offer. But that number will reach at least six or seven in the coming months.
âThe concept is still new in India. Once there is more confidence in this system, we will increase the group limit, âsaid Roshan.
Group buying has been successful in other parts of the world, especially China.
Six-year-old Pinduoduo is this model’s greatest achievement. The Shanghai-based app connects farmers and distributors directly with customers, who participate in group buying and receive huge discounts.
The idea is simple: Regardless of the price of the product, if you can get more people to buy, you and everyone else involved in the transaction gets a discount. The larger the team size, the larger the discount.
âDue to the accelerated pace of the Internet, more and more people are accessing the platform. But the habit hasn’t been taken yet, âsays Roshan.
Credit: YourStory Design
The 20-member team is also in talks with NestlÃ©, ITC and Pepsico to sell their products and is also looking to add fashion, clothing and electronics categories. The delivery staff is made up of 10 members. While 95% of inventory is from brands and other sellers, Udaan provides 2-3% of essentials.
Group buying is still an emerging category in India. With big guys like Grofers, Bigbasket, and a few other local digital sellers falling into the daily essentials category, GoBillion still has a long way to go before it can capture a larger share of the market.
But with as many as 400 million likely customers in Tier I-IV towns and villages across India, the market is huge.
The founders believe they are up to the task. Over the next two years, the company plans to expand aggressively by “penetrating more than 200 cities in Bengal, Orissa, Madhya Pradesh and Bihar”.