E-commerce in India is already getting crowded and a recent Assocham report stated that e-commerce in India is likely to be worth $ 38 billion translating to roughly Rs 2,51,720 crores by this year. With biggies like Amazon, Flipkart and Snapdeal, there sure needs to an alluring factor to attract customers. Znatta, a Bangalore-based startup managed by an IITian trio are trying to add value proposition with ‘Try before you buy’ feature with its e-commerce platform, similar to the Y Combinator-backed Lumoid. This three-week old startup has already completed over 70 trials, with 6 converting into sales.
“We’ve had 70+ orders since our launch, and we just expanded our Portfolio to Virtual Reality, Drones and Life Loggers and we expect to see a spike in our Trials model,” said Surenedranth Adireddi, B Tech from IIT Madras and an ex-eBay Analytic Manager.
The product listings include smartwatches, GoPro and other cameras, fitness trackers, VR headsets, drones and other cool robotic stuff. The site also lets you add product reviews. Znatta has teamed up with over 35 OEMs, resellers, and is working at increasing the number. Currently, only active in Bangalore, it plans to add Pune to the list soon.
Znatta is quite a unique name and co-founder Harsha Korasala, an IIM Indore alumnus tells us, “Znatta is named after the catalyst “Zeigler Natta” which breaks the double bond of the cyclic carbon compounds. And in principal, that’s exactly what we are trying to do with the consumer electronics segment.”
Znatta currently has listed about 15 products, with a one-week trial option for a nominal sum. If the user likes the product and decides to make a purchase than a new device is shipped with a certain discount. Now, the trial period involves a price, which users have to let go in case they decide not to buy the product. It also serves as a great way to rent GoPro or a VR headset for a week. However, in case of damage to the product, the startup will take a call depending upon the extent of the damage caused.
From the looks of it, Znatta seems to be aiming at the newer , upcoming product categories such as fitness trackers, for which, simply reading reviews may not be enough. “Our future plan for Znatta is to be a one-stop-shop for all gadgets. We see a big demand in the Wearables, VR and Drones segment, and by March last week there shall be drones and VR Wearables available for trials on Znatta,” Korasala adds.
We keep hearing about various e-commerce frauds, and giving a product (sourced from resellers and OEMs) for trial could make it even more vulnerable. But, Korasala says the team conducts a Social Score indexing when a customer orders and also make the user sign in-person a customized T&C (single copy) that the user gets back when he returns the product. He believes that these products are pretty niche, unlike smartphones, which gives the possibility of stealing components.
“We thought we would have a lot of damage or theft cases when we started this, but surprisingly we haven’t encountered a single scenario where this had happened,”he adds. The company has had 70 plus orders so far, without any instances of theft. But whether or not the plan is sustainable in this respect is still a big question mark.
To widen the consumer reach, Znatta is looking to tie-up with gyms, running clubs, gamer networks and trekking communities. It is already working with Fitternity and some local photography studios. The sales have been via word of mouth, but it does have a marketing plan in place. “We have some direct marketing campaigns lined up,” adds Samdhathri Dontaraju, an IIM Indore alumnus and an ex-Accenture R&D.
The startup is making money by charging 5-6 percent of the weekly trial to the customer and also gets a cut from the new products sold. “At Znatta, we divide our inventory into three brackets – New, as good as new, and used. For sale of new products, we take a cut of 4-5% from the reseller of the products.The “as good as new” products are discounted @ 20% – 30%. Used products are discounted @ 50%-60%,” adds Samdhathri. The startup is also looking for funding, and is already in talks with a bunch of VCs.