In our series on Company Feature, today we are showcasing Kobster.com. Kobster is the new kid on the block and aims to be one stop shop for all stationery and office supply needs. Devendra Singh of RetailBiz had a one on one with Vineet Neeraj who is the co-founder of the company.

Brief us on the background of your team

There are 3 of us in the founding team. Karthik and Mohan have about 3 years’ experience in tech companies, and I have startup and tech experience. We are batch mates and wanted to start a company together. We have all the required technical and marketing experience amongst us to support our venture. We also have Achal and Senthil holding key responsibilities in the organization.

Tell me how you decided to do business and what kind of challenges you faced during initial days

I had a bend towards entrepreneurship and my exposure to some of my mentors during my college days got me excited about entrepreneurship. After my engineering and gaining 3 years’ experience in corporate world, I decided it was right time to start a venture of my own. My friends supported the idea and were ready to join me for this. We researched various business ideas and finally zeroed on online retail for office supplies; keeping in mind the potential of growth of online retail in India and figuring out that stationery and office supplies space is still nascent.

The biggest challenge was to convince the suppliers as we had budget limitation and it was not possible to have in-house inventory. Also customer complaints on some delivery delays and heavy cost of COD were some other major challenges initially.

Tell us about your funding and budgeting

We are a self-funded company, with budget of about 10 lac to support our operations for the first year. In future, we may also look for external funding.

For the first year we have planned a total investment of Rs. 10 lac dividing it as below:

  • Technology – 1-2 lac
  • HR, shipping, logistics – 3 lac
  • Procurement and Inventory – 2-3 lac
  • Technology – 2 lac

How are your current operations going?

We only hold inventory for fast moving items and rest is procured as order comes. Going forward, we are planning to have warehouses in all major cities and will hold more inventory. Because of the low volumes, we are able to manage with inbuilt CRM and Accounting capabilities of prestashop and some Excel. We will need them as we grow. We have two channels for customer support – telephone and chat. For chat, if we don’t attend our customer quickly, they will be lost to competition, so we have to be really ON it. We also need to respond efficiently on what customers are asking.

What are your payment mechanisms? What is the preferred payment mode of your customer?

We support all possible payment options such as COD, Net banking, RTGS, cheque/DD option. We are using EBS as our payment gateway and quite satisfied with the services but in future may look for integration with other services providers as all the banks are not integrated with EBS.

COD is in demand and covers 50-60% of our orders. Minimum purchase for COD at this moment is Rs. 500, our thinking is to give some attractive offer to promote other online payments.

Which shopping cart technology you are using and why?

We evaluated a few good carts available in market like Magento , OpenCart and Prestashop and then decided to go with Prestashop based on the richness of features compared to other, as per our business requirement. Since this is open source and one of our co-founders is techie so it was a huge saving on cost part.

Tell us about your marketing strategy

As we are into B2B (office supplies) as well as B2C (stationery) marketplace, our marketing strategy covers both online and offline. In online marketing, we believe more on organic traffic so we are working hard on SEO. Even though this will take longer time to show results, it will be long lasting. For offline, we are going to use all the standard ways of reaching businesses.

We have a loyalty program where you accumulate points on your purchase and redeem them later. We have same program for both businesses and customers and also we have bulk discount for business.

What differentiate you from your competitors?

Our major differentiator is depth of our product catalogue, we have more than 1200 products just within 1 month of launch and will go for 3000+ by end of 6 months. Our other major differentiator is extended customer support hours which is 9:00 AM to 9:00 PM. We also give bulk discounts to corporate.

How is the business doing now? How do you see your business grow in next 2 years?

Till now we have planned a visibility of 6-8 months and we see our self in this manner. B2C should be 300-400 orders a day, and B2B should have coverage of 2-3 cities and addition of some 15-20 corporate client every month. For B2C, typical order value will be of 700-800 INR and for corporates it will be 20-30 K.

Any other things you want to share with us?

I would suggest to upcoming business that it takes significant time (typically 3-4 months) to get all paperwork done for running a business so you should start sooner rather than later to get them done at least a month before the launch. This will help you in many ways like getting merchant account from bank for your payment gateway. I would also suggest having in-house team of technical expertise as this will bring down cost. As a general rule, build up a good team of complementary skill set. This is very critical for any startup.