The Exchanges

Q Uh, and, uh, what were the metrics at that point in time that you figured out in 2017, 2018, that Shiprocket is the platform that you want to focus on or build?

A Yeah, I think it was, it was pretty crazy. You know, now that I think about it, uh, we were seeing CACs like we had never seen before. We were seeing self-service sign up, you know, almost like almost 70, 80% of the merchants, they were coming in, signing up, putting their address, uh, paying money into a wallet without a single human intervention, right? It was all happening in a few hours of them exploring the platform. And Uh, we always thought this was stuff that was available. I mean, that was, uh, you know, uh, visible only in the U S where the merchants were more evolved, but we were, we were, we were amazed to see that happening on the platform and in such a seamless manner, you know, our leads were converting at 25%, 20%, uh, again, unheard of in a B to B business. And, and to be fair, you know, we weren't really a traditional B to B software business. This was more of a B to very small B Kind of a kind of a model. So some level of consumer, uh, influence in the product, in the funnels, you know, in the behavior as well. Uh, but still, those are the kind of numbers that that were just jaw dropping for us. Uh, retention was another big one, right? Uh, in terms of, uh, uh, you know, volume retention or transaction retention, uh, that was again, something we had never seen. It was north of 150%, you know, uh, right. As early as like the sixth month, uh, into, into the coh…

AI assessment note: “we were seeing CACs like we had never seen before... self-service sign up”

Q your buy now, uh, button and on the backend, uh, they are able to select, you know, uh, uh, which, uh, Korea or, or which, uh, delivery partner, uh, they can go ahead with ship rocket. And, and then you take care of everything between the merchant and the consumer, the, the tracking part, Notification for the consumer, right? So, so this is the tech layer which you have built.

A That's right. So the, the buy button is, is still sort of, you know, is under beta and we're trying various models there. Really today, the way it works is, you know, once the order is done, right, we'll integrate into folks like Shopify, Magento, you know, other ERPs like Unicommerce, et cetera, and we'll pull in, uh, whatever order information, uh, the merchants are generating there to give it to them in a single dashboard. It's a self-serve. You can come and connect your channel. Or a large part of our, almost 40% of our volume of our transactions actually punched in by hand, right? So there's a lot of social commerce, unstructured commerce going on, uh, you know, so players like Misho obviously are trying to capture some of that on their platform, but there's still so much happening on social channels that, uh, you know, people, we, we're, we're like the app of, you know, the hour in many ways for them to be able to help them Um, process those orders, collect cash on delivery, or whatever it is. So regardless of where they generate the order, it'll, it'll reach our OMS, our order management system, from post which the merchant can then allocate various carriers, you know, uh, they can see quality metrics, they can see pricing, uh, we'll print sort of compatible labels, you know, we'll let them generate the pickup, we'll ensure the ops are working, we'll ensure the pickups a…

AI assessment note: “That's right. So the, the buy button is, is still sort of”

Q But, but how do you do that? Because like at such a scale that you operate in, uh, many things are breaking on a daily basis. So as founders, how do you dedicate your energies to fixing those things as well as, you know, then spending time towards building the processes for the future?

A Yeah, I think it, it has to be done with a team. It's impossible, uh, for one person or a team of founders even, uh, to do this, you know, till about Year and a half ago, we were primarily a founder led, you know, and operated company where we were saying, oh, we'll, Fix the present, clean the past, and dream the future, and do pilots of the future, and build the future, and we will be HR, and everything else, right? And then you realize that you just can't. I mean, it's as simple as that. So, you know, we invested in a rock solid leadership team that sort of, uh, come on board. We already had great people working with us. We just sort of augmented that even more, uh, to bring in newer leaders, more experienced than us, uh, you know, leaders who understand the market, Better than us, you know, who have seen scale much more than us, and we are learning from them. You know, they are helping us kind of shape up into what we should look like. Uh, if we are to achieve the kind of goals that we are setting for ourselves. So, um, I think it's a, it's a constant learning, to be honest, you know, it's a constant, uh, act of deciding what you are not going to do. It's a constant act of prioritizing, uh, focusing really hard on actual outcomes and not sort of, you know, what you feel like doing. So I think, I think that's sort of the, uh, the big insight, personal insight, you know, if, i…

AI assessment note: “it has to be done with a team. It's impossible for one person”

Q Uh, that, that's quite, quite a journey because, uh, People want to add as they are building more stuff. You, you, you reduce during your, your journey. What helped bring such focus?

A Um, yeah, I think we started realizing that, you know, uh, you know, sometimes as founders, we want to go after really large market sizes, you know, and, um, and we should, but the, the, the problem with that is larger the market size, uh, at the given time. The more people are there, they're going to be, right? I mean, if we built a B to C marketplace in 20, 15, 16. I mean, it, it was a really hard journey, right? Uh, would have been a very hard journey to sustain that, uh, with, with so many big folks around. So I think we started understanding that we need to find something which merchants really ask for, as opposed to us having to push it to them. Right. Uh, and that clarity, you know, and it's a sort of an overused phrase, but, uh, one of my investors basically would keep saying, are you a vitamin or you're a painkiller? Um, and it was, it, it really, really struck a chord because as we started analyzing our business, we started realizing that this part of what we've built is, is actually valuable. Now, it may be valuable to a very small sliver of the market today. But at least there we'll get to kind of win as opposed to, you know, being like a small fish in a really big pond where you can just get eaten. Uh, so I think it, there was no eureka moment as such. I think it was a series of, uh, things that didn't work. You know, we, uh, would try and benchmark our product mar…

AI assessment note: “one of my investors basically would keep saying, are you a vitamin or you're a painkiller?”

Q And how did you get Dipender Goyal interested in the business?

A Yeah, so InfoEdge came in right in the July round. So they got us to kind of, uh, meet with him and, you know, we were anyway, uh, you know, we didn't have a very good reliable logistics. I mean, hyperlocal logistics partner yet. So we just out of a brainstorm kept thinking that, well, they've got such a great fleet. You know, they have hundreds of thousands of riders. Uh, why couldn't we use them? Uh, and obviously initially their view was, look, we are not in the logistics business. That's not our job. Happy to, you know, guide you and, and, you know, uh, DP put in an angel check at that time just to, just so we could be in touch and then post that as we started raising around, you know, and then I think things just transpired, you know, they just sort of one thing led to another. And, uh, they said like, we're, we're happy taking a position in the company as well. And, you know, we'll help you as financial investors, but we'll also help you as operators. And then finally, you know, we, we do run, uh, an hyperlocal fleet. Maybe we can, You know, add some value there. I think it, we just, we love the team there, and I think it was an instant click for us again. So I think for us, we, we, we're a, we're a gut based, uh, operator. You know, we don't, we, we don't over optimize too much of this because I think our historical learning has been that, uh, you know, if it feels right…

AI assessment note: “InfoEdge came in right in the July round. So they got us to kind of, uh, meet with him”

Q And if you can please share, right, some, some key metrics today of, of Shiprocket, that how many D to C brands use Shiprocket, or overall, how does the ecosystem look like? What is the, you know, GMV that is getting translated? What is your revenue in that?

A So, uh, see the overall market is probably maybe 70, eighty billion, maybe all of e-commerce put together, uh, in India. And again, this is just an estimate could be plus minus, you know, 10% here and there, um, from this overall market, you know, if you break it up into, let's say only two verticals, let's call one vertical, all horizontals. Right. So Amazon Flipkart, you know, uh, let's put Nike also there. Let's put all of those guys there, which are like full, full stack platforms. Uh, let's put all the big verticals also. Let's put all the horizontals, all the big verticals, let's put them in one place. Um, and what's left is basically all the direct commerce, right? And direct commerce is, you know, it's not all D to C, right? D to C is, is sort of another cut on this, on this market size. But it's all direct commerce, which is everybody else, uh, who's doing transactions between, I mean, uh, between themselves and the, and the consumer. It could be a very small one person business running only on WhatsApp all the way to large brands like Samsung, you know, who are trying to build an omni-channel, uh, business directly as well. I mean, the same folks are selling on all channels. So that's the other thing I want to clarify where many of my merchants, the larger ones will sell on Amazon, Flipkart, and other places. Because that's another channel, but they also want to have …

AI assessment note: “overall market is probably maybe 70, eighty billion, maybe all of e-commerce put together”