Earlier in the day we shared how social media is influencing online buying behaviour of urban Indians. According to the Frost & Sullivan Report, above 60 percent of urban internet users in urban India spend four hours and more a day browsing for various purposes like entertainment, networking, business, academics, shopping, etc. Consumers are increasingly relying on social media to make their purchases, either as informed choices, or through peer conditioning.
Definitely a booster for startups like Baggout which is making the online buying behaviour process simple by adding a social layer for users, and as for eCommerce portals it means more customers at their door steps.
The startup that we had reviewed recently is right now a team of two childhood buddies – Deepak Jain and Prashant Mahajan. Deepak, who is responsible at the business end, is an alumnus of IIM Ahmedabad & IIT Roorkee and Prashant, the geek is an alumnus of GGSIPU and has prior experience of starting up at Harvard Business School.
I had a chance to catch up with the young startup to know more about the story of Baggout, how has the experience been so far, the present set of challenges and how do they see the social curation market right now in India. Below are the edited excerpts of the email conversation that I had with Deepak.
Prasant Naidu: What led you start Baggout, tell us the story behind it.
Deepak Jain: We got the idea to start up Baggout while waiting at the billing counter at Shoppers’ Stop. The original idea was that Shoppers’ Stop customers would be asked to share their purchases with friends on Baggout and would be given a discount/cashback for the same. The idea originated from the fact that people base their buying decisions on reviews/opinions/discoveries of friends & family and word of mouth marketing is the best form of marketing for any business.
We, then, conducted some primary research by distributing questionnaire to shoppers in various malls and by conducting in-depth interviews of over 100 shoppers. The general opinion that we got out of the surveys/interviews was that uploading offline purchases would take a lot of effort while doing same for online purchases would be much easier (as simple as clicking a button). We, therefore, embarked on the journey of Baggout starting with online purchases sharing.
PN: Going further would you evolve from a social curation to a social commerce product? What gaps do you find in the market that Baggout wishes to fulfill?
DJ: Baggout is a social commerce platform with the value proposition of creating a personalized catalog of products for our users on the basis of what their friends and other Baggout users like and buy. Every product listed on Baggout can be bought by clicking through the “Buy Button”. In case, the user wants to visit the product later, she can like the product and the product gets saved in her profile.
[pullquote id=”lhipull” class=”left_pull”]The biggest gap in the online shopping market is that online shopping is not social.[/pullquote]
While buying offline, everyone takes someone along to the mall/shop which is not possible during online purchasing. We want to create a social layer over e-commerce to help users discover and buy the right products. Currently, we are focusing on fashion/lifestyle products because this product category is highly conducive to discovery based buying. As per the data from Poshmark (a US based app) around 75% of women fashion sales happen based on discovery while the remaining 25% happen through search.
PN: What features do you wish to bring in further?
DJ: We have just released “Search feature” last week based on the user demand. We are, currently, testing Cashback feature and are going to release the same within one week time. Our users, thus, would be getting handsome cash back on each purchase done through Baggout.
PN: How has the response been so far and what are the challenges you are facing as a startup?
DJ: We launched our website on 24th May 2013 and the response has been tremendous in the four-five months of our existence. Users have provided very positive feedback on UI and simplicity of the product; we are also getting strong response from some of the largest e-commerce companies in India. With the initial product testing out of the way, we are now looking to ramp up the business.
In terms of challenges, biggest challenge is to hire good people/consultants to work with.
PN: How are you using social media for your startup. Are you managing in-house?
DJ: Baggout is a social product so social media is an important part of our marketing mix. We are fairly active on Facebook and have over 14,000 fans. We have not concentrated on any other network as of now due to both their lower relevance as well as our bandwidth issues. We are managing the social media in-house.
Social discovery or curation is becoming a crowded space but if done in a smart way, can be appealing. Right now there are established players in the market but the scope is quite big and Baggout can make a difference as it grows from here and also incorporate the gaps in its mobile app.