Economic Times (ET): What was the idea behind starting Winni and when did you decide to start the company?
Sujeet Kumar Mishra (SKM): The company started in 2012 when I faced trouble in sending birthday gifts to a friend in another city. I realised that there was no credible online gifting platform that had a wide range of gifting products available for different occasions and relationships. Also, ensuring a hassle-free and on-time delivery was an issue. That is when I felt that with mass displacement for jobs and a huge population living in different cities of India, there was a need for such a platform. So, I shared this idea with my friends and when Winni came into existence, they became the co-founders. We are celebrating the 10th anniversary this year. We have 20 million users, presence in over 700 cities, a vendor network of more than 3,000, delivery capacity in over 40 countries and a revenue of Rs 120 crore. And we have remained entirely bootstrapped.
ET: What is the opportunity for such a service in a country like India?
SKM: With a large segment of our population migrating to tier-1 cities, there is a need to send gifts to near and dear ones to celebrate an occasion and keep relations warm. In the last few years, the disposable income of people across different income groups has increased significantly, and they have turned into an aspirational class. In the last 10 years, the number of smartphone users and internet users have also increased manifold and it is growing at a rapid scale, which creates a massive opportunity for players like us as celebration is everyone’s affair and not restricted to a particular class.
What also helps is that India is a festive society and we have so many personal, cultural and religious events to celebrate and cherish, which again creates a massive opportunity for platforms like us. The online gifting market is emerging as a huge opportunity. It is at $65 billion in India and growing at almost 30% Y-o-Y.
The industry is still highly unorganised and has low competitive intensity, which is an advantage. To put out some numbers, there are about one lakh unorganised bakery shops and about 20,000 florists. In the 10 years of our existence, Wini has emerged as the second largest online gifting platform in India after FnP.
ET: Why did the firm decide to remain bootstrapped and how did it prove beneficial? What were the problems you faced? Did you think you could have grown faster if you had raised money?
SKM: Initially, we tried to raise funds, but did not get a response from investors because of the perception of having a smaller addressable market. So we built the business in the bootstrapped mode.
Even when we started having a good revenue funnel, we kept functioning in a lean way and scaled up the business by building the right processes, delivery mechanism and backend integrations. We were able to build more efficient and effective systems. And were able to take well calculated decisions. We became a customer funded company because we were able to prioritise our customers’ expectations.
However, there is a flip side to bootstrapping. We could not grow the way we wanted . We could not hire aggressively to grow faster. The company had to go through a networking route rather than building our own capacity. That affected our profits. We could not aggressively pursue marketing, branding & sales initiatives, which in turn affected brand visibility. There were also challenges around cashflow.
ET: Is it more difficult or easy to bootstrap a company? What happens when there is a slowdown in the economy?
SKM: It is undoubtedly difficult because a bootstrapped company cannot take a decision without being calculative about its limited resources and funds. It must remain ROI-driven and ensure productivity at each and every level. It does not have the liberty to spend on a lot of critical things, including brand building and marketing, which I admit are at times very important.
In case of a slowdown, even a bootstrapped venture is hit badly because customer acquisition and customer retention costs go up. We have to come up with offers and discounts, and this hits net profit.
The company has reinvested about Rs 50 crore during its years of operation, but the founders have invested none of their personal assets.
ET: How is Winni different from others in the sector?
SKM: There is no pan-India bakery retail chain that offers uniform product quality and a wide range of bakery products at affordable pricing in different geographies. We could do that. So, for us the moat is better control over quality and affordable pricing. This has been possible through effective backend integrations, offering in-house training for bakery professionals working at our stores and the vendor network. We also have a massive retail presence of over 300 franchise stores.
We have created a network mechanism that cannot be developed overnight. We offer skill development & training for our partners to help them to run their stores efficiently. This is done by adopting our quality parameters in product designing, preparations, recipe and delivery systems.
We also offer them a technical system to process the orders and ensure hassle-free customer service. We also offer new research & training on regular intervals to keep them updated about market trends and upcoming opportunities.
ET: What will your revenues be this fiscal year? How much was it last year and what is the growth percentage? What are your plans?
SKM: The company expects to close this financial year at a revenue of Rs 120 crore and a GMV of Rs 300 crore, compared with Rs 85 crore in revenue and a GMV of Rs 150 crore last financial year. The company has a pan-India presence and targets the middle class and the mass premium market.
We have come a long way since our inception when we did not have enough knowledge of the sector, little idea about customer acquisition or customer journey, and no delivery mechanism. To grow further, we need investments, brand building exercises, and control over consistent services and products. We annually serve about 2 crore customers and want to grow it to 3 crore by the next financial year.
