Pareto distribution or the 80-20 rule states that 80% of effects come from 20% of the causes. The theory came about when Vilfredo Pareto noted that 80% of the land in Italy was owned by 20% of the population. Popular observation in retailing is that 80% of sales come from 20% of the products or 20% of the customers. In the last decade, e-commerce businesses realized significant profits out of selling small volumes of hard-to-find items to many customers instead of only selling large volumes of a reduced number of popular items. The total sales of a large number of items & customers in the remaining 20% came to be known as The Long Tail. ”This has gained popularity in recent times as a retailing concept describing the niche strategy of selling a large number of unique items in relatively small quantities – usually in addition to selling fewer popular items in large quantities.” Chris Andersen popularized this concept through a Wired magazine article and then his book. The 80% opportunity is the Heads business & the 20% opportunity is Tails.

In India since 2005, phone commerce is disrupting brick-and-mortar commerce in similar ways as e-commerce did in the US since 1995. While all attempts at phone commerce at scale have been driven by getting a piece of the high-volume-low-margin 80% (Home Shop, Indiatimes Readers’ Offers, Naaptol, etc.), what has worked for them are actually the 20% products that are exclusively available by phone or the 20% markets where customers do not have convenient access to the product category. In other words, market access is the primary driver for the phone commerce business at this time rather than cost or convenience. Discounts and offers can drive trials and turnover, but market access is essential to drive repeats, word-of-mouth, brand, profits and therefore true value creation. The more the industry understands this essence, the more we are likely to succeed in the coming years.

In the process of helping brands and retailers create an alternate direct-to-consumer sales channel using the phone (via phone pe deal), we are exposed us to a diverse set of product categories, geographical markets and customer segments that help us learn the market. Brands and retailers that seem to be addressing the Heads business at the outset are only successful doing phone commerce as a Tails business. Those who understand the power of the Tails business are able to quickly scale it to monthly sales of 1Cr+, while those who are trying to force the Heads business are banging their heads against the wall while bleeding through the nose.

Admittedly, it is getting hard to not scratch the itch to build our own consumer brand, to practice what we preach, to snatch the whole pie of a large market. However, it requires us to focus on a specific consumer, specific need, specific product and all of that good stuff. As the wise man said: “focus is not about what you decide to do, it is about what you decide to not do”. We have been exploring a few options on the table to build a compelling brand, and with each attractive choice we want to make, there is a lesser attractive but attractive enough choice we do not want to let go. Something says, there is a way to create an institution that can do it all. Phone commerce at the core and many owned brands addressing many Tails.

So it’s been about 9 days since I joined here at Chaupaati and yes its fun. Boy, am I blown away by the amount of work we accomplish on a daily basis. Although my checklist is just a few lines, some checklists that I have seen here require entire white boards. Basically we are a phone commerce company that caters to both online and offline mode of commerce. So what have I learnt in these past few days? Let me jot it down.

First I learnt the value of customer feedback. In a business like ours where we do this 24*7*365, customer feedback is one of the foundation stones. If the customer is not happy your business can’t be doing the best it can. As a part of an exercise I called up some of our Amar Chitra Katha customers. And I was surprised to hear the feedback. Here’s an example:

Yashad (Y): Hello am I speaking to Mr. X?

X: Yes, who is this?

Y: Hello Sir, this is Yashad calling from Chaupaati Bazaar, do you have a few minutes?

X: Yes, go on.

Y: Sir, you ordered a few products from our website from ACK; I just wanted to know your user feedback.

X: I could navigate through your website easily; I found what I wanted and would like to tell you that your call centre guys are very good. They are very resourceful. They gave me every bit of information that I wanted.

Y: Anything else, sir?

X: No, I will keep shopping from Chaupaati. I like it.

Y: Thank you sir, have a nice day!

An interesting case was when I called up a lady and she said that she and her son both love ACK products. They own many of the titles that we have uploaded on our site, and so they visited our site to see if they could find the titles that they didn’t have. Interestingly the lady told me that she isn’t technologically savvy so she had her son sit on the computer and tell her what books he wanted to order! “It’s very nice that you have ACK in your catalogue, I liked shopping with you, will definitely tell all my friends that I have found a good place to buy ACK from.”

A third and perhaps most interesting of all the cases was from one of our abroad customers in Dubai.

“Wow

I got my order already today…..So quick and so efficient….SO EXCITED…..going to start reading them ASAP.

Thank you”

That’s the mail he sent, after our delivery reached him in 3 days instead of 15.

Phone commerce isn’t a simple to pull off. That’s the second of my learnings here. Imagine that you are ordering for a product via the phone and want it delivered to your doorstep. So we have to do everything from answering your call to getting you the delivery in good condition within the specified time. Try to mentally map the steps you may take while you do this. Once you have that in place multiply that several times and now you know the intricacies of the business. Well, try sending your next door neighbor a package via post. Once you have visited a DTDC or a Vichare you will know how tough it can get.

Putting together the machinery that does this seems to me like a hard nut to crack. Imagine that you have to get a catalogue from every brand, host a website, get permissions, upload your catalogue online, acquire a phone line, and set up a call centre to handle calls and you are done with only step one. Order processing and fulfillment are the other side of this coin. But the job has only begun here. You constantly have to get customer feedback and better yourself. Have I mentioned Sales yet? Okay, sales is the third part of this process, since we constantly get real time data from our call centre, we have to put it into an understandable medium so we can comprehend it and generate more sales.

Here we as designers, catalogue managers and sales executives have to think of each new idea in two ways. One from our point of view and secondly how the end user will think about it. This effectively doubles up our work load. We learnt about web designing in XIC but I never knew that what we do here in about a 100 times tougher than that. It’s not always about hyperlinking photos to static pages. We conveniently take that for granted as well. So in conclusion:

• Phone commerce is a very demanding business

• It is heavily based on customer feedback

• Getting your operations right is only part of the process.

So do visit our website www.chaupaati.in and give us your feedback.

Have I mentioned that I like what I do here? Well, for the record, I do. More on that later. Its time to get cracking!

I recently met Sundeep Malhotra, CEO of Home Shop 18 at an online retailers’ conference in New Delhi. Brilliant speaker and had the audience under a spell throughout his talk. Home Shop 18 has scaled from Rs.35Cr gross sales in year 1 to Rs.200Cr in year 2 and Rs.360Cr in year 3. This puts them at an average of Rs.1Cr of sales per day. Home Shop 18 created the first 24 hour shopping channel in India. In their first year, they tried to replicate the formula that worked in the American living rooms, viz. selling sauna belts, astrological gems and other whacky products that appeal to miserable couch-potatoes and gossiping housewives. Of course, there was the Indian touch of offering ek-mukhi rudraksh malas and yoga paraphernalia, but a good part of the programming consisted of white women speaking studio-translated Hindi matching note by note on the superlatives.

This weekend, I took the time to watch Home Shop 18 for an entire hour on a Saturday evening and took a sneak peak at their 6 hours of original studio programming per day. The first 30-minute segment was fake gold and stone jewelery appealing to the sensibilities of housewives organizing kitty parties positioned as Satyanarayan pooja. The next 30-minute segment was a fake iPhone appealing to the sensibilities of the small town businessmen who travel extensively, use 4 SIM cards at a time and care about the status projected by a multi-touch phone with a fluorescent fish as the background. In both cases, it was not too hard to believe that they fulfill 6,000 transactions a day across 1,000+ towns of India. Mobile phones and jewelery also seem to be a departure from the purely niche and otherwise inaccessible categories.

Similar to the US, television reaches majority Indian households and the mobile phone reaches majority spending consumers. However, the Internet reaches less than 20% of spending consumers in India, compared to over 80% in the US. At the same time, consumer spending in India has increased widely and the penetration of retail malls and distribution network is lagging behind the aspiration to spend in smaller towns. Television creates a desire to buy certain products, yet the distribution network makes those products inaccessible. Along comes Home Shop 18 and fills this gap. Although a moving target, it is a large market considering the consumer base of 350MM+ representing 110M+ households. The phone is obviously an integral part of the eco-system since it gives consumers a way to connect with the business and makes the transaction possible, while the distribution network is integral because it completes the loop where brands and retailers have failed.

Home Shop 18 has now learned that they have unlocked a market for products that fall in the delta of media reach minus distribution reach, and even genuine brands are eligible within their model, if not more so. They are aggressively extending their catalog to include originals instead of fakes. Of course, the challenge is to reach targeted consumers for high value products, instead of mass consumers for high volume products. It is unlikely that a buyer of genuine products would watch the same channel, since she has been cognitively trained to switch the channel as fast as a mother stumbling upon a porn channel in the presence of children. However, it is possible to reach targeted consumers via the large network of private channels that are looking for a revenue stream beyond pay-per-second advertising. There is no dearth of genuine brands looking for reach through the barrage of private channels, if only their ROI risk was better managed. If Home Shop 18 can successfully bridge these two made-for-each-other needs in search for a business model, rest is clockwork and a short runway to the bank.

While entrepreneurs in small towns have figured out Home Shop 18 as a an alternative distribution channel that gives them opportunity to mark up and locally sell products to those who do not watch television, it re-iterates the value Home Shop 18 is creating as a distribution channel.

India spends Rs.10,000Cr a year on television, another Rs.10,000Cr a year is spent on print, and Rs.5,000Cr a year on other media (outdoor, BTL, online, mobile, etc.). The phone is penetrated across all consumers of this media and all consumers who are spending. Are there more “new retail” companies in the making who can address the same delta of media reach minus distribution reach? I would like to believe so.

Think about the last 10 books you read and the reason you picked them up and not any other. In my case, all of them were recommended by friends, or by the author/publisher/editor, or by Amazon.com which knows my reading patterns, or by fellow reviewers of books in the blogosphere and media. Whenever I found myself in a bookstore on impulse, I returned empty handed. Probably picked up a new release by a favorite author every once in a few visits. A book is something we give many hours of our time to and therefore build a fairly strong reason to read it before deciding to purchase a book.

One of the books recommended by a friend two years ago was Cosmicomics by Italo Calvino. Since then, I have been trying to get my hands on the book in Mumbai. Small bookstores like Granth and Danai in my area did not have it and couldn’t get it for me all this while. Large bookstores like Landmark and Crosswords did not have it and could not find it in stock at any of their outlets across Mumbai. Online stores like Indiaplaza and Indiatimes had no clue who Italo Calvino is. I finally found my copy on Flipkart.com. Found it the first time I looked, ordered it for Rs.561 and am halfway through the book in the following week.

Books are the killer category (arguably) that brought e-commerce to the world. After a decade of failed attempts in India to create an online business for books, along comes Flipkart.com and makes it happen. At the time of writing this, I estimate that they do 40,000 transactions a month at an average selling price of Rs.500. Why did this work now and not in the last 10 years? More Internet penetration - No. More book enthusiasts - No. Past entrepreneurs were stupid - No. Better recommendations & reviews - No.

When you Google a book, you will find it on Flipkart.com. When you land up on Flipkart.com, you will get a certain comfort about the site, about the offer price and about the delivery time-frame. Once you give it a shot and have a good experience, you will go back to it once again when looking for a book. After successive positive experiences, you will tell your fellow readers about it. Millions of such chains are being fanned out. Flipkart.com simply created a comprehensive catalog, made it easily accessible online, gave you all information you needed about the book and nothing you didn’t, did enough to win your trial at the risk of losing a few hundred rupees, then delighted you with the experience to create a habit of coming back.

Indiaplaza, Rediff, Indiatimes and all other past online book stores tried to replicate the in-store format of taking the highest moving books, giving it prime real estate, deeply discounting them, and then grabbing a small part of the funnel for temporarily high moving titles. As a regular reader, you could not find what you were looking for. As an impulse reader, you would decide to read what the store wanted you to read every once in a while. The limitations that made book retailers unprofitable, became precisely the reasons why online retailers did not scale.

It’s heartening to see that simple things done right still result in scaled businesses, even in India. Flipkart addresses an interesting niche. As it expands, it will hopefully not get carried away, be mindful of its customer base and try to sell more things that that customer segment needs. It should also be deliberate about maintaining the same levels of service in other categories it enters where timely deliveries are easier said than done. At Chaupaati, many of us are fans of Flipkart as customers as well as entrepreneurs. We look forward to learning more from this cool company and these phenomenal entrepreneurs.

At Chaupaati, we have always wondered how the pervasiveness of the mobile phone can be used to provide market access to consumers at large. In the early 90’s, AOL made the Internet pervasive in American households and Netscape changed the way these consumers accessed information over this new medium. In the late 90’s, several American companies disrupted traditional brick-and-mortar consumption models by providing direct market access to these consumers in this brave new world. In the late 00’s, the mobile phone has penetrated Indian households and we are in times where businesses are figuring out how this impacts the way people access and buy consumer goods and services. Here are some initial learnings.

Phone is not Internet

A phone is meant to access people. The Internet is meant to access information. One may be used as a proxy to the other, but it is important to understand the difference in consumer expectation to enable that proxy. While the phone can be a medium to interact with a digital platform that is always accessible wherever you are, it is different from the Internet. Using the Awareness-Intent-Desire-Action model of consumer behavior leading to a purchase decision, let us contrast how the two media compare. Both phone and Internet are interactive media and best used for Awareness creation on pull rather than by push. The Internet is great for high-involvement information browsing and okay at visualizing, making it a good medium to convert Awareness to Intent to Desire. The phone is pathetic for this purpose. The phone is great at providing comfort from human interaction and clarifying nagging doubts at the moment of truth, making it a good medium to convert Desire to Action. The Internet falls short here.

There is a Unique Reason

Popular myths: (a) If it sells in the store, it will sell on the phone. (b) If it sells on the Internet, it will sell on the phone. These are both dangerously wrong inferences. Wrong because there are several counter examples. Dangerous because they are half-true. A new medium must offer a unique benefit for people to break away from current habit. This benefit must be compelling enough to drive the change in behavior. Multiple successful behavior changes will eventually drive a habit change. Every order by phone is triggered by one or more of these benefits: not near Internet, special order requests, need clarification, not available at my stores, don’t know where to buy, it’s a secret, want to negotiate, want convenience, have deadline, want home delivery, getting a great deal, etc. It will become a habit only after multiple orders. Before that happens, transactions will not happen just because people want to buy.

Medium - Product - Consumer

Popular myths: (1) Television and print are the best ways to advertise products meant for ordering by phone. (2) Gifts and durables are the killer categories for phone commerce. (3) Businessmen in tier 2 urban areas are most likely to buy over the phone. In each case, the incorrect conclusion is that a medium, or a product, or a consumer is best suited for phone commerce. In reality, it is correct to draw conclusions only on the combination of media, product and consumer. Media bias: Housewives will purchase jewelery as seen on TV, but not as seen in a newspaper. Product bias: Parents will purchase children’s comics they browsed online, but not textbooks. Consumer bias: Nagpur shopkeepers will purchase dual-sim mobiles advertised on hoardings, but Mumbai shopkeepers would not. It is the combination that works or does not work.

It’s a Platform, not a Call Center

Just as an Internet business is not just a website, a phone business is not just a call center. Anyone can set up a call center, just as anyone can set up a website. But outsourcing a call center or website design capability is a different business from offering a platform that enables a new consumer service. What defines an Internet or phone business is the product or service it offers, the experience it provides its customers, and the way it fulfills its promise to the customer. Websites and call centers with a strong catalog, good usability and impeccable fulfillment are more than just websites and call centers. Business success relies on understanding the customer need and building an entire organization, product platform and fulfillment network to fulfill that need.

Chaupaati’s mission is to aggregate the commerce between consumers, unorganized businesses and brands in India, and make it easily accessible. We are doing this by working with leading Indian consumer brands and retailers to build out a direct-to-consumer channel in books & magazines, home appliances, computers, mobiles, education, gifts, automobiles, retail, FMCG, consumer services and other verticals we have not discovered yet. If you know of someone who shares our vision, please let me know at kashyap@chaupaati.in. In the meanwhile, enjoy phone pe deal at 922-222-1947.

August 2009: Laxmikant Vyas, Gaurav Chopra, Mini Paul, Rohit Kumar - students of Indian School of Business 2010 performed a study of Chaupaati Bazaar as part of their final project of the core course in Entrepreneurship. The mandate for the report was to identify an individual who has been involved in starting or growing a venture, identify the challenges or hurdles faced by this individual through his/her journey and the course of action adopted, analyze these actions and their impacts and conclude with any valuable insights gained.

In order to analyze the sustainability of Chaupaati’s business model, they studied a similar venture started by Abhay Singhal, an IIT Kanpur graduate. Abhay was one of the first to realize the potential of phone classifieds and had started his venture in Bombay in 2005 backed by $500,000 in VC funds. They analyzed the reasons why the SMS based phone classified service did not take off as expected and contrasted it with Chaupaati’s business model that overcomes these problems.

The report says that Chaupaati’s key strengths are the business model, affordability by small businessmen, focused top management, and quality of customer experience. The report identifies Chaupaati’s future opportunities in expanding from a phone classifieds to a phone commerce platform, and expanding geographical scope from Mumbai to rest of India; and cites Chaupaati’s agility to adapt to market conditions and change as the biggest factor that makes it eligible to address this opportunity.

Chaupaati was particularly impressed with the “Learning and Reflection” section in which the report draws parallels between Chaupaati’s real world approach and business theories learned in the classroom; in the areas of evaluating and developing the opportunity, securing resources, and growing and sustaining the enterprise.

Thanks Laxmikant and team, for a brilliantly written report and your insightful coverage. And thanks for letting us share it with the world beyond your colleagues and faculty at ISB. Best of luck from the Chaupaati team!

Shruti and I moved to a new home last week. Given the nature of both our work, neither of us has much income and we need to save every buck on this move to minimize damage. The perfect case for using Chaupaati. Here are my experiences so far.

1. Bought a used Washing Machine: Harish Vyas (name anonymized) was upgrading to a bigger washing machine. He found out about Chaupaati from a Gujarati newspaper ad and decided to advertise his washing machine deal by calling 922-222-1947. He was asking for Rs.5,000 for a 6.5KG LG Fabricare washing machine, originally bought at Rs.18,000 one and a half years ago. After Shruti found this deal on Chaupaati, she visited for an inspection and then made an offer of Rs.4,500. The following weekend, I went with the car, completed the transaction, loaded it up at his home and transported it to our home. Before making the payment, I made a cursory inspection, got a promise to return if there were any surprises, and understood all fittings and settings so I could have it up and running the same day back home. Harish lives in Andheri West 2km from our new home, and it sure helped that his engineer dad is hands-on and knows his machines. Sure enough, the washing machine was up and running the next morning with all fittings. No surprises. Except, Harish has not yet paid Chaupaati and does not feel obliged to! As we have discovered the hard way, the individual advertiser does not like to pay after use. If the deal does not happen, they feel no obligation to pay for responses received, no matter how genuine. When the deal happens, they behave just like my mom does in the mall. In a buy-four-get-one-free deal, she always asks the shopkeeper for the free thing, WITHOUT buying the four paid ones. Consumers, after much coaxing, are willing to pay for that one response that translated to a deal, and have something nasty to say about all others and feel no obligation to pay for them. Now Chaupaati collects money in advance, after a FIRST AD FREE trial.
2. Bought a second sale Microwave oven: Rahim Khamisy (name anonymized) is a wholesaler of second-sale LG products and a customer of Chaupaati’s century plan (100 contacts). He has built relationships with LG-corporate and gets bulk stock of LG seconds products, which he supplies to many local entrepreneurs across Mumbai. These products are typically showroom pieces with minor external damages or excess inventory of a discontinued series, and are covered under parts and service warranty (non-replacement) by LG. The asking prices are usually 30-50% off MRP and make it great buys for the value-seeking consumer. Besides supplying to dealers across Mumbai, Rahim does retail sale in his locality. Because of Chaupaati, he has now extended his retail network to rest of Mumbai, as long as customers are willing to visit the little corner of Khar East where his workshop is located in the periphary of a slum. Shruti was looking for a new microwave oven (convection+grill) in her neighbourhood and found Rahim’s deal for a 26 Liter LG. The asking price for a Rs.11,500 MRP microwave was Rs.7,800 in seconds. Shruti brought this down to Rs.7,500 before we made a visit. After inspecting and testing the machine at the workshop, and understanding the warranty process in detail, we haggled a little more and picked up the machine at Rs.7,000 even. We baked papads in it the same evening.
3. Signed up an AMC for two air conditioners: As part of my rental agreement, my landlord required that we sign up an annual maintenance contract for the 2T split AC in the living room and 1.5T window AC in the bedroom. This way he is sure his machine gets serviced (a compulsary activity in polluted Mumbai). I called Chaupaati to find technicians who offer AMC in my neighbourhood and got connected with five technicians. Within the next 10 minutes, I had spoken with each one of them, without making a single outbound call. Each one relentlessly redialled before they could describe their deal to me themselves. Each offered a slightly different rate and service package for the combo deal. The interesting discovery was that there are multiple AMC contracts - service AMC contracts (basic) and parts and spares AMC contracts that cover all replacements (comprehensive). A few hours later, I struck a deal with the landlord by e-mail that we would sign up a comprehensive AMC and he would pay the difference between comprehensive and basic. Everyone wins. The technician visited the same day, inspected the A.C.’s, signed the contract, picked up the cheque and scheduled the first service appointment for next weekend. The interesting part is that technicians on Chaupaati get a chance to specify all their service plans (about half a dozen in case of air conditioner repairs), complete with the pricing and description; something they cannot do in any phone yellow pages where they simply get one business listing for the service offered. They can get creative about their keyword selections so they show up in multiple categories, but nothing differentiates them from each other besides location. What made my day was that one of the technicians introduced himself as a technician calling from Chaupaati Bazaar!

Incidentally, Chaupaati completed a full year of operations (since first employee) last week. One year later, this was all in a weekend’s work…

A lot of us have wondered how print media looks at Internet and phone classifieds in India, and vice versa. Craigslist made a significant dent in the print classifieds business in the US for highly profitable categories such as jobs, real estate, automobiles and personals. However, in India, we increasingly find that online jobs (e.g. Naukri.com), online real estate (e.g. 99acres.com - see ad in Times Property over the weekend), online automobiles (e.g. Zigwheels) and online matrimonials (e.g. Shaadi.com) have long standing deals with major print publications and have advertised on a regular basis.

Are these categories unimportant to print classifieds? Does ToI not understand that 99acres.com can cannibalize the business of Times Property? Is the opportunistic sales team of ToI flying under the radar to make a quick buck from companies that want to suck out relevant customers before head-office finds out? Do publications find new media companies too small or insignificant to be a threat? The answer to all above questions is negative. Let’s unravel the mystery.

For both businesses, reach to buyers/sellers and brokers (”party and broker”) is necessary to build a large enough business. However, it is not sufficient. A sales model to regularly collect payments from these participants is a defining part of the business and ends up consuming a lion’s share of the cost for both businesses.

Publications primarily operate through classifieds depots run by local entrepreneurs who have last-mile reach and motivation to collect small payments. The depots take care of inventory risk, defaults, ad creatives and placements. For the advertiser, the experience involves paying a local guy some money and waiting at the phone to receive calls. The advertiser may not even be a newspaper reader.

Online classifieds operate through a multi-tiered sales force of salesmen collecting money offline. These salesmen might be in-house or agency driven, and work on a commission basis. For the advertiser, the experience involves paying a friendly sales guy some money and waiting at their computers/phones to receive e-mails/phone calls. The advertiser may not have ever been to the classifieds website.

Note: Like all rules, there are exceptions. There are online players that sell through classifieds depots (e.g. Rediff.com) and publications that sell through direct sales (e.g. Mid-day).

The point is: all consumer media businesses at scale (new or old media) rely on a multi-tier commission-based sales model, even if they are able to solve the last-mile and trust problem to drive usage and deliver value. In such a scenario, aggregating a few hundred customers at a time is desirable as a strategy. If a partner can short circuit your cost structure by being proxy for hundreds and thousands of advertisers in one shot, total cost savings for these advertisers more than make up for revenues shared with the partner for those many advertisers. In fact, chances are both businesses inherently have a cost structure that favors aggregation of many advertisers into one source of revenue.

In the future, don’t rule out an online/phone classifieds powering the inventory of print publications and directing people to subscribe to newspapers, just as newspapers would direct consumers to Internet companies. It makes sense for both businesses - short and long term. Benefits of working together for both outweigh potential loss of revenue for either.

Btw, Chaupaati has partnered with multiple print publications in English, Hindi, Marathi and Urdu for a weekly Second Hand Bazaar section. The results have been successful for Chaupaati as well as the print partner, and both sides believe that we are offering more to our mutual consumers and advertisers by working together. These deals are beyond simple branding or banner advertising, and integrate at the inventory and response level. Conflict of interest, did you say?

Mohammad Rafiq is the sole bread winner of a family of five: his wife, 3 kids and him. “I started my little shop in 2008. I am in a limited area in the middle of 1,000-2,000 jhopdas (huts). Before Chaupaati, I sold 2-5 computers in the neighbourhood”. Besides selling assembled computers to slumdwellers and low-income customers, Rafiq also trades computer parts, offers repair services and computer education & training to youngsters in his slum. Before meeting Chaupaati, he did not get customers from outside the slum.

“God had his way and someone from Chaupaati visited me here and told me that he would get me new business through SMS. His words immediately stuck in my head.” Rafiq bought the cheapest available trial plan from Chaupaati and got 20 contacts within a period of a week. Out of these, a couple of youngsters from Virar (30 km north of Andheri) found Rafiq’s deal too good to be true and showed up at his shop. They took home two computers, on which Rafiq made a profit of Rs.500 each. After a week, he sold another at Rs.700 profit. He had now made more than 3x return on his investment in Chaupaati. Then he bought the monthly plan and closed 4 more deals: “Mira Road, Sion, Kandivali East and Kandivali West”. He is now a subscriber for our yearly plan, whose plan value is 50 times the value of his original trial plan; and with this, Rafiq expects to do 100x more business within the year!

“Dial Karo tried to sell me a plan for a much cheaper price than Chaupaati and said they would start my service within 3 days”, says Rafiq, “but now I am familiar with Chaupaati and I like that they always started sending me contacts from the very first day. I am satisfied with Chaupaati and I trust them.” He has no reason to try another service when Chaupaati is exceeding his service capacity faster than he can scale it. Rafiq succintly concludes “For me, it’s all about fresh sms, fresh call, fresh deal“.

Customers like Mohammad Rafiq help us fulfill our dream of empowering the small entrepreneur and give him a level field to compete with bigger businesses on the basis of his merit.

A 2007 report by Toxicslink mentions how Mumbai generates 19,000 Tonnes of e-waste per year, and yet imports furthermore. In the heart of Jari Mari Industrial Area in Mumbai is Saki Naka, the focal point of electronic waste trade in India and the centre of a large low-income slum area. There are approximately 100 shops of computer waste located in Teen Number Khadi (Bay No. 3). Kurla, Kamathipura-Grant Road, Jogeshwari and Malad are other centers for computer waste in Mumbai. Entrepreneurs with the capability to scavenge, salvage and re-engineer products out of e-waste have created a vibrant economy of unorganized retail for computers and consumer durables across Mumbai. Hundreds of such retailers use Chaupaati as a medium to reach tens of thousands of consumers across Mumbai, many of whom are located in slums in the same areas.

Sayed Asad, owner of Best Computer Solutions, is headquartered in a prime location in Saki Naka. He purchases old computers, laptops and printers from leading banks and corporations, then re-furbishes and upgrades them with multimedia and entertainment capabilities, then offers them at unbelievable prices for education, home and office use. He provides replacement warranty for all his products and has broken a price barrier that no one in Mumbai is able to match, especially for entry-level configurations. He has 10 branches across Mumbai and 25 full-time engineers. Sayed says, “Now we are proud we made it easy for all to purchase computers.”

When Sayed first heard about Chaupaati on June 15, 2008 (10 days before Chaupaati launched), he was immediately convinced because of our focus on second-hand products, and he is one of the best in the business for old computers. Sayed Asad was one of the first dealers to advertise his deals on Chaupaati and then went on to be a party to Chaupaati’s first known phone pe deal on July 4, 2008, within 4 days of launch.

Since then, Sayed has acquired over 1,000 customers from Chaupaati and he says “For every 100 inquiries received from Chaupaati, at least 25% get developed into deals”, and says “we have been able to build a brand across Mumbai. Since we joined, Chaupaati has resulted in significant growth in business development for us.” Compared to newspapers, Internet, flyers and other media, he finds mobile as the fastest and best medium for interaction. After a customer is generated, “we get an immediate alert by SMS. This is followed up with a quick conversation, prompt visit, and fast deal.” Chaupaati has sent him inquiries from all corners of Mumbai (Vashi - Eastern corner, Vasai/Virar - Northern corner, Colaba - Southern Corner) and the customer profiles include low-income, middle-class as well as corporate buyers.

It is customers like Sayed Asad that help us fulfill the promise of “best deals in Mumbai” for computers.