A website to help price-sensitive consumers get the best deals4 min read . Updated: 27 Jan 2013, 10:28 PM IST
BuyHatke, which has 40 partners including Flipkart, has garnered 4,000 visits a day since its launch in mid-2012
Gaurav Dahake, an industrial engineering and management student at the Indian Institute of Technology (IIT) in Kharagpur, had a friend’s birthday coming up. But he was not only faced with the dilemma of what to buy but also where to buy it from. With the Internet teeming with e-commerce sites boasting of the best deals in town, he went ahead and bought an iPod-touch for 8,500 on a site, and was happy with the purchase.
“My friend burst my bubble and told me it was available for a good ₹ 600 lesser on another site. It was very frustrating to know that I had paid more," says Dahake, now a final-year student.
That’s when the idea of a site that searches for the best deals among other e-commerce sites dawned on him, and BuyHatke.com was conceived in December 2011.
There are about 343 e-commerce websites in India and the Internet generation is confused as to which site to make their purchase, says 22-year old Dahake, who is the founder and chief executive of BuyHatke. Also, Indians being price-sensitive, they are always on the lookout for the cheapest available price for a product.
Since mid-2012, when it was launched for the public, the site has been able to garner 4,000 visits a day and BuyHatke scans for deals from 40 different credible Indian e-commerce websites such as Flipkart, Jabong and Bookadda. BuyHatke also has a social recommendation feature, where the search engine pulls out the ‘likes’ of a person on Facebook and, after analysing the kind of product searches that were being made, makes recommendations of possible gifts.
As with most start-ups, putting together the right team was most challenging for Dahake and co-founder Rohit Shah.
“This is a very technologically intensive operation, as it needs sophisticated algorithms to fetch out the relevant data," says Shah, an electrical engineering student at IIT Kharagpur.
After scouting for a couple of months, Dahake and Shah built a team of 10 members, all from IIT, whose strength lie in technology. With an initial investment of ₹ 1.5 lakh, raised from family and friends, they registered a company called Bidon Services Pvt. Ltd.
The revenue model for BuyHatke is based on commissions. Sites are affiliated with BuyHatke and with every purchase made, while the partner site earns an average of 20% margin, it shares a percent of it with BuyHatke, usually between 2% and 10%.
The highest margins are from apparel sites, which earn 8-10%, while electronics have the lowest margin with 1-4%. Dahake refused to reveal the revenues of the company as it is talks with venture capitalists for funding.
Monetising the site is also a major revenue stream for the site, but Dahake and Shah want to take that route only once they have at least 500,000 visits a day, which they hope to get within a year.
The team is developing a smartphone app, where on scanning the bar code of any product, the app will give the best deals from across sites on the fly. A picture-based scanning app will also be launched in February.
In addition, BuyHatke will feature products from brick and mortar stores to reduce its reliance on partner-portals.
BuyHatke was one of the top five judges’ choice in the Tata First Dot competition.
“The biggest strength of BuyHatke is its technology," says Shah.
“With e-commerce showing fast growth, we have made the first move into a space like this, and this could potentially make us industry leaders," adds a confident Dahake.
E-commerce revenues in India will increase by more than five times by 2016, jumping from $1.6 billion in 2012 to $8.8 billion in 2016, according to a 2012 report by industry body Associated Chambers of Commerce and Industry of India (Assocham) and advisory firm Forrester.
While the underlying potential is huge for the company, scaling up will be a formidable challenge. It will need to expand its team from the current 10 to at least a 100 technically skilled people by 2015, which can prove to be difficult, says Dahake.
Additionally, the credibility of BuyHatke rests on the success of its partner websites.
Dahake says the company is particular about partnering only with sites that are widely known to be credible. “We have partnered with only 40, though it has the capacity to support hundreds of portals."
But Dahake is not daunted by these challenges. Though a first-generation entrepreneur, ever since he entered IIT, he had been exposed to various entrepreneurship forums, which sparked off the spirit of entrepreneurship in him.
He took semester-long courses in visual communication, intellectual property law and management courses alongside his main subjects, anticipating that he may need it someday.
Though, he says, his parents would have preferred him to stick to the fail-safe plan of campus placement, and a plum package, the life of an entrepreneur is most interesting and dynamic for him.
While Dahake says the company was begun with the motive of sustainability, he is of the generation that believes in keeping his exit options open.
“With favourable market conditions, an exit option can be explored," he says. However, he also adds that an exit can pave way for other interesting ideas waiting to be pursued.
Mint has a strategic partnership with National Entrepreneurship Network, which hosts the Tata First Dot competition.