It was a breezy Monday afternoon in Bangalore for India Deal Sites blog’s first interview. I was at the Koovs office in Koramangala when I suggested it looks like the perfect afternoon to go on a long drive. “Probably another day” replied Rajesh in a warm, easy-going manner. Young, adventurous and spirited – Rajesh co-founded Koovs when the Groupon craze was yet to reach Indian shores. We agreed on the interview format and got down to it right away.
Here’s the transcript of the interview:
Praveen (PR): Tell us about the story behind Koovs. How did it all start?
Rajesh Kamra (RK): We were a team of 3 IIT-ians along with Manish Tiwari & Amit Shukla. I was working in strategic consulting with HSBC while Manish and Amit were with e-commerce companies. One day, we came across this concept of localized marketing. We realized that many of the local vendors do not have access to online marketing or didn’t understand the space too well but wanted to reach out to local customers. We thought there was an opportunity here and something could be done towards that end.
So, we founded Koovs in December 2009 and tried to create relationships with vendors and merchants in various lifestyle businesses like restaurants, spas, adventure sports, events – which a typical online, social crowd would be interested in. The merchants were quite interested and enticed by the idea of reaching out to customers. The issue was in giving out those hefty discounts. So initially, there were some hiccups in making them understand that it was not a sales cut but a marketing spend, which isn’t paid upfront and that it completely depends on the sales generated from running that deal. Slowly over time, there were a few offers coming in from owners of restaurants, health centres and spas who were interested in trying it out. We started with that and went live on 23rd December, 2009.
But, it wasn’t until that paragliding deal when things really took off for us. Hundreds bought that deal. And then the network effects took over. We’d merchants who were ready to offer 80-90% discount after that. It was a turning point for us.
RK: To be honest, I didn’t know about the other deal sites at that point in time. We went about meeting merchants and during one of those visits, we found out that one of them had been approached by other parties with a similar pitch. So that’s how we actually found out! We got to know about MyDala and then Grabbon which got sold out a few months later to…
RK: to SnapDeal. Yes, exactly. And then there were several other players coming in and the space really heated up. But, we had the conviction that this would work as it made business sense and we never looked back.
PR: Coming back to the same question. In December 2009, as an early entrant in this market, how did the early mover advantage play out? Or was it actually that much more difficult to get these deals since this concept itself was quite new and deals space wasn’t popular or mature enough as it is today?
RK: Well, there were two major issues or concerns when we started. First, with the merchants – Will they buy this kind of marketing platform? And the second – Will the consumers buy it? The point is OTAs (Online Travel Agencies) showed that people would buy online if there was value being created with the convenience factor playing a huge role. The best way to find out was to go and talk to the merchants directly. We did that and simultaneously reached out to our friends, posted on various blogs, social media sources, corporate newsletters and places like that. And there was traction as the customers were happy since they were getting 50-90% discount on places they normally visit, or would like to visit. So, the risk for them to experiment was lesser while at the same time, the merchants were getting new customers. It picked up from there. Thankfully, the merchants warmed up to the idea and realized the value in it. And that is one reason why we also have many repeat businesses from merchants.
PR: Could you give us some stats. How many cities is Koovs active in? How many users have signed up?
RK: We’re one the top 700 sites in India now (Alexa ranks them at #686). We’ve over 5-lakh subscribers with over 20% of them having transacted with us. We’re a pan-India player but the localized offers are concentrated in the metros as of now. We are yet to capture the tier-2 cities and we are planning to get there shortly as we are expanding.
PR: Which is your most popular category? In terms of the number of deals sold and the overall sales volume generated.
RK: Food & dining and health & beauty categories are quite popular. Travel space and adventure sports are also doing really well. Koovs is also into products and that’s a big hit.
PR: I think Koovs were the first to pivot into product space right?
RK: That’s right. It was based on the feedback we got. There were a lot of requests coming in from our existing customers that they would also like to see deals on mobiles, pen drives, hard disks and the like. So, we went ahead and introduced it.
–End of Part I–