Bababazaar.com revamps delivery model

NEW DELHI: Bababazaar.com, which had grabbed headlines around two years ago for being one of the first sites in the country to offer online shopping (that too for vegetables, something that no one else has ventured into as yet) has now revamped its logistics and delivery strategy. According to IB Saxena, chairman of IB Saxena Design Labs that owns the site, "We were making losses of about Rs 3,000 per day in the beginning. It came down to an average of Rs 1,500 a day till about a month ago." The company has invested close to Rs 20 lakh in the site, and is yet to reach the break-even level.

It was after a lot of thought that Saxena finally zeroed in on the fact that

the reason for the losses was the logistics and distribution system. The site

used to charge a flat fee of Rs 25 on every purchase. Deliveries were made on

the very same day, irrespective of where the order came from. "The main

problem was we could not cover the costs of delivery, let alone make profits on

them. We used to get orders from all parts of the city. There would be an order

from, say, East Delhi and then another from West Delhi. That was becoming very

expensive," said Saxena. In fact, the problem became so acute that Saxena

was not even pushing people to buy from the site. "Every time we got an

order, we had to pay from our pocket, so we were not encouraging people to come

on to the site."

The site has new deployed a zonal delivery system, wherein Delhi and its

neighboring areas have been divided into six zones. Each zone has a fixed day of

delivery. Also, the service charge has been completely done away with. However,

if someone wants delivery on an alternate day, they are charged a fee of Rs 50.

"It's been about three days since we started this new system, and our

registered users really like it. They don't mind waiting for a week to forgo the

extra money. This also enables us to plan our inventory, which in the coming

days will help us sell at more competitive rates," said Saxena. The site

used to get about four to six orders a day before the new model was implemented.

In the last three days, it has been getting six to 10 orders on an average.

Saxena hopes to soon touch a level of more than 20 orders a day.

Not only has Saxena changed the delivery model, he has also added new

features to the site. For one, the site is now WAP-enabled, making it the

world's first WAP-enabled vegetable store. With this, users will be able to do

their shopping from their cell phones. Check out the mobile phone emulator on www.bababazaar.com.

There are other unique WAP features that the site offers. One is the

directory service, with which a user can enter a telephone number in Delhi and

get the corresponding address. Bababazaar has tied up with One97.com, a

directory service Web site. Another attractive service is the auto routing

feature. With this, users will be able to find the shortest possible route

between two destinations within Delhi.

Even after two years of not making profits, Saxena is wary of investments

from venture capitalists. Said he, "Taking investments from a venture

capitalist is a risky business and is feasible only for people who have the

capability to repay the amount if their project doesn't succeed. So many

start-ups are taking funds from VCs, because I guess they still have a chance to

sell the venture off to someone else. But we don't have that kind of a policy.

We are here to stay." He admits that he had been approached by major VCs.

"But I prefer to be on my own," he says with the same conviction and

confidence he had when he started off with bababazaar.com two years ago.