5 startups making the online adult products space seductive

The Indian culture has always imbibed a shy factor which has pulled the audience away from expressing their sexual desires openly. However, with the emergence of online portals in this space, a wide segment is utilizing this opportunity to satiate their untold needs.

Sexual wellness industry is flourishing in India with the adult sexual products market, expected to grow INR 2450 crores in 2016 and INR 8700 crores in 2020. Also, the surveys have revealed that majority orders are received on online portals by women shoppers and from the Tier1 and Tier2 cities.

“The global solution is eCommerce and this industry has quickly moved to the web from the physical retail model which has been prevalent for several decades in other parts of the developed world. What’s interesting In India, is that we have never had physical retail in the form of adult shops. Therefore, this is one of the only industries where 100% of the market is online with 0% offline,” said Samir Saraiya, founder, Digital E-Life Pvt Ltd, the owner of portal, ThatsPersonal.com.

Also, there are a few challenges. As said by Vinodh Reddy, founder of OhMysecrets.com, the major one is to make consumers aware of the availability of such products online. Legality of selling Adult toys in India is an issue and requires to strictly follow a few guidelines. Apart from these, precautions have to be taken by the companies while delivering these products to avoid losing anonymity of the product ordered.

We interacted with a few players in this space to know more about their success in this space.

IMBesharam: The company portrays itself as ‘Adult Lifestyle Web-Store’, serving 1.3 billion Indians worldwide. As claimed, the products are sourced from popular brands in US and Europe. Till last year, the company was offering around 1000 products and was aimed at increasing this number to 5000 by the end of 2013. During the beta launch phase for 90 days in 2011, it shipped over 3000 orders and the average value of the order is INR 2700.

As of April 2014, the site is getting a monthly traction of 143k unique visitors with a total of 4000 products on site and an average order value of INR 4211. Also, the founders are planning to soon launch a US site in mid May aimed at NRI’s in North America & Europe/Australia/Africa.

Based out of Mumbai and US, the venture is an initiative of Raj Armani. It offers a wide range of products across various categories such as lingerie, costumes, clubwear, sexywear, swimwear, partywear, fantasywear, footwear, shapewear, and undergarments, Energy products & energy drinks, sunglasses, watches, and other lifestyle accessories. Also, it provides stuff catering to the needs of Bachelor & Bachelorette parties.

Most of the visitors are from metros but the visitors from the non-metros incidentally make larger purchases for the site.  It currently has 223,424 Facebook likes and 3,993 Twitter followers.

Kaamastra: Launched in 2012, the venture is an initiative of Amit Batra, Maqsood Nazir and Rahber Nazir and is based in Pune. Women’s lingerie, corsets, fantasy costumes, sensual massage and bath products and accessories are a few categories it deals in. The company is known for its Black Box strategy where the complete anonymity of a customer order is maintained.

The platform is an exclusive importer and distributor for India for three international brands of lubricants. “Nobody in this industry can claim to be exclusive for any brand today,” said Amit.

For Kaamastra, smaller cities gives more sales, as they have less access to physical stores so they depend more on online stores, 40% of its traffic comes from Tier 2 and 3 cities while 60% are the women buyers.

On an average the site gets a daily traction of around 5k and till date has uploaded around 627 products on site. The average order value is around INR 1150 and the maximum processing time for any order is 48 hours.

Within the next 2-3 months, they are also planning to add a few more categories. The company achieved break-even in October last year and now claims to be a only profitable company in this sector in India.

OhMySecrets: Launched in August 2013 by Vinodh Reddy, the company aims to establish itself as “Adult Private Shopping Webstore.”  Products on site ranges from Sexual Enhancement Products,Edibles, Massage Oils & Gels, Lubes & Lotions, Lingerie etc.

The portal claims to have around 16 Lakh Visitors with an average of 42 Lakh page views and hitting close to 15,000 visitors per day on average. Also, it has close to 65,000 fan followers in Facebook.

Currently, its been self funded with a profit margin of 30% and is looking forward to breakeven within 6 months timeframe. The team is also planning to add more categories related to Adult products like Sex Furniture etc. Its global product sourcing Office is in New York and delivery/ warehouse in Chennai, India. At present they are catering only to the Indian customers.

Shykart: This platform caters to mainly the personal needs which consumers are shy to ask on a convenience store. Various kinds of condoms, sex related health products, women sanitary products, Sex Books and so on. The venture was started by Vivek Raja in early 2013.

The portal sees traction mainly from Tier 1 cities and till last year, the portal had around 800 SKUs and did 600 deliveries / month at an average ticket size of INR 700.

Thatspersonal: Based in Mumbai, it is a venture of Samir Saraiya, the owner of Digital E-Life Pvt Ltd. Founded in January 2013, the portal, at present offers products in six categories, viz. Fun Stuff, Roleplay costumes, Sexual enhancement, Erotica, First timers and Romance.

The portal offers services in 12 cities. The 30-35% traffic comes from Tier 2 and Tier 3 cities and 20% of the buyers represent women.

It currently offers around 1500 products with an average order value of INR 1900 and approximately 120k monthly unique visitors. The company also provides the facility of ‘self-pickup’ on pre-paid orders.

In near future, the company plans to introduce more products and divulge in more marketing activities, Also, the site will focus on providing more education to Indian on why they should buy these products and which products are suitable to them.

Mumbai Tops Charts for Most Intimate Products Purchased Online: ThatsPersonal Report

Sex is still a taboo in the land of Kamasutra, the story is a lot different in the online world. Where many adults are still shy to ask for a contraceptive in a drug store, the rise of online intimate product stores have come to their aid.

One of such sites, ThatsPersonal, did a research on the buying behavior of intimate products in India after having analyzed its 18 months of sales and website traffic. And the findings are an interesting read, and give insights into different buying behaviour across states in the country.

“We get some extremely unusual requests and queries about sexual wellness products right from being Jain or Non Jain to how to do it for the first time. For us nothing is more important than customer privacy and respect, hence the only information we could publish was of aggregate sales and traffic,” said Mr. Samir Saraiya, CEO- ThatsPersonal.com. While Internet has always been the destination for those not comfortable talking about personal things and sex with peers, the rising e-commerce segment is taking it to a different level.

According to the research, the western India clearly leads the way in buying of pleasure products as it accounts for 36 percent of their total sales vis- a- vis only 7 percent from the Eastern side. North India lags slightly behind at 21 percent whereas the South market comprises a large chunk of their market share accounting for 31 percent of total sales. As revealed by the company, in the West, Gujarat in particular orders the most adult games online.

Most of the company’s sales comes from the metros, with Mumbai leading them all. However, it is to be noted that the smaller cities provide a substantially higher basket value. Maharashtra and Karnataka alone contribute to 2/5ths of the portal’s national sales.

The above are top 15 Tier III cities based on the sales goes to show that when it comes to buying intimate products, size of the city does not matter.

Also Read: 5 startups making the online adult products space seductive

The above shown age wise segregation shows that the age groups of 25-34 are the most active buyers. And men lead the both the sales and browsing traffic over women.

Lubes and condoms lead the sales thus emphasizing the safe sex message and India’s educated outlook on protected sex. Although the condom remains the most bought and trusted product, Indians are experimenting with other stuff like handcuffs, edible lingerie, adult card games, edible body paint and the likes.

Based in Mumbai, ThatsPersonal is a venture of Samir Saraiya, the owner of Digital E-Life Pvt Ltd. Founded in January 2013, in the near future, the company plans to introduce more products and divulge in more marketing activities, Also, the site will focus on providing more education to Indian on why they should buy these products and which products are suitable to them.

Subscription E-Commerce: What, Why and How

What it is Subscription E-Commerce?

Familiar with the phenomenon of business by way of subscription? The age old Indian practice of having groceries, dairy products and newspapers/ magazines delivered at your doorstep on a recurring (bi-weekly/ monthly/ daily etc.) basis, and paying ‘x’ amount for the service and the convenience it offers, has hit the Indian market in a new avatar – as Subscription e-Commerce.

Who is Offering it?

Although big and small companies offer subscription on their e-commerce platforms abroad, ranging from groceries on Amazon to men’s shaving solutions on razwar.com to condoms on techbrunch.com, this is still a novel concept as far as the Indian market is concerned. Some of the options available in India are:

§  Bake Box caters to the residents of Delhi and Gurgaon. Customers may subscribe for a ‘bake box’ to be delivered at their doorstep monthly. The box contains goodies by the ‘Baker of the Month’ chosen by the team at Bakebox.in.

§  The Gourmet Box operates in Mumbai, and provides a monthly subscription box service. The epicurean delight contains 4-5 gourmet food products, recipes and product information.

§  Flinto offers differently themed boxes containing toys and projects for children, delivered monthly. Similar endeavours include ‘Canary crate’ and ‘Small Brown Box’.

§  Avishkarbox is another such e-commerce portal which offers products for children, albeit with a twist. The STEAM box [Science, Technology, English, Art and Mathematics] is available for children in Classes I and II. They also offer Inventor’s boxes for computer programming for children from 5 to 12 years of age, and Robotronics boxes for ages 8 upwards.

§  Fab Bag packages premium cosmetic and beauty brands in a box (3 products in toto), customised for each subscriber and delivered at a desired address. Likewise,Enchantess offers customised ‘enchantess bag’ which comprises of 4 beauty samples from Indian and international brands.

§  Blissbasket.com, offers a subscription for ‘romantic essentials’ and mood-makers. The package consists of intimate products, based on the customer’s replies to some general queries put forth by the company.

§  Dhingana and Google Music offer music streaming to consumers at a monthly subscription fee.

Also read: To COD or Not to COD

How is it Done?

Essentially, what subscription e-commerce implies is the same as subscription commerce. Products which are required cyclically by consumers can be purchased by subscribing to those products with the seller. A subscription fee is paid at the end or beginning of each cycle for this service, in addition to the cost of the product – in an all-inclusive manner.

The difference in the two becomes apparent when the scale of available products is discovered, ranging from consumables such as grocery, biscuits and other edibles to cosmetics and luxury items, from niche bakery products to creative and engaging toys for children. 

Fundamentally, subscription ecommerce functions on two models i.e. the Replenishment model (based on consumption of utility products) and the Discovery model (based on consumption of a combination of novel products).

To hear it from the horse’s mouth, Kaushik Mukherjee, co-founder of Fabbag.com, on how they did it : “Two years back, we started this venture as we noticed (with regard to our chosen commodity) the disconnect between Tier 1 and the Tier 2 and 3 cities. Although awareness existed in the latter, access was restricted, if any. The venture required us to resolve two things- to provide beauty products to our members at a good value for their money, and to enable marketing, brand building and constructive feedback to the brands we partner with. Today, we deliver fabbags to our subscribers in Hisar, Kakinada, Ludhiana – you name it. Consumers share the products and their opinion on Facebook, Instagram, Twitter and the like, besides the Fabbags being a conversation starter wherever you receive it – which is fantastic marketing and feedback for the brands. When consumers love a particular sample, they also indulge in full size product purchases. It’s a win-win situation for all involved.”

As per The Gourmet Box’s Himanshi, they “decide on a theme for a month in advance and then search for products in the market most suited to the theme, including doing many rounds of supermarkets and tapping into our local gourmet food producers. We then tie up with suppliers, scour their new products and ensure that we are at least stocked up to be able to deliver to our existing subscriber base, with some margin for potential new subscribers. Our warehouse at Opera House helps us there.”  She calls the entire experience “amazing and beyond expectation”, and says that with the festive season around the corner, people are realising that “gifting a subscription is a superb idea as the gift keeps on coming for 3 months or 6 months, bringing a smile to the receiver’s face every time!”

What are the Drawbacks?

§  For providing a box which will delight a subscriber month after month, the service provider has to ensure that each month’s parcel is carefully curated and contains exciting and engaging products. Sustaining an output of creative and/ or unique products on a monthly basis is not an easy job. However, as stated by Arunprasad Durairaj, co-founder at Flintobox, it is a “good challenge”.  

§  Since many subscription e-commerce companies in India offer Cash on Delivery (for fear of losing out on customers who either cannot or may not want to make payments online), they also run the risk of suffering all the disadvantages that a seller is vulnerable to with COD. However, although about 40% of Flinto’s deliveries are on COD basis, Arunprasad says that there are “rarely ever any returns”. “There is almost no difference between COD and pre-paid orders as far as Flinto is concerned. Cancellations hardly ever happen,” he states. This is echoed by Himanshi at The Gourmet Box, who said that “we always give a call to subscribers/ customers to confirm the order before delivering it, which reduces to chances of a return to zilch.” FabBag charges an additional Rs. 100/- on COD orders so as to offer convenience to the consumer, and disincentivise returns at the same time. “70-75% of our orders are pre-paid. Returns are single-digit numbers and these losses are absorbed easily by us,” says Kaushik.

§  In the event that the Seller is procuring the products or any one of them from a third party, delay in delivery of any one item or any single product being out of stock may result in lasting damage to the company. The image of the Company and the USP of providing unique products in a timely manner every month will suffer a huge setback as the business of Subscription e-commerce depends on creating a lasting relationship with its subscribers, with much emphasis on creating brand loyalty. As Himanshi says, “with imported products, the supplier may face port issues etc. and delivery is uncertain.” At FabBag, Kaushik says that this issue is combated by “studying our numbers and the on-going trends and drawing up a rough estimate of our inventory requirement at least 2 months in advance to the month for which we’re placing fresh orders with the brands, with a 5% to 10 % margin for new subscribers.”

§  If a Subscription e-commerce venture is aiming at scaling up its operations, it can prove to be a very time consuming process unless the company is dealing in bulk and/or everyday products (such as groceries, movies, household utilities etc.), or if it permits the subscriber to choose his/her own monthly products (not exceeding a specific number each month).

Scope of Subscription ecommerce in India click here

It is cost effective, requires maintenance of a low inventory and offers niche products. The business model entails a fixed customer base (one that may and will increase, albeit with sufficient notice to the company), steady cash flow and a predictable inventory, as also mentioned by the Economic Times 

It allows for a long term customer-seller relationship to develop over time, resulting in deepening consumer loyalty if you’re prompt and efficient and can keep it interesting month after month. Being in its nascent stages, the scope of subscription e-commerce in India is only growing and it may well be the next big thing here!

Online Grocery: Why it’s a Great Opportunity? Why it’s Still Nascent?

According to a recent report by worldmart.in, online grocery excluding fresh products shall grow 47% and hit USD 36 billion globally by 2016, with a high growth in Asian markets.

Globally, grocery retail chains are doing a great job online, by providing seamless omni-channel experience to customers with price advantage and convenience. And needless to say the opportunity is very large in Indian market, also provided grocery retailers, both online and omni-channel, look for a long term opportunity and not a short term play.Unlike other ecommerce categories, online grocery stores require large investments, deeper technology and complex supply chain. Hence it does not pose a wide startup opportunity. India has still seen an advent of many online grocers, though largely localized.

Image Courtesy: Tradus

But what makes this category a strong opportunity?

It is easy for everyone to relate with this category. Buying grocery is like a necessary repetitive task we do over and over again. Buying almost the same things over and over again, like a step before filling gas at gas station. Sometimes we experiment with new brands, interesting products, etc. However a large component of our purchase is what we know we have to buy.

Grocery brands also enjoy a high degree of brand loyalty. We do not often change the brands we consume.

Key experience of buying grocery

It is a list based purchase with mostly identified brands, items and even packaging.

Grocery buying is a clear list. We know what we need, how much we need, which brand or ‘if not that then that’. It is though an unorganized list, mostly residing in the brilliant mind of the lady of the house and seldom finding its way onto a small tiny piece of paper.

It is a repetitive purchase with weekly/monthly cycles

And the list goes on and on for months, only to be impacted by our growth, both in age and/or in lifestyle (includes the wallet). Rarely we change a brand or packaging, and for most of the items we never do.

It is boring, tiring and ‘inconvenient’ process

Let us undisputed agree on this point. Be it a kirana shop or a large format store, grocery buying is a boring process. At least most of my half of the world would agree totally.

Buying grocery offline is a complete turn off for following reasons:

§  Large queues at payment counters with only a few payment counters operating even though there are several rows of them.

§  Very slow staff, technical glitches, bar code not matching, wrong discount, and what not. Why should we be a part of these issues, when we have selected what we want and just need to pay and fly out.

§  Common shelf outages. Most of us work in ‘working hours’ and shop for grocery when everyone else is also shopping for grocery. Hence common, fast moving products and brands do get shelf out very fast.

§  Dealing with the attitude of un-friendly ground staff, they seriously look at your like you are going to eat the chocolate and wouldn’t pay for it. Then may be people do that too.

§  Most importantly, the offline grocer decides what and how much they put on shelf, which brand they keep or not keep, sell or not sell, etc. and for us the moment of discovery happens right when we reach the aisle. Imaging getting out of this store and going to the next one.

§  Bring your own Bag (BYOB) – is a killer. To save the environment, the onus of bringing carry bag is on us. Or we pay an extra few bucks, every time we buy.

And many other problems like parking, etc are universal.

Why grocery retail is a great online opportunity for consumers

1) We are saved from the big list of issues right above
2) In grocery purchase, little tiny discounts are a good drivers of shift. Online can play with this better and provide wide savings to the consumer.
3) Online can provide a very fast, easy, proactive, and engaging experience of buying online. It can actually be fun!
Searching, browsing, sharing lists, making lists, doing all the maths for tiny little discounts, changing the mix, all can be easy and fun online.
4) Repetitive purchase can be a heaven. One click order of monthly refills, right from his/her mobile which driving home and suddenly catching up with the moment of truth of buying grocery. The dude becomes a superman for the lady of the house.
5) Home Deliveries, no BYOB, no nothing.
6) Cash on Delivery – anyone can pay.

and the list goes on.

Why Grocery retail is great opportunity for retailers

1) Happier consumers

2) Technology tells you all about consumers, you can even predict which household is going to be needing a cardiologist very soon based on volume of consumption of fatty oils.

3) Making them more happier by understanding their needs, providing them personalized offers.

4) Controlling shift – changing shelf mix is an important aspect for profitability of a retailer. This can be done more proactively and easily using online communication, by displaying aggregated offers, intelligent product combos (products not always need to be physically tied together)

5) Saving on cost of operation, large real estate rentals, salaries of unproductive staff.

6) High long term relationship with customer, enhanced loyalty, with continued purchase. Easy to implement reward system, more convenient for consumers, no carrying cards, remembering number etc.

7) Lack of retail penetration – one of the strong points for eCommerce in India is an opportunity for quick penetration.

8) Consumers are eventually going to adopt this medium, hence the market shall grow bigger, it is important for retailers to be prepared for same.

Why is online grocery still nascent in India?

For this we need to build on core characteristics on grocery retail

§  Grocery deals in large number of products, items, variants, brands, etc

§  Most of these products have an expiry date. For fresh products the expiry is a few days

§  Above all making stocking, inventory is a complicated and resource intensive work

§  On the other side, consumers need the goods at almost same time, day or may be next day

§  Hence the distribution needs to be closer to the customers, requires high investment, time and resources

Over all, the business requires higher investment, requires near customer touch point, and deals in time sensitive inventory.

As a consequence of same, the online grocery businesses is an unlike eCommerce model.

§  Businesses have grown city specific

§  A lot of these businesses are riding on local grocery retail shop as end point of delivery

§  The deliveries are done in milk-run cycles schedule within 3-4 slot

§  Delivery transportation is in high controlled environment of on-line grocers

Above model makes this business less scalable, requires high patience at start, and needs organic growth for a long period until the player has cracked following templates

§  How to launch a new distribution hub

§  How to setup transportation milk run in new city

§  How to Launch in a new city

When this template is ready, executed successful a few times, the on-line grocer is ready to scale.

Indian On-line Grocers are still in the build up phase, hence the industry poses a significant opportunity but is still nascent.

Below is a table by Money Control that has aggregated around some of the different online grocery stores available in India, showing the limited reach of online grocers.

Why the opportunity is bigger for offline retailers?

As highlighted above, the online grocery business operates close to local touch points, it is one of the unique eCommerce opportunity that resonates greatly with offline, both in terms of growth and maturity.

Hence offline players have a very strong edge over this business, they just need to think fast and create online layers over and above their existing retail business.