Wishberry: An E-com Startup Betting Big On Social Gifting
Social gifting is usually considered a token of appreciation and an act of thoughtfulness. Yet, it can become an irksome task when one has to hunt for a unique gift which will be well-received. On the other hand, if you are a recipient, you might be literally wallowing in run-of-the-mill photo frames, ornamental vases or wall hangings. But the two-year-old startup Wishberry.in, run by Mumbai-based Random Motion Advertising Pvt Ltd, aims to change all that and provide people with useful gifting solutions.
The e-commerce venture has ushered in the western concept of gift registry where a gift-getter makes a wish list and passes it on to family and friends. This saves one the trouble to look for suitable gifts as you only need to choose an article from the items already shortlisted. This also ensures that people get what they like or what they require whenever there is a suitable occasion for gifting.
But what has led to the idea of gift registries in the first place? Getting an insider's account from Priyanka Agarwal, the co-founder, CEO and director of Wishberry, tells us why she did feel the need to explore this space. When her sister got married, she received quite a few wedding gifts which she did not want or need.
"My sister's wedding made me realise that there's a huge problem with the gifting culture here in India. Don't you remember getting a tee shirt on your birthday that didn't fit you or getting six bottles of Sula Satori Merlot for your house warming?" queries Priyanka. So the concept of Wishberry gradually took shape and the Wharton graduate decided to give it a go.
Interestingly enough, Priyanka had always wanted to run her own business. She had earlier worked with Goldman Sachs (investment banking division) and McKinsey (management consulting) in New York and Mumbai, respectively. She had even started another venture prior to Wishberry. It was called Innova Materials at UPenn and the firm managed to close $5 million in a series A VC funding last year. The other founder of Wishberry, Aditya Agarwal, is an IIT Madras alumnus and currently works at the World Bank. Aditya is the chief mentor at Wishberry and he, too, has started his own company Kadn Kommunications at IIT Madras.
A user can go to Wishberry site to create an account and then create his/her wish list from the products/brands listed there. This list can be shared with friends, relatives and colleagues by simply importing their e-mail addresses from any popular mailbox. People marked in that wish list can buy the product/s from the site and it will be shipped to the recipient's address. What's more, whenever a 'wish-listed' product is purchased, the gift-getter will receive an e-mail message. In case you don't like the products featured on the site, just create your own gift list and people can send in money for that specific gift. The money will be remitted to your account after a deduction of 7.5 per cent as payment gateway charges.
But the USP of the website lies elsewhere. It actually gives you the option to donate to a charity through your wish list as you can ask for contributions to the charity where you want to donate.
The website started as a traditional gift registry business, targeting the weddings. But founders soon realised that not everyone was ready to ask for gifts via a gift registry site. However, most people were okay with asking their friends to donate to a 'cause.' The 'cause' might involve charities (an NGO like Akanksha or CRY) or could be a personal wish fulfilment, like a couple buying a home or going on a dream honeymoon. And Wishberry pushed both the concepts. The company features the oriented gift registries where couples who don't want gifts, can ask friends to donate the money to NGOs. Then there are the cash gift registries where a couple can ask their friends to chip in for their new home or a honeymoon abroad. Wishberry is also involved in marathon fundraising and claims to have raised around Rs 30 lakh from 1,000-plus donors for the Mumbai Marathon 2012. And next year, it aims to increase it five times more.
One of the biggest achievements for Wishberry so far was a corporate fundraising for Akanksha that amassed close to Rs 20 lakh from donors across the world. Another milestone was reached when Wishberry was distinguished as the most promising startup at the 16th Wharton India Economic Forum. But most importantly, a US website, also christened Wishberry, is being developed along the same line. "When an ex-colleague from Wharton/McKinsey (Miami) approached us to license our brand and technology to launch a US website, it was a very proud moment for us. That we were good enough for a mature audience like the USA really validated what we are doing," recalls Priyanka.
Scope & Competition
According to Priyanka, the gift registry space is currently driven by the huge and booming Indian wedding market as the new trend seems to be catching on. As for charity donations, another hot category at Wishberry, again the market is booming with new marathons coming up every year. She quotes a certain study according to which the Indian wedding space is worth about $40 billion and even if gifting happens to be 2-3 per cent of that, it stands to be a huge $800 million.
Wishberry, however, faces stiff competition from other companies as social gifting in the country seems to be coming of age. The online gift registry market in India includes key players like Shareurjoy, Lamhe and Indiagiftregistry.com.
The startup follows a multi-pronged revenue model, broadly featuring two categories â€“ fundraising for marathons and gift registry. When working for the fundraising segment, it keeps a small percentage of the fund raised as operating margin. Additionally, the company charges its partners (marathon organisers, NGOs, corporate houses, etc.) a set-up fee upfront.
For the gift registry part, Wishberry keeps a percentage of all funds transferred through the company. "For example, if someone gifts $100, we keep, say $10, and the NGO or the couple gets $90," clarifies Priyanka.
"We charge our channel partners, NGOs, stores, etc., an upfront set-up fee of around $100-$300 to create a custom template for all their clients. Plus, we charge a monthly maintenance fee of $20-$50 for marketing and customer support. Finally, while the gift registry is free for customers, we do charge for customisation and personalisation," she adds.
Fundraising & Future Plans
Currently a small team of four, with Web development being outsourced, Wishberry has already raise seed funding from an undisclosed investor and targets a series A round of funding for further expansion. "We are seeing great traction with 2000-plus registered users. We definitely want to scale up on this and are looking for funding for our expansion plans," affirms Priyanka.
Although one would say that this is the best time for e-commerce start-ups to attract investors' interest in innovative ideas, most of the early-stage backers seem to be a bit wary when it comes to funding too novel a concept. According to Anil Joshi, vice-president of Mumbai Angel Network, "New ideas are always commendable but business depends on how one executes that idea." While Joshi would not mind investing in such a venture, he would surely like to see how the owners are handling it before taking things forward. "Implementation is the key to business success and if an idea is implemented well, no investor will shy away," he adds.
It's undoubtedly a novel initiative in the Indian context and according to Priyanka, the promoters are keen to push the charity part of the business â€“ so that people who want to donate to NGOs as part of their celebrations will find Wishberry even more useful. The company is also looking to partner with marathon organisers of all kinds â€“ Patna Marathon, Joy Run, Auroville (helping a South Indians medical college to raise money through a private run in October), Hyderabad Runner and many more. For the gift registry part, marketing via social media, strategic partnerships with wedding planners, tie-ups with wedding venues and other such initiatives are on the cards.
Wishberry is, however, far from happy with the current payment gateway systems. Priyanka actually cites it as the biggest challenge that the company is now facing. "Payment gateways in India are terrible. At least 20 per cent of the transactions fail because things are not working properly. And right now, that's the biggest hurdle for us," she points out before signing off.