Online nutritional supplement store Mynutramart.com claims profitability; what is boosting the biz?
When most of the e-commerce ventures in India are struggling to cope with a tough business environment, some companies seem to have it easy. At least, Bangalore-based startup Melting Pot Concepts Pvt Ltd, which owns and operates the online nutritional supplement store Mynutramart.com, is claiming to be profitable.
Started by the Jain brothers, Himmath and Arvind, back in 2009, the company has a manufacturing plant in the same city for developing its own products while its city office doubles up as a warehouse. The current team size stands at 10, including the founder-directors.
Himmath holds a PGDBM in Marketing and Finance from Goa Institute of Management and earlier worked with companies like Indiabulls, Minova Life Sciences and JM Morgan Stanley. Arvind has prior experience in nutrition & pharma manufacturing and marketing, and holds a B. Pharm degree from Rajiv Gandhi University of Health Sciences.
The site, logistics and competition
We were naturally curious to understand how the company broke even and became profitable within a short span. The site currently offers around 800 SKUs (out of which the company manufactures 350 products under 7-8 brands) across a number of categories such as weight loss, condition specific, herbal supplements, bodybuilding supplements, vitamin supplements, minerals, supplements & formulas and diet plans. A total of 70 brands or so are available on the site "the popular ones being BSN, Coach's Formula, Dymatize, Immuzen, Lowkal, Labrada Nutrition, Met-Rx, Nutrex, NutriCare, Optimum Nutrition, Prolab and Muscle Pharm.
Mynutramart claims it is getting 60,000 visitors a month and 2-3 per cent of this traffic is converted to sales. The company also claims that 40 per cent of the buyers are repeat customers.
"Nutrition and supplements is a niche market; hence the traction is low as of now. Then again, apart from the bodybuilding supplements (where the buyers are well-informed), Indian customers don't have that much knowledge about nutrition and supplements," noted Himmath. "Having said that, the fact remains that supplements is a lifelong business. These products have no side effects and people often consume those all through their lives," he added.
In spite of being a niche market, there are other key players in this space including Healthkart.com, Madeinhealth.com, Goodlife.com and Indiasupplement.com, and it will surely spell into tough competition sooner or later.
In terms of orders, Bangalore, Delhi and Mumbai remain the top three cities. The company has also partnered with nutritionists who refer its brands, products and the site to their clients. While the company has its own delivery team in Bangalore, logistics for other pin codes are handled by a number of courier services like Aramex, First Flight, DTDC, Speed Post and Blue Dart.
According to Himmath, the startup has become profitable because it sells its own products, in addition to other brands. "Selling other brands on the site gets us a margin of 5-10 per cent. But this margin increases to 45 per cent when we sell our own products," he said.
The company also acts as a wholesaler (for its own brands as well as other brands) and supplies products to other e-commerce sites. Although he did not name those sites, selling its products on other sites gets the company a margin of 30 per cent. "Such high margins have allowed us to become profitable," added Himmath.
That his family runs an offline nutrition & supplements manufacturing and supply business has also helped things. But it is not the only e-commerce site that sells its own products, as well as other brands (Goodlife.com does the same). So why haven't they struck gold yet?
What's in store?
Mynutramart is looking to raise $1 million in funding, which it plans to use for expanding the product portfolio, marketing and getting more foreign brands on board. It will also look at expanding its business offline, either through distribution or via the franchise model.
When asked about the market potential, Himmath cites a report that states the Indian nutraceutical (derived from nutrition and pharmaceutical) market was valued at $1,480 million in 2011 and could grow to $2,731 million in 2016. That spells big opportunity and one must wait and see if startups like Mynutramart can leverage it to the fullest.
(Edited by Sanghamitra Mandal)