Hyderabad: Price comparison and product discovery service MySmartPrice Web Technology Pvt. Ltd has raised $10 million in second round venture funding from Accel Partners and Helion Venture Partners, as it braces for a surge in price-conscious online shoppers looking for deals in the Internet and offline world.
The company plans to use “large part” of the money to get more local retailers onto its platform, and will invest in marketing the brand and will hire more people to fuel its expansion plans, Sulakshan Kumar, co-founder and chief executive officer of MySmartPrice, said.
MySmartPrice started off comparing prices of products across different e-commerce websites but has recently begun engaging local retailers to list prices of their products (mainly mobile phones) on its platform. Retailers update pricing and inventory over an Android app.
The Hyderabad-based company will enlist 100,000 local retailers across 50 cities over the next 24 months. It currently facilitates business of $2-3 million each month for 1,400 local stores in Hyderabad, Bengaluru and Delhi. It recently began the service in Chennai and expects to launch in Mumbai next month.
“The fresh round of funds will be used to build a truly omnichannel platform which will facilitate users to search, decide and buy any product from any store, whether online or offline,” Kumar said in a statement.
A section of online buyers look for “instant gratification”, meaning they want to lay hands on the products immediately. Some others look for services such as transferring data and contacts between devices or installing television sets—which delivery personnel of online retailers are ill-equipped to do. Local retailers fill this gap, Kumar noted.
But it will be difficult for offline retailers to beat their online counterparts in pricing, said Shiv Kumar Gupta, co-founder and director of IESoft Technologies Pvt. Ltd, which runs Pricejugaad, a competitor to MySmartPrice. Pricejugaad has offline retailers in eight cities on its platform but only 10% of users take offline retailers into account.
Besides, with online retailers like Amazon Inc. offering same-day and next-day delivery options in some locations, physical retailers have to compete hard, Gupta said. Pricejugaad, which raised Rs.1 crore from angel investors in April is in initial talks with investors to raise a “few million dollars”.
Although MySmartPrice charges online players a percentage of commission for every successful transaction routed through its site, it isn’t charging offline retailers for transactions on its platform yet. It plans to not charge physical retailers a commission at least for the next 6-8 months to ramp up enrolment and to allow them to better compete against online retailers.
“Our belief is that over the long term, there will be price fight between online and offline world and at that point, we will be able to make money out of it,” said Kumar. “We believe if we give a unified (platform) to the user, the value addition for the user is really huge. Then we can become a single-destination point where he can go and complete his research.”
About 10 million users visit MySmartPrice every month, bringing in gross merchandise value (GMV) of $120 million. The company plans to increase its GMV nearly 10-fold to $1 billion over the next 24 months. The booming e-commerce market will help it achieve this, said Kumar, in a phone interview.
As more players enter the burgeoning Indian e-commerce industry, buyers will rely on price comparison and product discovery websites such as MySmartPrice to find the best deals on a product. Goldman Sachs estimates the Indian e-commerce market to grow 15 times to $300 billion by 2030, marking a huge opportunity for comparison and product discovery services.
Competitors to MySmartPrice include Junglee (owned by Amazon), Pricejugaad, Compareraja, BuySmaart, Shop Pirate, Buyhatke, Smartprix, Pricedekho among others. Some of them are tying up with local retailers to list their products on their platforms.
“MySmartPrice is one of the largest product discovery platforms in the country. We believe it will continue to lead the space in the future too and are excited with the growth path that the company is on,” Rahul Chowdhri, partner at Helion Advisors, said in the statement.
The company raised $370,000 in seed funding in 2012 followed by first venture capital round of $1 million in December 2013 from Helion and Accel.
It will increase its headcount from 100 to 160 by hiring resources for its product and engineering, analytics, operations and marketing teams.
About 6-6.5 million users (or 60-65% traffic) access MySmartPrice from mobile devices (both mobile Web and app). For better user engagement, it is building a chat interface in its mobile app, which has one million downloads.
“A significant investment will be put into helping solve the product research problem for consumers as well. This will address issues such as researching for consumer durables, store feedback, better product suggestions based on expert reviews, opinions, peer consumer feedback, etc., ” Sitakanta Ray, co-founder and chief operating officer of MySmartPrice, said.
