What is the idea?The startup idea is to create a mobile application for online product and price comparison. With the proposed application, a user can either upload the link of any online product or even click a picture of the product available offline and search for the similar product on the application by uploading the image and barcode of the product.
This application will also provide a platform for brands to market their products to the relevant audience at the correct price point.
Market DefinitioneMarketer, a market research firm, has estimated that the e-commerce sales will eclipse 3.5 trillion dollars in the next five years. According to eMarketer, as quoted on internetretailer.com, the Asia-Pacific region is growing faster than any other at a rate of 35.2% year over year, with eMarketer projecting $875 billion in online sales there in 2015. The market size and demand for such services is growing and as on date about 10 million people use price comparison websites in the UK alone, every year.
Competitor AnalysisThere are many platforms which offer price comparison like ShopSavvy and buyvia and there are local players In other markets as well. The user experience and speed of search remains an issue with most of them. They try to sell by showing competing products rather than using an ad engine which is intelligent and changes recommendations on user preferences.
The proposed application will provide the prices of other similar products available in the market, for example, if a person searches for a 42 inch television of a particular brand, the application will also suggest other televisions available and also provide which product has better reviews (based on sentiment mentioned in the review). The application will also help users to search and compare products online that they see at any offline store or friend's place, just by clicking & uploading the photo & barcode. This feature could turn out be a USP for this startup.
Pain Point & Target AudienceThe target customer market for this business is “any user/customer looking to explore available product options for the best value”. The target consumer finds different products in various places that he/she intends to purchase, but it's tough to see which site is offering the selected product at the best price and if there are better options available.
It's not easy for a customer to read every review. A customer would be happy to see a comparison chart with the similar products and a small column specifying what percentage of people have given the product a positive review.
Value PropositionAs mentioned above, the value proposition offered to a customer is the discovery of other similar products and the review of all comparisons prepared in the form of sentiment guide i.e. “what percentage of people have given the product a positive review.” The application will have a data analytics layer where the application will scan the user reviews available on various platforms like Amazon and provide the sentiment about products.Business ModelThe option of price comparison and information about other similar products and reviews will be free for the users. The app will make money by running promotions for displaying similar products. The users will also be able to buy products directly through the app, and the app can charge a commission for every sale made through it.
The e-commerce websites will be able to subscribe to the paid plans of the application, where the e-commerce sites will be provided data about the product searched, and such websites can offer special prices for such products to the users.
The application will also record the data for a certain number of years about prices at which products have been bought, and this could be used to add another data analytics layer for business users for price discovery mechanism.
Way to marketThe first step would be to ensure that people know about the product, and this would happen by spreading the word through social media advertisement and Google AdWords. Another important means of advertisement for this application will be by using the signage's or truck promotions outside the shopping malls.
MilestonesInstead of trying to boil the ocean, the first step would be to identify product categories you want to specialize in as an aggregator. After that get deeper in the selected category, so that the users don't have to surf through multiple sites.
This business needs integration with various e-commerce and other wholesalers of the products. The first milestone will be to sign up an agreement with these sites to pull or crawl their data for comparison.
The third milestone will be to set up the pricing engine, Once the transactions have happened, the recorded data will offer a lot of value regarding finding out the price of products, which would be vital for businesses to price their products right. They will pay money to discover the price points for sale.
Investment Needed For PrototypeFor testing & building the prototype, pitch for raising 125 – 250K USD from angel investors or incubators like 500 startups, Y Combinator or others of similar kind in your country. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology.
Team CapabilityThis model needs high tech capability, and you need an active front end team and an equally skilled server management team to keep your sites response time to the minimum. So one of the co-founders has to be a full stack developer. Otherwise, you will burn thousands of dollar to do the prototype only. The second co- founder should be from channel sales or FMCG background so that you can get the institutional tie-ups done deftly. The third co-founder should be a digital marketing expert so that you can use growth hacking tools to come at the top of the search rankings.
Investors / Expert TakePrice comparison and discovery are not a new business, but the addition of data layer will add to the attractiveness. The Asia Pacific region is seeing a humongous upswing in online purchasing, and this will fuel the growth of price comparison startups. Data analytic has also been a hot cake and may attract a lot of interest from the potential investors.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
