Payments firm Instamojo said on June 8 that it had launched an e-commerce software platform aimed to help small to mid-sized consumer brands set up an online presence, along the lines of Canadian firm Shopify- currently worth $150 billion and among the hottest new age software firms.
Instamojo currently helps small businesses- say arts and crafts websites, niche brands and YouTube channels collect and process online payments. It now wants to help these businesses with their online retailing plans as well- helping with e-commerce software, branding, marketing, logistics and analytics.
“In the last three-four months we have acquired 50,000 merchants on this new platform. This is also why we acquired digital commerce firm GetMeAShop earlier this year,” Sampad Swain, co-founder and CEO of Instamojo, told Moneycontrol.
Helping small businesses go online and set up a digital storefront has been a hot theme in the Indian startup scene recently, with at least half a dozen startups, including DotPe, Dukaan and M.Paani addressing this market. However firms like Dukaan are catering to grocery stores and small retailers in the hinterland, a space Instamojo has avoided so far. Further, Instamojo already makes money from each of its e-commerce customers, charging a $100 (Rs 7,500) flat annual subscription fee, similar to Shopify.
“You will be surprised how big this market (for taking brands online) actually is. We have seen a retention rate of 90-95 percent. That tells you brands have really been looking for a solution like this,” Swain said.
Instamojo works with consumer brands whose annual revenue ranges from Rs 1 lakh to Rs 1 crore per year- the lower rung of digital-first brands compared to upstarts like Mamaearth and Wake.fit which already have hundreds of crores in revenue. The e-commerce software business is currently growing at 10-15 percent month-on-month, Swain said.
The e-commerce platform puts Instamojo directly in competition with Shopify, something Swain acknowledges. “We are the upstarts who want to capture this market away from the 800 pound gorilla. Indian businesses don’t want a one size fits all solution. I think they want customization and someone who understands the Indian market. That’s what we bring to the table,” Swain said.Instamojo did not disclose its revenue but said it has an annual Gross Merchandise Value of Rs 2,500 crore for its payments business- which is the volume of payments flowing through its platform.