1Mby1M Incubation Radar 2013: Kobster

The Indian ecommerce market has attracted many a retailer. In particular, niche sectors like office supplies that has an annual growth rate of 15 to 20% is attracting quite a few ecommerce ventures. One such ecommerce startup is Kobster.com, a one-stop e-destination for office supplies.

In the highly unorganized office supplies market, Kobster provides an online platform that makes it easy for companies and educational institutes to procure a wide range of office supplies, furniture, customizable stationery and gifts. With doorstep delivery, flexible payment options such as cash on delivery, and the convenience and efficiency of online shopping, Kobster aims to eliminate the need to engage with multiple vendors and end the office supplies procurement nightmare.

Kobster was founded in July 2012 by three college friends, Karthik Ramaiah, Mohan Gayam and Vineet Neeraj. Vineet, a former software developer with Cognizant, manages the marketing and sales aspect of the business. He had earlier launched an event services startup, Yippie, followed by a product startup, ArrayShield.  Karthik, a former Java developer at Cognizant handles all the technical aspects as well as customer support, while Mohan, a former HCL Technologies employee, is responsible for the product catalog and ensuring best deals from suppliers.

Based in Chennai, Kobster has already signed up over 1000 customers for its services. Exclusive to its B2B customers, it provides an online procurement platform for buying, tracking and maintaining their regular monthly orders. It has about 2% – 4% conversion rate from its online traffic, and does substantial B-to-B sales in a direct sales mode.

Kobster offers over 3000 products across over 40 brands ranging from office stationery, electronics, computer accessories, networking components, printer cartridges, furniture, cleaning supplies to vending machines. Prices range from one to one million rupees but they depend on the volume of the order. Its profit margin varies from 12% to 20%.

Kobster’s primary focus is on companies with more than 100 employees. According to its research, such companies typically spend between Rs 100-150 per month on each employee for basic office supplies. Kobster faces competition from Staplesfuture, a joint venture between Staples and Future Group, and eofficeplanet, a joint venture between OfficeDepot and Reliance. However, their main target is blue-chip companies while Kobster is primarily focused on companies with more than 100 employees as well as educational institutes. Some other competitors in the startup space include Delhi-based 1click1call.com and Mohali-based iThinkStore.

The main value proposition of Kobster is the ability to provide all office needs at one place, low prices, easy payment and delivery coupled with convenience in not just procurement but also in maintaining records of orders.

Kobster plans to target educational institutes and hospitals in the future. It also wants to bring in customized catalogs tailored to different industries. Further, to extend its reach, it wants to start its operations in other metropolitan cities.

Kobster is completely bootstrapped by its co-founders who pooled together their savings from their jobs. All their marketing efforts have thus far revolved around SEO and cold calling.

It has been a year since Kobster launched its website and it is now looking to raise some funds from friends, family or angel investors. Neeraj says, “We want to partner with someone who can understand our business and mentor us to grow further.”

This segment is a part in the series : 1Mby1M Incubation Radar 2013