We saw our business double through the pandemic: Jatin Gujrati, Vedix
While the global pandemic has bought economies to a halt and massively disrupted businesses, it has also fuelled start-up dreams and we even saw several Indian start-ups achieve Unicorn status during the pandemic period. The times have never been better for the budding entrepreneurs to give wings to their start-up dreams.
The Government, too, has come up with various schemes to support its ‘Vocal for Local’ drive. A case in point is the recent Rs 1,000 crore Start-up India Seed Fund announced by Prime Minister Narendra Modi during the Start-up India International Summit 2021 held earlier this year.
Adgully is turning the spotlight on the entrepreneurs who fought against all odds to bring their dreams to fruition in our special series – START-UP STARS. We at Adgully wholeheartedly support the ‘Vocal for Local’ movement and over the next few months will be featuring all local/ homegrown businesses, brands and Apps.
Globally, consumers are moving towards customised personal care and are buying products based on natural ingredients. Vedix, with its roots in customised Ayurveda, embodies those concepts and creates products for global consumers. Vedix is founded by Chaitanya Nallan, Co-Founder & CEO, Sangram Simha, Co-Founder & CMO, and Veerendra Shivhare, Co-Founder & CTO.
In conversation with Adgully, Jatin Gujrati, Business Head, Vedix, speaks about the concept of customised Ayurvedic formulations, creating a deeper engagement with the customers, how digital commerce has taken off in the country, and much more.
What need gap did you want to fulfil with your start-up? What is the core business proposition?
Most personal care products take a one-size-fits-all approach, which leads to a sub-optimal customer experience as only 25-30% customers see any benefit and majority are indifferent to the products they use. However, at Vedix we firmly believe in customised Ayurvedic formulations. Ayurveda is a 5,000-year old concept that lends itself beautifully to the idea of customisation. It believes that each individual is unique based on the doshas they are born with. We have leveraged this concept to create a detailed questionnaire that understands the dosha profile for each customer and recommend products that are suited to them. Our in-house Ayurvedic experts pour through texts to create a questionnaire that closely mimics an offline consultation and technology allowed us to build that to scale in an online format.
As a result, we have repeat purchase rates that are 2-3x the industry average. This serves as a validation of our unique value proposition and as an entrepreneur, gives me the confidence that we are building something really meaningful at scale.
Beyond the first purchase, we also engage with customers through follow-ups and regimen reviews. This data feeds into the product iteration and development cycle and thus, creates an infinite loop of building products that keep getting better over time.
How did you identify your TG? Did you carry out any feasibility study prior to starting your business?
Vedix as a brand is part of IncNut Digital, which also owns and operates two women-centric digital media platforms – Stylecraze.com and Momjunction.com. We have promoted multiple personal care brands through these platforms and have subsequently engaged in collecting feedback on usage through large scale surveys. Most of the responses pointed us towards the fact that the customers were not happy with generic personal care products and rather yearned for something that works better for them. Based on this data, we formulated a panel of Ayurvedic experts to help us create products suited to individuals by leveraging Ayurvedic principles of customisation.
What were the challenges that you faced in your start-up journey and how did you overcome them?
When customers come on the Vedix platform they have to take an assessment quiz, which helps us understand the imbalance in one’s current state of dosha (Vikruti) and recommend the products suited for them. The analysis page not only shows the recommendation, but also talks about each ingredient and why they are relevant to the customer. When we launched, we had to build awareness as to why the quiz is important. But once customers saw the impact of customised products vis-a-vis generic personal care products, it became much easier to get them to try Vedix.
Over the last 3 years, more than 3 million customers have taken the quiz and we have shipped more than 1.2 million orders. As a brand, we have industry leading repeat purchase rates, which is a testament to the product quality and our ability to match the right product to the customer. A large part of this was built by leveraging tech as we have a fully automated customer journey, right from first purchase to follow ups, product change recommendations, regimen review, and renewals. This has helped us scale significantly in a short span of time.
What were the clearances that you required for your venture from various authorities?
Department of AYUSH, Hyderabad.
Funds/ finance is the prime issue for almost all start-ups. What can the industry and the Government do to address this issue and ease the capital requirements of start-ups?
While the funding ecosystem has evolved over the years with multiple early stage funds, the Government should offer tax rebates and subsidies to make it easier for start-ups to scale. For D2C start-ups, prototyping requires time and monetary investments. The Government could support in that area as well by setting start-up cells with facility to rapid prototyping.
Earlier this year, Prime Minister Modi announced a Start-up India Seed Fund. How do you see start-ups benefiting from it?
I think the fund will definitely help young entrepreneurs with a good, scalable idea get off the ground and get market validation. The whole ecosystem benefits when new start-ups are incubated and seeded and any move in that regard is always welcome.
How is digital helping you further your business?
Digital commerce saw its best year in 2020. As lockdown ensued, consumers flocked to platforms and online brands for their everyday consumption. We saw our business double through the pandemic and the momentum that we built last year continues in 2021. For Vedix, the only way to build a large scale capital efficient business is by being digital first.
And thanks to mass adoption of smart devices and growing broadband penetration, we are finding customers in the deepest corners of the country. In fact, more than 60% of our sales come from Tier 2 and beyond. Thanks to digital, consumers from far reaches of the country are able to experience products that are especially formulated for them. I think this is just the start and we should expect a tsunami in digital commerce as consumer acceptance grows. The way digital commerce has taken off in other countries such as China and the US, we should expect the same trend in India. Digital penetration is expected to grow from low single digits to high double digits in the next 5-7 years.
Another opportunity that digital offers for a brand like Vedix is that it allows us to expand geographies with limited upfront capital investments. We expect to be available in more countries in the next 6-8 months.
What were your key learnings from 2020? How do you see the start-up ecosystem progressing in 2021?
The year 2020 brought into focus the importance of a robust supply chain. When lockdowns hit, the entire supply chain got affected and prices of basic inputs soared. But our team was quick on its feet in arranging alternate suppliers and ensuring a scenario like that does not repeat again. Thanks in large part to that we faced no major issues in the second wave from a supply perspective. In 2020, we only sold through our own website and that impacted sales when lockdown ensued. But today, we have expanded our distribution channels and are now available on Amazon and will be available on other platforms soon.
For the start-up ecosystem in general and for D2C companies in particular, the key focus area in 2021 will be on working with local suppliers to ensure a robust supply chain. Overall, I see the whole ecosystem flourishing. There is more funding available now than ever, there are plug and play solutions right from incubation to scale and more consumers who are comfortable with buying online. However, we have to stay focused on creating high quality products that continue to earn and further build customer trust in D2C commerce.
What would be your message for the budding entrepreneurs?
The most important thing is to believe in the problem that you are trying to solve, because without it, the ride will feel utterly pointless. Also, always keep talking to your customers.