Yevgen Sokolnikov and Oleksandr Danylenko, two Ukrainian friends, had been observing the growth of digital business in India for the past few years.
Sokolnikov, a serial entrepreneur and an industry expert in e-marketing and e-commerce, had been running one of the biggest e-commerce websites in Ukraine for 13 years. Simultaneously, he had also been running a similar project in Georgia named hotspot.ge for two years.
Danylenko had gained experience working in different managing roles for six years in the biggest auto components distributor in eastern Europe – Intercars.eu. Later, he embarked on the path of entrepreneurship and participated in several projects in the spare parts sector.
They noticed that the Indian online market was booming and decided to become part of the growth.
In 2015, they finally visited India with the aim to start a business around e-commerce. During their research, they found that the auto spare parts industry was not well organised and held huge growth potential if it was digitised to offer products to customers in a timely manner.
The same year, they decided to launch a marketplace in India where users could buy and sell auto components.
“The objective of launching the platform was to provide clear and transparent offers for genuine auto spare parts,” said Sokolnikov, Founder and CEO, Boodmo.
He explained that the website sells products from different suppliers but does not promote any particular supplier. The spare parts which are available on the website are sorted by producers’ information and filtered by customers’ choice. On real-time basis, every day new products with actual price lists appear.
The platform sells spares such as service parts, lubricants, brakes, suspension, electrical components, steering, fuel supply system, air conditioning/heaters, wheel drive, exhaust system and other automobile products.
Besides, it is also planning to introduce fulfilment centres and adding additional products such as tyres, oils, tools and spares for commercial vehicles.
The company does not deal in any kind of accessories and bike parts.
Not an easy task
Boodmo began operations with an initial budget of $2 million, which it utilized to mobilize the business. In the first year, all expenditures were made towards software, database development and catalogue creation.
“The first year was spent in building the foundation and launching the platform. We have spent a lot of time meticulously preparing the online catalogue for spare parts and listing the genuine suppliers. To execute the business smoothly we also spent a lot of time in training and teaching the workforce,” said Sokolnikov.
Market catches up
In the car spare parts market, which is worth $4 billion in India, Boodmo is trying to make revenues based on margins from vendors’ sales.
The platform’s business matrix operates on the number of orders received, conversion rate and share of cancelled or returned orders. The idea is to serve customers with the best possible effort which is also reflected in the retention rate.
“The demand for online auto parts in India is deemed to grow by 10 per cent in this fiscal. Our aim is to reach 300 orders per day by December 2017,” said Sokolnikov.
He said that his customer retention ratio is more than 30 per cent. The platform only deals in genuine auto spare parts and offers more than 1,000 national and international brands, which gives them an edge over other market players.
It has also attracted Rs 10 crore of FDI, till date.
Not wary of competitors
Besides Boodmo, there are platforms such Spareshub, Autosparepartsindia, Motorpart and Industrybuying in this segment.
But Sokolnikov considers his own platform unique. “We have an excellent retention rate of customers who have used our services earlier. In addition, we provide free website usage without any subscription fees, which leads customers to believe that we are here to serve with openness. Besides, suppliers have their own interface to manage their products which gives them a tool of empowerment to manage their inventories.”
Yet, there are challenges
The challenges for Boodmo come from various factors. Customers are uneducated and unprepared to read spare parts’ catalogues and only rely pictures. Vendors are not prepared to work online and dispatch many small packages, and managing inventory is another challenge.