How two brothers sweetened their Covid sales

Retailers of all stripes faced a unique pandemic problem in 2020: so much to sell, nowhere to sell it. But for Arjun and Karan Ahuja, a pandemic-induced emergency solution has morphed into a viable “bridgital” business.Brothers Arjun and Karan, 33 and 30, are director and vice president of Flemingo Travel Retail, which operates duty free stores. (Its CEO is their father, Atul Ahuja). “Our family business is travel retail — liquor and tobacco — and we wanted to use our travel retail experience to sell chocolates domestically,” says Karan.With the demand out there, and the stock available, the brothers launched Cococart to connect the two sides of the market. Many frequent travellers could no longer access chocolate at Indian duty free shops and stumbled upon their relentless advertising on social media channels, offering attractive discounts on these high-end chocolates and chocolate affiliate products. And the orders are pouring in, 300-350 a day, they claim. 83275033So, are these the same chocolates that were stuck at the duty free stores? The answer is a firm no since the two businesses are separate entities. “Besides, many of those chocolates had expiry dates of around September 2020, just around the same time our business started to pick up pace,” says Karan.Along the way, they say, they’ve cracked a problem that other luxury chocolate selling businesses haven’t been able to: getting the cold chain in place. They have set up cold storage warehouses in all the major cities it operates in —like one in Delhi’s Samalkha area bordering the IGI airport. The chocolate gets stored there as soon as it arrives by cargo aircrafts. The company sends its orders in large insulated bags with its bike riders that keeps it cold till the doorstep.Several local independent sellers on ecommerce majors like Amazon and Flipkart sell some of the chocolate brands that Cococart, too, retails, for instance, E. Wedel and Whittaker’s Chocolate. But brands like Valrhona and Neuhaus are not available there. Its closest competitors are WeftGrip, Snackstar.in and Mysnack.in, MunchBag.in that are ecommerce channels for imported premium snacks and also sell a limited variety of chocolate like Twix, Milka, Lindt etc.,.“These businesses were obviously not using the right facilities and the cold chain was breaking somewhere or the other along the way. We wanted to fix that and had several weeks of dry-runs to test if we were reaching a customer completely melt-free,” says Karan, whose company is Mumbai-based.According to their internal research, the approximate sales figures of confectioneries in India at two major airports -- arrivals in Delhi and Mumbai duty free — combined add up to Rs 350 crore per annum. “We were focused purely on our sourcing as well as to get our domestic logistics in place,” he adds.According to market research firm, Mordor Intelligence, India’s chocolate market is growing at a compound annual growth rate or CAGR of 12.8% over the forecast period (2016-2026). Another study pegs India’s chocolate market at about $1.9 billion in 2020, making it one of the fastest growing markets. But even so, buyers of these chocolates remain a niche market. Industry estimates suggest that typically imported chocolates have a margin of about 30-50%. That checks out for Cococart, where the average order is about ₹2,000 per cart, making for sales of anywhere between Rs 6-7 lakhs a day. And a much bigger vertical is now in the offing: an offline expansion strategy. The brothers have signed leases on 42 stores, which they plan to open by the end of 2021; 20 of these are already fitted out.

from Economic Times https://ift.tt/34W1nYg