Democratizing the e-shopping experience with GoKwik

In today’s episode, we have Chirag Taneja, co-founder of GoKwik in conversation with Rajat Agarwal, MD at Matrix Partners India, and Sarthak Malhotra, Senior Associate at Matrix Partners India. Through the course of this episode, we discuss the growing need for the one-click check-out product such as GoKwik, what led Chirag to start this company, the early traction received, and much more.

Salonie:

Hi and welcome to Matrix Moments, this is Salonie and on today’s episode, we have Chirag Taneja, co-founder of GoKwik in conversation with Rajat Agarwal and Sarthak Malhotra from the Matrix team. GoKwik is an e-commerce enablement company on a mission to democratize the online shopping experience and increase GMV realization for e-commerce businesses. They aim to solve for hard-hitting problems like return to origin as well as better cash on delivery conversion rate, for e-commerce players including D2D brands.

Through this episode we discuss the growing need for the one click check out product such as GoKwik, what led Chirag to start his company the early traction received and much more.Tune- in.

Rajat:

Hi, everyone. This is Rajat here from Matrix Partners, welcome to Matrix Moments. Very happy to be here with Chirag, founder of Gokwik and my colleague Sarthak at Matrix, our lead our consumer internet and fin-tech investments. And today’s founder, Chirag, actually cuts right in the middle of both consumer internet and fin-technology, so very happy to be here. Also grateful that we could do this in person. We’re all vaccinated and but very thankful that we’ve got this window of opportunity to do this. So thank you, Chirag, for joining us today. And Sarthak.

Let me kick off this session. So, Chirag, you’ve actually started a company before, it was an AI startup. You’ve been a banker back in the day, you’ve done financial services and you’ve worked at a consumer brand. Gokwik one of the hottest startups over the last year we’ve been lucky to be in your cap table. It’s in the middle of all of this, right, everything is coming together. So maybe if you can just talk a little bit about what is Gokwik, what are you trying to build, what was the genesis of the idea I think that will be super helpful to understand.

Chirag:

Yeah. Thank you for having me. I think likewise pleasure is for me as well. You’re right, so starting from post MBA did banking for five years, then post that realized want to be in startups, want to solve some real-life problems. Moved on to do food-tech, AI based company, thought that what to eat is a very high frequency use case. Solved that using technology, ran that company for three years. Then moved to a consumer brand, Bombay Shaving Company, ran that for almost two and a half years. And now third startup and I would say probably the only good thing has happened because of Covid otherwise mostly it has been not so good.

But largely the boom which we saw in e-commerce and there were certain problems statements which I could see while running our direct to consumer brand. That is what led to Gokwik and as it is said that probably as you rightly put it three things have come together. So some amount of fin-tech, some amount of knowledge about how consumer brands are played out, how direct to consumer is going to do, how e-commerce is going to play out which is what has resulted into Gokwik.

So Gokwik, you know, largely we’re trying to solve some very interesting problems but from a vision standpoint we’re saying can we provide or can we democratize shopping experience across the Amazon versus non Amazon world. That’s largely what we’re trying to solve and of course there are a bunch of plethora of problem statements which we’re going after.

Rajat:

So in a nutshell you’re essentially providing the same shopping experience to consumers on any merchant website which they could potentially get on Amazon or at least from a checkout perspective the same experience that they could get. And all other merchant problems related to that, broadly related to checkout.

Chirag:

Yeah, you’re right. So while payments or checkouts is one of the things which we have started with the idea is that right from if you look at the e-commerce funnel discovery, selection, conversion, retention there are problems across the funnel. And the way to look at it is that Amazon today gets conversion rates let’s say in excess of 9-10 percent. Our world of the non Amazon, non Flipkart world, I like to call that our world, that gets at best 3-3.5 percent.

Rajat:

Yeah. And that’s also like best in class.

Chirag:

Best in class, right. So how do you bridge that and if you don’t bridge that even if we’re super class let’s say in marketing you can’t just make a footprint. And checkout is probably one of the things which come in that play. So probably that’s of course an important thing in the funnel and is also hot today but I see a lot of other things which are broken, which we want to solve. That is how we’re approaching it.

Rajat:

Super. So we’ll come to that. Sarthak, there’s a lot happening in this overall merchant eco-system globally. Checkout, of course lots happening with Bolt becoming a $4 billion company recently. You’ve been championing this at Matrix for a while. I remember wasn’t it a year and a half ago it was the first time you started talking about there is something in this checkout space or overall merchant eco-system space. Can you talk about from your vantage point what you saw or are seeing and also how did you find Chirag. That is also a very, very interesting story.

Sarthak:

I think the first time I came across the whole checkout side of things when I saw Stripe leading an investment in Fast and I was pretty fascinated what this is and then I found myself shopping across a bunch of merchants, right, like consumer brands some in our portfolio as well. And I realized every time I have to go and create an account, I have to go to the payments page and, you know, I just thought this is just like a pain.

But when I spoke to a bunch of people in our portfolio, right, we invest in a lot of consumer brands and we realized that this is leading to as Chirag was saying a conversion problem, right, people just drop off, people just don’t want to fill in all the details again and again and just leave from there. So it really kind of occurred to me that this is a solution with the exclusion of D2C brands and we’ve really been kind of been partners with so many consumer brands at Matrix.

So I thought this seems like a real problem and when I was speaking to some of the folks in the ecosystem, so Shantanu at Bombay Shaving Company is a very good friend of mine. And I just messaged him randomly one day saying how is it going, I just want to like get your thoughts on the checkout. And he said are you meeting Chirag and that’s how -- I was like who is Chirag and that is literally how I found Chirag and incidentally I figured out that we have actually spoken to Chirag for his previous startup as well and that’s how I got in touch with Chirag and that was the start of this amazing journey.

Rajat:

And you made us chase you quite a bit I think. This was September last year, so when we first heard about you.

Sarthak:

Yeah. August to like November-December we were just really Chirag was like I’m building the product please let’s talk once the product is out.

Chirag:

Probably I didn’t have the foresight which Sarthak had. He’s saying he started, he had a thesis 18 months back, I probably was still building the thesis. So I said that okay, let’s wait it out.

Rajat:

No, it was actually remarkable for us also to see a confluence of market, our own belief, great founder, all coming together and that’s why I think it was a no-brainer when we met you to just invest. So but Sarthak again on globally if you look at this space, right, obviously a lot has happened. Amazon if you look at the Amazon eco-system or if you look at even Europe there’s the BNPL players. Amazon itself back in the day used to have a solution which Amazon checkout used to go to other --

Sarthak:

Paypal had a similar one.

Rajat:

Similar one as well. So and maybe question to both of you, what’s happening now in India that something similar could happen now in India. Why is this the right time?

Sarthak:

No, I think I can start and I think Chirag obviously knows a lot. I think for me it was just the explosion of people beyond Amazon and Flipkart, right, like in our early days we’re all shopping on Amazon, Flipkart, probably Nykaa and couple of the other marketplaces. But in the last few months or years at least I’ve come back to India and I realized you’re buying from so many different merchants that it’s just not easy to like create an account. That was like a personal customer problem that I saw but Chirag probably you can talk more about this one.

Chirag:

You’re right. I think at least the way I have seen it is India is a very, very heterogeneous country and even if let’s say Amazon, Flipkart, want to serve all these kinds of consumers it’s very difficult, varying needs, different kind of customer profiles. Hence India definitely will have a very, very large chunk of non-Amazon, non-Flipkart. And that is the bedrock of what we’re building, and we believe that at least we play a very significant, or players like us play a very significant role in ensuring that the non-Amazon, non Flipkart thrives.

So I would say more than building out products etcetera which we’re doing we have a larger responsibility that by building this the shopping GMV grows on the non-Amazon, non-Flipkart world, otherwise people have to still go to offline. Amazon will not be able to service, imagine brands which we’re buying today, sugar, lemons, how will we discover, mostly you’ll have to go offline. So I look at it from that point of view.

Rajat:

No, that’s a very interesting point and I guess you were talking about how Covid has been an accelerant, all these offline brands have just come online like very, very fast. And I know a bunch of them are also your customers now that are beginning to like traditional offline players are coming. So can you talk more about that as in what’s happening over there?

Chirag:

So you’re right, so if I go back to let’s say last year April-May of when -- so people were just thinking whether we should do online, it was probably an option. Post Covid I think everyone realized it’s no more an option it’s a mandate now you have to do. And that is what we have seen now Nike coming out and saying the direct to consumer is going to be their most focused channel. I was speaking to some other enabling e-commerce companies founders they’re also saying that they’re hearing the same thing from offline players that they want to make D2C as their largest channel.

So that’s the kind of push which has happened in the last 12 months from being a non-believer to a believer and to being that this is the largest channel, so which is a spectrum of a jump.

Sarthak:

And, Chirag, you launched in January this year, right, like we were chasing you but I think you went live with the first brand in January, right. So how has merchants responded to Gokwik and how what’s been the feedback till now?

Chirag:

I think the response has been unprecedented, I would say very good. And largely it has been that way because we’re solving some real problems and also supported by -- because I have been on the other side, I’ve worn the same hat. So I realized that which problems are actually pinching pain points and which are not, which can be solved by merchants themselves which cannot be solved by them.

And hence we’ve gone out solving some very difficult problems largely from which required deep tech, deep data science expertise and gone out and solved them and have seen very good traction grown 50x in the last 6-7 months and continued to grow on that pace I think. Continued to solve some of these difficult problems as we move ahead.

Sarthak:

And Rajat, you’ve been one of the first investors in Razorpay as well and seen that journey very closely. How do you compare their journey with what Gokwik is going through?

Rajat:

I think there are two three, it’s actually very similar. We were lucky to be seed investors in the Razorpay back in 2015, I think two-three things are very similar. One is the product focus, Razorpay is just known to be a product company and I think whatever we’ve seen at Gokwik so far has just been the focus on product and almost like a no brainer product for merchants to start with is just very similar.

Second is timing, right, like we’ve chatted about how this seems like a very good time to build a company like this in India which was similar in the case of Razorpay as well where e-commerce was just taking off. Now e-commerce has taken off and but the problems that are next level problems, earlier payments was a big problem to solve for, payments, success rates all of that. Now different types of problems of conversion rates which are potentially harder to solve for but still very relevant.

And because of this timing and a no-brainer product or go to market both companies have taken off, right, so even back then I remember it started with lots of smaller merchants who would just sign up. I think in your journey as well it started with some smaller merchants but very soon came the mid-tier or mid-market and within a couple of years the enterprise customers also came. So we’re seeing some version of that, probably it’s a little bit more even accelerated now that I think some of the largest D2C brands are also coming to the platform now.

Chirag:

Yeah. So we have almost some very large ones signed up going live. So Mama Earth is there, Man Matters is there, recently I signed up boAt, Noise, so we’re seeing traction and while what you’re commenting I think great admiration for what Razorpay has built out I think fantastic company. And a lot of people ask me that because we’ve just started out solving some of the at least the payment pain point but I think we are very, very focused in terms of building out a e-commerce conversion rate company.

And I believe that e-commerce is much, much greater than payments, lot of the funnel problems are there. And if you look at it fundamentally from a building a company point of view also I think if I were building a payments company it is built for very, very large scale. Hence the DNA becomes very different.

E-commerce conversion rate company is very, very data science heavy company and in our company if you ask someone that how many people will move from add to cart to this and so the specialization in AB testings. Those become core DNAs for us.

Sarthak:

And Chirag I know like people like Fast and Bolt also solved the fraud problem in some shape or form, the charge back fraud in the US that problem obviously doesn’t exist in India because of 2FA. Are there any India specific nuances that you’ve built into the product or any India specific problems that you’re touching with the Gokwik?

Chirag:

Yeah, of course. I think we are doing a very, very India specific solution play. What we realized was that India is a heavy cash on delivery market, has an underlying risk segment which is difficult to solve mostly centered around the consumer. So we’re solving that through building out a very proprietary data science risk models to solve for that. Very specific problem to India and you’re right that the charge back fraud problem doesn’t exist in India.

That’s I think very, very specific to India, in fact we’re doing some amount of problem solving on the UPI part as well in terms of solving it more from an e-commerce lens point of view rather than not from a payments point of view. Solving for merchants in terms of how does their conversion rate look from a UPI point of view, how can they increase prepaids through us. That’s how we’re looking at it.

Rajat:

So on this India specific problem you alluded to this returns RTO problem, how do you even solve for that, isn’t this like Flipkart’s tried to do some of this. Can you actually solve for it, skeptics will say this can never be solved.

Chirag:

That is where start of the born, right? typically people would say these are not to be solved. We look at US, Squire said that they wanted to build out credit cards for people who can’t afford. So I think that is where the opportunity lies, and the way at least we’ve looked at it is that the problem I would say cannot be brought down to zero percent and hence our business model is also made that way that we don’t want to get it down to zero.

But at least there are certain fraudulent elements of RTO percentages that we want to solve for. At least we want to make people aware that this results in so much amount of losses, leads to carbon footprints. Some of those environmental damages etcetra which people are not aware about today. So we believe that from an industrial perspective this can be definitely be brought down by at least 35-40 percent which is a significant number. You can imagine a 25-30 percent of all COD transactions become RTO.

Rajat:

Yeah, it’s massive. And if you add returns on top which is also a large problem it’s like apparel companies like 30-40 percent is just returns and RTO maybe little bit on top.

Chirag:

And these have to be solved because otherwise unit economics for such companies will never make sense.

Rajat:

And to your point there are lot of these -- once these traditional guys are also coming online they just can’t solve it themselves. And guess what, probably the largest chunk of commerce is still with them.

Sarthak:

I think skeptics will probably also say that, you know, and I also used to think about it sometimes that isn’t this consumer brand a very tiny slaver of the market. But I think you’ve shown that it’s just not those that using Gokwik. Can you just talk about people beyond consumer brands who have just picked up Gokwik and how that response has been?

Rajat:

Like any consumer marketplace how is this relevant even for them?

Chirag:

Yeah, so we saw one of the large marketplaces, Limeroad, starting to use our solution. Some of the offline brands. In fact now we’re seeing some of the grocery brands also, new age grocery brands starting to use us for different use cases we’ve evolved to them. So that’s happening and I can tell you that we’re in active discussions with 4-5 large marketplaces and hopeful that they should get converted and we should go live in the next quarter also.

And largely to your point that we realized that anyone who even has the wherewithal to go out and solve for it let’s say a vertical marketplace will only have data with respect to only their vertical. Whereas solving for such a problem you require network data. So a Flipkart or a Amazon can solve for themselves because they have this network of data across categories. You would want someone to come in and then solve for this network. That’s how we’re approaching it as a problem.

Sarthak:

Chirag, you also touched upon a few things that have -- you know, COD, RTO, UPI, conversion funnels. Like there are two or three products live today. Can you give us a glimpse of what’s coming in future, what are you trying to build in the next 2-3 years or like 5 years, what’s that Vision?

Chirag:

That’s an interesting I would say and a tough one also.

Sarthak:

We discuss it in the board meeting every time so --

Chirag:

Yeah. I would say we’re in a very, very interesting juncture wherein there is on one way there is a trend which is booming is fin-tech, one is e-commerce non-Amazon, non-Flipkart world is booming. Offline to online is a channel which is itself is a booming channel. So I would say that one axis we would like to at least think about is go deeper with merchants, continue to solve their problems which relate to our vision of we want to increase shopper GMV whether it is in the form of available capital or getting them the right capital at the right cost. That also helps them increase GMV or improving conversion rates.

That’s what we will typically continue to focus on while we also realize that there are opportunities in terms of building a lot of other stuff on Shopify. So a Shopify can itself become an independently large company, that’s one axis. And then of course later on there are certain consumer aspects which you might look at in very, very long term. But typically we want to build out a company which is very merchant focused, we want to always play for the merchant, a route for their success, that is what we’re building for.

Rajat:

And as you said there were adjacencies on the consumer side which we may get to at some point of time. But focus is on merchant.

Chirag:

Yeah.

Sarthak:

Chirag, also I think just switching gears to how you’ve built your team, right, and the team is obviously both co-founders, employees and hopefully us as well. How do you think of it, you’ve been very thoughtful about it, so how do you think about -- what do you look for when you were getting your co-founders or when you were choosing between investors or choosing when you’re getting some employees can you just give a little bit of flavor there?

Chirag:

Okay. So at least I didn’t want to do mistakes which I’d seen other people do or I had done myself. So at least I wanted to make some fresh mistakes, so I thought at least --

Sarthak:

That’s why he got us.

Chirag:

So I think both Vivek and Ankur, I think we realized that we want to build out a core tech data science company. Hence wanted to have co-founders who have this deep expertise, have done a lot of work there. So Vivek and Ankush, Vivek was CTO and Ankush was heads Data Science, has done extensive work on both the fields. Ankush has worked a lot on Data Science decision making with Flipkart, American Express, Ogilvy, so a bunch of different problem statements I think that’s why he is there.

And Vivek is there because he’s worked on probably 10x scale of what payments would do, he’s built a large company in Ed-tech. So that is why he fit the criteria. And of course, I wanted to bring in people more for their professional expertise than being friends. So tough call but I think I realized that it’s easier to do with people who we know that will contribute to the company. If they happen to be friends it’s great and now I think we’re all friends, we know each other for a while now so that’s how we’ve been going about it. At least in my head there is some structure I don’t know whether there is.

Rajat:

And even for your angel investors I remember back in the day you were very thoughtful about who to bring on as an angel investor. How did you make that choice?

Chirag:

I think so some of that happened automatically so Revant and Varun they loved what we were building hence they joined in. And Jiten of course was a guiding force in terms of when I went to him about GTM for the first GTM he said that I should work more. Similar response was by Amit Lakhotia also. So he said Nitin I had heard a lot about from fellow co-founders that he’s great and he’s been truly of great help.

Utsav I would say he’s been a day 1 believer in what we’re building so one phone call and he was blown away with what we were building. So he’s been a day 1 believer. I think I would say probably at least in this case things have worked for us more than being thoughtful here. I think people have liked what we were building, they see that there is an opportunity and I think of late Anurag has been of super help, OneCard founder. I think he’s been of super help to me.

Rajat:

And it’s I think a lot of them run consumer brands like Revant runs Mosaic, Varun runs Mama Earth. Yeah, there are others as well, right, other consumer brands obviously Shantanu. So I think that’s -- has Mama Earth gone live?

Sarthak:

Yeah. You said they have. That’s great.

Chirag:

Maybe this part Varun should definitely hear.

Rajat:

Absolutely. And Chirag from a team-building perspective also you’ve taken this call that you will build a remote first company at least to start with. How did that happen and how has that played out so far?

Chirag:

So I think in our case it’s a little unique that the company itself was born during Covid. So we’ve never seen an office. Most of the recruitments have happened in Zoom, in fact our rounds have happened in Zoom. So you can imagine probably that’s the way we’ve seen this company.

Sarthak:

I think our Delhi office is their de facto office.

Chirag:

So I would say it’s probably a little easier for a company which was born during the pandemic than if people had history of coming to office. For us I would say people have never felt the need that they need an office to be more productive. Of course, there is a need to be at the office, have more chemistry, alignment of thoughts, that’s there. And at least I’ve had a personal belief that there is going to be -- this trend is secular now, people are going to work remotely or work from anywhere and great people will work for companies which are remote because it gives you more freedom. Hence my view is that in five years there’ll be Delta in those companies also because of talent. So that’s my thesis and I’m playing for that thesis.

Sarthak:

I think you should let Avnish know that as well. I really wanted to work from the mountains but here am I. Great, I think just to wrap it up any other thoughts for our viewers for people who want to start up in the consumer brand space or in the fin-tech side of things. Any parting thoughts for them?

Chirag:

I would say Matrix has been a great partner, I would say it’s been a six-month journey so it’s still the start but I think the way we’ve worked together as a team I think that’s commendable. So it’s not a very, very formal relationship wherein you’re an investor, we’re a founder. I think that I would say we’re blessed to have you on the cap table and work along with us in building this company.

Rajat:

The feeling is mutual, boss.

Chirag:

Thank you.

Rajat:

With that we come to an end of this episode. Thank you so much, Chirag.

Chirag:

My pleasure.

Rajat:

It’s always a pleasure chatting with you and hopefully we’ll continue to live up to your expectations.

Chirag:

Same here.

Salonie:

Thanks for tuning in. For more Matrix Moments episodes you can head to www.matrixpartners.in/blog. You can also follow us on Twitter, LinkedIn and YouTube for more updates.