Prepaid with a twist
Zaggle, a startup founded by eYantra’s Phani Raj, is bringing in an interesting angle to prepaid gifting cards
Phani Raj, founding chairman of Zaggle and Avinash Godkhindi, the company’s CEO, seem to have hit upon a very simple, yet interesting idea. The concept is to gift people something they will like, yet let them make the final choice. This is made possible through a prepaid card that can be used in a particular location. Godkhindi explains with an example, “If you know that the person you are gifting to would love something from The Body Shop, you could buy a prepaid card from Zaggle that can be used at all Body Shop outlets in the country. It’s not a physical gift, yet we believe it makes both the gift giver and receiver happy.”
Zaggle’s website is designed keeping the user in mind. With separate drop down menus to let a user select a prepaid card by occasion (anniversary, birthdays etc.), by receiver (brother, girlfriend), by category (prepaid cards for restaurants, retail outlets, movie theatres) and by city, identifying a gift and completing a transaction is just a few clicks away. This simplicity in user interface design coupled with a wide selection of prepaid cards from 60 different merchants has helped the company clock US $1 million in revenues in the first seven months of operations. The company recently raised capital from venture capital firms, Argonaut and Venture East. The funding will be used to build capacity, create more product concepts and marketing.
Prior to its launch, Zaggle conducted a survey and interviewed its prospective clients and partners to understand market needs. Many of its current solutions were formulated based on this survey. Social media has been one of Zaggle’s most effective ways of making its presence felt. On Zaggle’s Facebook page, which has 13,000 likes, the startup runs a group gifting campaign. A bunch of friends can pool together and gift a common friend a prepaid card.
The varied choice of brands available online has been one of the reasons for its growth. “We make the experience of shopping fun, which is what the merchant wants too,” says Godkhindi. He adds that the company works around the existing systems of its partners, both in technology and sales, thus making the integration process for the merchant with the Zaggle platform fairly easy. The company focuses on understanding the target audience for a particular merchant and crafting solutions for them accordingly.
From a sales perspective, Zaggle serves both businesses and individuals. “Companies are easier to connect with, but we have done fairly well with individual consumers as well – resulting in repetitive business,” says Godkhindi. At present, Zaggle follows an online model and the next phase will be to make it available offline too.
If you know that the person you are gifting to would love something from The Body Shop, you could buy a prepaid card from Zaggle that can be used at all Body Shop outlets in the country. It’s not a physical gift, yet we believe it makes both the gift giver and receiver happy.
The company has offices in seven cities – New Delhi, Bengaluru, Mumbai, Chennai, Hyderabad, Pune and Kolkata. Its current team size is 26 with a good mix of experienced hands to work on strategic aspects and younger, fresher members in its sales and operational teams.
According to UK–based Global Prepaid Exchange, a prepaid industry organisation, the global market potential for prepaid cards was US $400 billion in 2011 and is estimated to be growing at 30 per cent annually. In India, different estimates exist but all numbers point to a market that is at least US $40 billion. While several players want to cash in, the trend is to focus on niche areas thus, giving room to all players to capitalise on the existing market. Of the overall gifting market, the gift cards segment is only three per cent indicating that there is a huge market to tap. For Godkhindi, these statistics don’t matter. He’s focused on building his network of merchant partners and acquiring as many customers as possible. “We’re giving ourselves an aggressive revenue target of Rs. 100 crore three years from now,” he concludes.
Concept in brief
Phani Raj, who founded eYantra for corporate gifting, launched Zaggle in 2011 with Avinash Godkhindi as its CEO. Zaggle’s idea is simple, yet interesting. The company wants its users to gift prepaid cards keeping in mind what the gift receiver will like, yet letting the receiver make the final call on what exactly he or she wants to buy. Today, the company sells prepaid gifting cards from over 60 merchants in India. Its simple website and steadfast focus on execution – be it acquiring merchants or customers – has helped it touch a revenue of US id="mce_marker" million within seven months of launch. Going forward, the company wants to increase the number of merchant partners, sell these prepaid gifting cards offline and continuously delight both merchants and customers.
Zaggle Prepaid Ocean Services
Founder: Phani Raj
CEO: Avinash Godkhindi
Year: July 2011
Investors: Agronaut, Venture East
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