This Dubai-based start-up broke even within seven months of starting the business

March 24, 2023 | By Rupkatha B

This Dubai-based start-up broke even within seven months of starting the business

Research indicates that the global bar and wine accessories market was valued at $2.24 billion in 2020 and is expected to expand at a CAGR of 5.2% from 2021-28.

Meanwhile in the UAE, which is becoming an increasingly popular entrepreneurial nation, 42,640 new business licenses were issued in 2020. Add to that pandemic driven restrictions around socialising that led people to spend more time and entertain at home.

All these factors including growth potential, ease of doing business and pandemic-driven opportunities created the perfect storm for a founder who started an online business offering glassware, barware, tableware and games.

A pandemic baby

Founded by Urvashi Deshpande in 2020 Bar-Enthusiast is a bootstrapped business that broke even within seven months of launch. During the first two years (2020-22) the start-up grew at a CAGR of 230%, launched 250+ SKUs, acquired over 8,000 customers, recorded 300,000 website visits and witnessed over 34% customer retention rate with ~3% conversion rate online.

In a conversation with RetailME Deshpande spoke about not only setting up and growing the business but also navigating challenges along the way. A particular challenge that she continues to face is being one of the very few women operating in a space that’s largely male dominated.

As a start-up what kind of challenges have you navigated?

A start-up journey is usually like a rollercoaster ride and mine is no different. When we think of business challenges, inventory, supply chain etc come to mind. But for a start-up, challenges range from opening a business bank account to getting a payment gateway; and of course, hiring talents. Another less talked about challenge is navigating the mindset of people around us (friends and family) when starting on an entrepreneurial journey. Leaving the safety of one’s job that’s applicable in my case and venturing into an unchartered territory is always scary. When people around us are not bought into that vision but wish the best for us and recommend taking a safer path of just continuing a job it can be unnerving because we are not only trying to prove something to the world, but also to our near and dear ones.

How much investment did you make to get the business off the ground?

My overall budget for license, inventory, storage and business setup was slightly over AED100,000, but I ended up investing approximately AED135,000 mostly due to higher inventory spend.

What are some key innovations that you’ve undertaken to ensure a seamless, personalised CX?

Very early on I discovered that the reason people buy from a small business versus a big online marketplace is the personalised service that they can get and the consultative selling that they expect. People want to talk to me, get my inputs, get an expert opinion on the items that they want to buy and if it would be good for a gift or how to use. Looking at these various use cases I realised that conversational commerce is going to be a cornerstone for Bar-Enthusiast. So, I integrated WhatsApp for business in 2021 which was a game changer. A high rate of abandoned carts was replaced by increasing incoming purchase queries. In addition, easing the payment process customers receive a payment link on WhatsApp rather than having to visit the website and add products to cart. I’ve also integrated WhatsApp order confirmation for cash on delivery orders therein reducing nondelivered return rate to benchmark levels. All these have immensely improved user experience.

Technology if leveraged well can drive great experiences. How do you leverage technology in your business?

I use Shopify to manage inventory and overall business reporting and since business decisions are completely data-driven my key focus areas include:

  • Average order value (a combination of the average selling price of goods and basket size): I keep a close eye on this and introduce strategies to uplift AOV as it has a direct correlation with my total revenue. If the number of visitors drop, AOV is still something that I can influence by promoting cross-sell and upsell tactics to compensate for revenue loss due to a shortfall of traffic.
  • Source of traffic: Shopify helps me to understand which sources of traffic are giving me best results and lets me double down on that channel. For instance, if I do an Instagram ad or SMS or influencer driven campaigns, I know exactly which channel has worked for me and what I need to do more of.
  • Inventory and ABC analysis: Shopify has very interesting apps that help me manage inventory, setup alerts and out of stock notifications, back in stock notifications for customers and many more. THE ABC analysis for inventory helps me understand which SKUs are in A category, the best and fastest selling; B category or bestselling; and the remaining under C category. Ensuring A and B categories are always in stock is a top priority for us.

How are you making your last mile experience agile and delightful?

The last mile experience is about three main factors and I’ve tried to elevate user experience on all three factors:

  • Delivery time: As a D2C founder, one of the challenges that I face is that our delivery time is compared to that of large online marketplaces, especially in Dubai. Consumers are spoilt with same day, four hours delivery and so on. So, we configured our operations to ensure that we provide next day delivery across the UAE using third-party logistics companies.
  • Communication: While delivery time is crucial, communication is too. Ensuring that the customer is aware that the order has been shipped, receives real-time information on the status of the delivery and friendly customer support on WhatsApp are cornerstone in our last mile experience.
  • Packaging: I sell glassware that’s not easy to deliver. It does break at times despite all the fragile stickers. Hence, care while packaging and use of high-quality materials are key. Customers click pictures of the packaging, the custom cocktail recipe booklet and post on social media leading to positive word of mouth.

Will social commerce play a key role in your growth strategy in 2023?

Social commerce is going to be everything in 2023. The lines between website UI/UX and social UX are fading. In countries like India where payment system has been integrated to WhatsApp, brands have moved complete catalogues to WhatsApp and the minimal UI is wining. Commerce on platforms like TikTok is going to be something to watch out for in 2023.

Looking ahead, what are your future innovation plans?

Conversational commerce is an aspect that we will be improving on. We are seeing considerable demand among users wanting to purchase over chat instead of the website so we will be upgrading our current WhatsApp business chat support with artificial intelligence integrations, automation of workflows, payment integrations and delivery updates. This will be rolled out during the first quarter of 2023. Another aspect that we are innovating on is personalisation. Users have always demanded the personalisation of products and in some cases, we have done it. Now with use of technology we want to bring it to everyone. I’ve been working with partners to establish a modus operandum to receive customisations and smoothly fulfil these orders. UI/UX is going to be critical in this one. Finally, I’m working on innovating the bulk ordering system. Currently it is done manually and has a high lead time to be able to meet low price points. With the use of data modelling and forecasting, we will be introducing many SKUs with next day availability, and this will be a big game changer for us.

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