Foodie couple and an online biz delivering sweets, snacks fresh to the door

Mirchi.com serves 20,000 pin codes with a delivery model that promises to bring the delicacies to your door absolutely fresh from across mainland India within 1-3 days

The startup ecosystem has stories galore of entrepreneurs who left cushy jobs to get into businesses they hadn't dipped their fingers into before. But what makes Niraj Mital, now 60, and wife Poornima, 54, stand out is their dive into the online delivery of sweets, snacks and other packaged delectables only because of their love for food, at an age when many others would start planning retirement.

So here's their story. The couple returned to Hyderabad, India after having spent several years in the US, where Niraj had worked as project manager with companies such as IBM and Verizon, among others. "I came back in 2008 for family reasons and because I wanted to look after Magna Infotech, a company I co-founded, and which I eventually sold to Quess Corp a few years later. The existence of a non-compete clause prevented me from setting up another tech venture for three years."

So the couple decided to hang up their boots before the entrepreneurial bug bit again. Both agreed that they shared a love for food--"I'm a good cook, my wife is even better," quips Niraj--and a business in that space was a logical extension. 

Getting started

The two were sure they didn't want to set up a restaurant and felt it made more sense to use Niraj's tech expertise to start an online service aggregating sweets, snack, pickles, cookies and dry fruits from all across the country--with a pan-India delivery model. So by late 2018, Niraj test-marketed a proprietary software he had spent Rs 50 lakh to develop. They named the platform Mirchi.com after his wife's childhood nickname, 'Hari Mirchi'. 

Obviously, such an ambitious plan wasn't without challenges. Niraj says the big guys weren't ready to hop on as they had enough business and because "we don't need you". The smaller guys were reluctant because e-commerce was uncharted territory for them. "So we told them it would be an extra source of business, where they only had to prepare and pack the stuff, and wait for the courier to pick it up. But once the small guys came on board, some of the bigger ones followed," he says.

The other problem was the packaging "The sellers were using smelly, recycled cardboard boxes, whose contents were often damaged in transit. Our model isn't hyperlocal--we ship from Jammu to Kanyakumari. So we had to redesign the boxes. The other problem was the courier charges. A box with 500 grams or one kg of content would invariably weigh more because of the weight of the box, and would invite rates applicable at the next slab," Niraj explains.

To obviate this problem, the Mitals opted for 400 grams of content. Since the sellers invariably kept 500-gram boxes, the Mitals would insert a cardboard sleeve inside to maintain the net weight at 400 grams, and total weight under 500 grams. The sleeve would prevent the contents from moving inside the box and getting damaged. "That said, we do have 500-gram packages also but their share is small," Niraj says. 

The model

Today, Mirchi.com sells about 10,000 products across 12-14 categories. There is provision to list a single product across multiple categories, such as vegan, sugar-free and Jain. The platform is geared to deliver across cities and states. Says Niraj: "We've serviced orders for Panjiri from an outlet called Pehalwaan in Jammu, and Patisha from Bansal Sweets Amritsar, to be delivered to Assam. Our USP is that we manufacture nothing, keep zero inventory and service orders from one part of India to a completely different part. The seller simply prepares and packs the contents fresh within 30 minutes to an hour on receiving the order and waits for the courier to pick it up. The consignment is shipped fresh, without interference in the process on our part." 

Despite handling complex deliveries, Mirchi.com's proprietary software is quite simple, says Niraj. "After the customer has explored our website and chosen what he wants--it could be one product or 10 products, from the same vendor or from different vendors in different cities, in different states--he is taken to the address page, where he can have his goods delivered to (a) a previously stored address (b) any other address or (c) multiple addresses."

Niraj says once the customer checks out and pays, the order confirmation goes to customer by sms and email. The vendor receives the order details and number, and is asked to accept them, because sometimes he may not be in a position to ship freshly-made content. But once he confirms, the order is prepared and packed and the shipping label affixed. Now all he has to do is wait for the courier (who has been notified) to come and pick it up.

If multiple vendors are involved in a single order, each would receive the order specifying the eatable he is to provide. "Our software not only manages 10 different products from 10 different sellers, but also calculates the individual discounts that each vendor is offering on each of the different items the buyer wants. So, say, if 2 of 10 vendors are offering discounts, the system is intelligent enough to pay full value to the eight who aren't. The two who are, will get the marked value less discount and all this information will be visible to both, the customer at one end, and each of the vendors at the other."

Someone buying from multiple vendors across multiple cities or states may also get the consignments in batches. "That is something instrinsic to our business," he explains. "We could store the various articles and deliver them in a single package but that would dilute our promise of offering fresh. Our proposition is this: the products come fresh to you, directly from the place of origin."

The customer is informed by email/sms at every stage, right from placing the order, to packing, to pick up to delivery. Mirchi.com uses couriers such as FedEx and BlueDart for delivery where air connectivity is available. "Where it isn't, we use road transport such as WeFast and Dunzo, but here again delivery takes place no more than three days. We have no plans to expand our logistics base as that would dilute our business model." 

The business network: 

"Today, the reach is across 20,000 pin codes. We are also launching our hyperlocal service (within a radius of 15 km) across seven cities, with delivery under two hours," he says.

Mirchi.com has 800 FSSAI and GST registered vendors across India. Its goal is to have 2,000 sellers over the next two years. It also has some 60,000 individual customers across India, and 15 corporate customers. 

"We are now targeting corporate gifting. One of our first marketing successes was Sundaram Finance, who were initially relucant because they usually sourced from Chennai, where their HQ was located. So we had a box made specially for them and told them they could get it for Rs 700 from us. They were astounded, as such a box would cost them Rs 1,200 in Chennai." 

"You see, under my model, you buy when you need, you print when you need. You don't print, say, 30,000 boxes and keep them ready, You print, buy and pack on demand. Inventory cost comes down dramatically," explains Niraj. "So when Sundaram Finance signed, we delivered their order to 80 different locations all over the country. Result: they come back to us with a much bigger order this fiscal."

Mirchi.com also has a dedicated line and a mascot, Mirchi Girl, to handle customer grievances. It has 15 people on its rolls, but since most of its operations are outsourced, the firm doesn't want to scale up too much.

International operations: 

These have been limited due to Covid, though the company has been shipping to the US, Canada and the Gulf. Niraj says Mirchi.com has applied for US FDA approval and has a registered agent in America to take care of customs and food clearance issues. "We have an IEC code in India, and are also registered with banks abroad to facilitate payment of customs and remittance of money. Without these protocols no international courier would entertain us." 

But since Mirchi.com eventually wants to get into bulk as well, it will need an FDA licence and a pre-certification from US Customs. "We are already certified in Mumbai, Bengaluru and New Delhi, from where international consignments are dispatched," Niraj says, explaining that the markets in Canada and the Gulf are easier, though certain items are restricted. "In the Gulf, for instance, we cannot sell Khus-based products because of the opium content. In fact our software is geared to tell the customer whether the products are available locally, nationally or internationally," he adds.

The big guys 

Niraj says large establishments have their own websites, but not have the kind of e-commerce platform Mirchi.com does, and aren't willing to invest big only on technology as that isn't their main business. "I'll tell you how we come in. Suppose a large corporate wants to order, say, 200 boxes of sweets. The big guys would be glad to service it. The problem arises when that client asks them to deliver each package to 200 employees in different parts of the country. They wouldn't have the wherewithal and would at best bring the entire lot to the client's office and let him manage delivery on his own."

Mircho.com's system is geared to meet such a complex logistic demand. The client simply needs to log on to Mirchi.com, choose what he wants, and import the addresses on to excel sheet. The system will generate the addresses individually. All the client has to do is place the order and the delivery schedule is conveyed to the courier/s. 

Says Niraj: "We use the dot net platform. The use of AI is limited to tracking customer loyalty and offering discounts on the fly as part of our retention strategy. A loyal customer would naturally be looking for rebates. We use AI to preempt his asking by offering loyalty sops upfront, right at the point that he checks out." 

Financial performance 

Mirchi.com says it has clocked a revenue of about Rs 2 crore this fiscal. It is pushing to ramp that up to Rs 5 crore woth a 500 shipments a day by December, by expanding the vendor base, and trying to make a dent in corporate gifting at IT companies and large enterprises where WFH is the new normal. "We are tapping the corporates during festivals like Diwali and Christmas, and individual events such as birthdays, anniversaries and awards. This is the second year in which we are servicing the TVS group (Sundaram Finance). Other clients include Care Hospital, DRL, Cognizant."

Mirchi.com has broken even operationally, and hopes to achieve financial break even by this December. 

Covid impact

Niraj says the year 2020 presented a paradoxical situation: When Covid struck there was a lot of emphasis on home delivery and safe eating, but at the same time, the supply side was impacted in two ways.First, apart from the vendors, even the couriers shut down or curtailed operations as they couldn't deliver to pincodes under lockdown. Second. their own drivers started testing positive. 

Explains Niraj: "We don't have the kind of logistic infrastructure that Amazon or Flipkart do. We rely on companies like DHL, BlueDart and FedEx, so when these were impacted, obviously there was a ripple effect. But that period was a blessing as it gave us space to evolve new ideas and improve our gifting solutions." 

One such, conceived during the 2020 lockdown, personalised the gift pack with a customised birthday on anniversary greeting on a 400-gram or half-kg box, without infringing on the seller's brand name or logo. 

"We also created a customised box for the Indian mission in the UN. When the country got a permanent seat in the UNSC, the mission wanted something that showcased India's culinary diversity. We curated a package  called 'The Taste of India' that contained five smaller boxes of equal size, each with a unique delicacy from a specific region of India. The concept was a hit with the mission and has now become a line of business in itself."

The road ahead

Mirchi.com is currently bootstrapped with an overall investment of Rs 2 crore, and is looking at Rs 50 crore funding, which it will mostly use for tapping new customers and geographies. "Ninety per cent of our tech is in place and we don't need much here. In any case, we have not reached out to anybody for funding yet as we need to build our deck first."

Post-pandemic scenario

"Now that everything is opening up, we see even better days ahead as people are spending more, with the job market opening up and with jobs becoming more secure. Snacks and sweets are discretionary items and during difficult days such as the pandemic, spending on them is on the bottom of the priority list. But now with curbs being lifted, greater attendance in marriages and functions, people are willing to spend more freely on sweets and namkeens, and other discretionary items," says Niraj.