This startup wants you to save your money by curating the best deals on alcohol in town
“I can make anybody pretty…I can make you believe any lie…I can make you pick a fight…With somebody twice your size,” sang Brad Paisley in song titled “Alcohol”. Good music with a glass of wine can truly raise spirits high. However, hunting for places to drink without burning a hole in your wallet is a tough nut to crack.
Anand Janardhanan and Ajeesh Udumbath, two young engineers from Bangalore, faced the same problem of finding the best value on a glass of happiness. “Calling each watering hole to find out the best deals was painful and the online search for happy hours led us nowhere,” said the duo.
On the other hand, the license cost, infrastructure set up and operational expenses are huge for bars. The space is highly competitive and Bangalore alone has more than 900 bars in the premium segment. Many of these bars don’t see beyond one year and if the owners can afford to keep spending, they go close to three – five years without even seeing operational profits. Post the first three months, they want to explore ways to have more people walk through their doors. “We wanted to connect the two and bring cheers to the thirsty youngsters who like to enjoy their drink and save some dough,” said Head Gulper Janardhanan.
This led to the formation of Vgulp, the WWW of drinking – what to drink, where to drink, and ways to drink. This team of hustlers and data freaks curates the best deals on alcohol in town including unlimited booze, free starters, discounts on bills, group discounts, packages and more. And offers are updated every two weeks.
“Vgulp helps in finding out the best information on watering holes and wine barrels that ever was. And you thought it’s just information which we provide? No, we provide real monetary value with offers, discounts, and knowledge on what to choose, just in case you are unsure,” added Janardhanan, who believes that booze enables you to be social when consumed in moderation.
Journey of the gulpers
Officially registered in September 2013, the startup claims to have worked with more than 50 bars and delivered more than 4,000 group walk-ins till date. It says it is growing at 40% month-on-month.
“Initially, we tried to replicate the Groupon model only to learn that things won’t scale, especially drinking being an impulsive behaviour rather than a flash sales behaviour. You decide to drink and look for options, not the other way around. Our first three pivots were minor tweaks to the Groupon model. But as you guessed, they didn’t work out. We took our fourth pivot in April and so far so good,” he added.
The mobile app will be public in January, 2015 on Android and iOS.
Do you know your alcohol?
From date dinners to healthy alcoholism, Gulp Mag is a blog for drink lovers that brings together celebrated writers who know their alcohol and provides the average Joe with sophisticated information about their drink, specifically wines, cocktails, alcohol variants and how to consume them.
Balakrishnan Subramanyan, the Chief Bartender, builds Vgulp’s engagement with a community of more than 100,000 gulpers in Bangalore.
“Gulpwiki is a platform to discover alcohol you will love – brands, reviews and more. Currently, the platform is still in its nascent stage. You can find what to drink based on parameters such as smell, appearance, taste, price, type, etc. soon,” the Head Gulper added.
The startup is in the process of deploying some add-on features to Gulpwiki on web and mobile, and building a self-service dashboard in the backend. The actions of users from what brands of alcohol they prefer and other behavioural patterns will translate into engagement data.
“Once we attain minimal mass, we are in line to do pilots with brands, partner with them, and gather more data by increasing distribution. We aim to be the analytics platform for liquor brands, which will help them in targeting their ads in a smarter way,” he explained. It hopes to sign some pilot agreements with brands by February next year.
Where is the moolah?
According to the IWSR Forecast Report 2014-2019, Asia is expected to see the largest volume increase of any region across the beer, wine, spirits and mixed drinks categories. The total yearly consumption is set to surge by almost 1.2 billion nine-liter cases by 2019.
Two Asian markets — China and India — are forecast to be the largest-growing spirits markets between 2013 and 2019, together accounting for a rise of 120.5 million cases in yearly spirits consumption. Hence, the opportunity for a startup like Vgulp is huge in emerging markets.
According to Janardhanan, the available serviceable market is about $2 billion to $3 billion in size with a revenue opportunity of around $150 million to $200 million. The startup charges 10-15% of the bill for group orders directed through Vgulp as part of its revenue model.
Vgulp is bootstrapped but it is looking to raise capital.
According to Janardhanan, 65-80% of all transactions that happen in the market are basically loyal customers and word of mouth. The remaining is what platforms compete for through listing advertisements, offers, packages and others. “So everybody you can think of in the food and beverages space (local) is a competition. Our goal is to be synonymous to drinking; hence we are niche in that way,” he added.
For a country that still frowns upon drinking
Beer and wine are on the increasing social acceptance curve and on a macroscopic level, the assumption will change soon. Metro cities usually have an inquisitive crowd and they are much more educated about their drink. “There are more than one million searches made every month on alcohol brands and related keywords,” he said.
“We don’t let people enter the website without confirming their age. It accounts for around 40% bounce, which means out of 100 people who want to check us out, only 60 actually do. That’s quite a loss. It is a requirement because of the rules in India,” he explained.
Janardhanan narrated an incident where he met a VC at a conference a few months ago. “She ended up giving me about 10 minutes of advice on what I should be looking at as numbers, but with a definite disclaimer that as a fund they wouldn’t even consider making an investment. Why? Because it is their ‘policy’. She wasn’t the only one. I have received this answer from one more VC. The same funds have made significant seed investments in startups at stages where they were 1/5th of our traction after double the time,” he stated.
On the flip side, there is a huge opportunity also because the market is highly regulated and even the largest of the foreign brands with the biggest advertising budgets face massive challenges with market penetration. They are on the look-out for ways to enter and be known beyond just point of sales.
The service also faces criticisms from users at times; however, Janardhanan strongly feels that the startup is not promoting alcohol consumption in any way. It aims to be the online booze destination for gulpers across India.
“We don’t put surrogate ads and prompt non-drinkers to go to a bar and grab their drink or probe youngsters to start drinking for that matter. What we are doing is help people who drink save for better things in life. If that’s evil, then let it be. All I care about is that people who need our service should be in love with it,” he concluded.
This post was originally published on e27.
Featured Image Credit: Vgulp