Building and owning a home is something almost everyone aspires for. However, the actual process of constructing a house can be quite tedious. Deciding on and buying the different construction materials required, not to mention figuring out where to buy them, and understanding quality differences, etc. is a harrowing task. It was this very situation that 43-year-old Vineet Singh found himself in two years back when he began building his house in Delhi.
There wasn’t a single website or portal that could give him all the information he needed in a consolidated, helpful form. He and his family spent long hours doing research and wading through different magazines. A few months later, he met Puneet Dalmia, MD of Dalmia Cement Bharat Limited. Puneet too was renovating his house at the time and his experience was just as bad as Vineet’s.
It occurred to Vineet that if someone like Puneet, a big name in the building materials industry, had to face such problems with all the resources he had at hand, one could only imagine what a common regular individual went through to survive the ordeal. This common pain-point led to detailed discussions, and it was then that the idea of solving this problem for the regular consumer came about, and Buildzar was born.
What does the platform do?
Buildzar is an online marketplace for all home construction and home renovation solutions. It caters to homeowners, builders, architects, and designers and aims to make the home-building experience smooth and hassle-free.
The platform offers the full range of construction materials, including cement, steel, sand, bathroom fittings, electricals, tiles, paint, bricks and blocks, stone aggregates, water tanks, and more.
“We have also launched a one of its kind turnkey home building solutions, where anyone planning to build a home can get materials, design, and labour services – all in a one-stop shop,” says Vineet.
This unique offering, called ‘Build Your Home with Buildzar’ (BYHB) aims to offer the consumer a professional interaction and allows them to make decisions about building the right home in a short time, sometimes just a few hours.
Buildzar was founded by Vineet and his friend Swapnil Tripathi. Swapnil and Vineet have known each other for 15 years. They tapped their vast network in consumer internet industry to build a solid team right from the beginning. Headhunting firm Clarity Consulting helped them find their Chief Product Officer, Vivek Sinha. Their Sourcing and Operations Director Romil Kaul, Turnkey Solutions Director Darshan Gundawar and Supply Chain Director Ashutosh Srivastava were similarly headhunted.
“We have Sonjoy Chakravorty and Amit Gulati as Associate Directors, e-commerce, and Ashlesha Yadav and Avinash Singh as Tech and Design Heads, respectively. Everybody saw that bringing innovative ideas to the $150 billion global construction industry was a great opportunity. Swapnil’s success at 99acres, which was a hard industry with huge competition, has added a lot of credibility to the setup,” adds Vineet.
Creating newer products
To remove the information asymmetry that currently exists, they have created unique products like Beztimate, a construction cost, quantity, and timeline calculator and store, organised as per an available budget. “We have designed use-case-based combos according to each stage of construction, so that customer does not have to take care of dealing with multiple vendors and scheduling deliveries,” elaborates Vineet.
When they started out, they grappled with answering several basic questions like what was the market size, what were the consumer’s pain points and who were their industry parallels like a Nestopia and central mart Introducing e-commerce to an industry where product prices fluctuate all the time was a huge challenge. On the consumer side, the industry works on a credit-based system, and customers are reluctant to pay taxes. So the team decided to keep an open aggregator model and take the money upfront.
Revenue and numbers
Vineet says that Buildzar started attracting consumers from the very first day, adding that the platform fulfilled orders worth Rs 8 lakh in July. Since then, Buildzar has witnessed tremendous growth. In November, it sold building products worth more than Rs. 1.1 crore, around one-third of total sales since inception.
The team claims that they have clocked gross sales value (GSV) of Rs 5 crore in their first four months, with a run rate of Rs 2 crore a month. Vineet says their average margins are around 3 per cent now, which they intend to increase as they grow.
All transactions are on a 100 per cent advance-payment basis. “We have 275 unique customers and are averaging seven repeat transactions per customer. Our average order value is Rs 55,000. Our logistics costs are nil, as we follow a marketplace model,” says Vineet.
Buildzar has sold products across 18 categories including steel, cement, electricals, plumbing, flooring, paints, bathroom, kitchen, wardrobes, etc. It has also forayed into eco-friendly products such as solar water heaters and AAC blocks (substitute for bricks).
They started out with 30 sellers on the platform and now have more than 250 building material suppliers across Delhi/NCR. In addition, over 100 domestic and international brands actively sell products on the Buildzar.
“We have defined standardised packages of home construction, where the customer can get design, materials, labour and site supervision at a flat per square foot rate,” says Vineet.
The team not only aggregates but also standardises their service providers to sell design, engineering and construction services. Every service provider on Buildzar has clearly defined deliverables, and provides quality materials and workmanship. Payment milestones are clearly defined.
Funding and future
Buildzar received its initial funding from Puneet Dalmia, and the team is planning to raise series A funding in the next few months.
“Building a new behaviour for consumers and suppliers in a conventional industry is always a challenge. Over a period of time, we have managed to build trust among our users and create a shift in shopping patterns. The customer can not only buy products such as cement, steel and aggregates online with a single click but also manage the delivery time as per their convenience,” explains Vineet.
Buildzar currently delivers to Delhi/NCR and plans to expand to 12-15 large and tier-2 cities over the next three years.
According to a 2013 PWC report, the construction industry has been a significant contributor to the economy, contributing around 8 per cent to India’s GDP. The sector grew to 13.9 per cent in FY13 when compared to the previous year. The construction of premium real estate accounted for 7-8 per cent of the Indian market. Mumbai and Delhi alone were believed to account for 55 per cent of that market.