Making a mark with Redmart

Making a mark with Redmart

Vikram Rupani and Roger Egan III were classmates doing their master of business administration in entrepreneurship and marketing at INSEAD in 2010. They lived near the institute and often did grocery shopping in the one-north area. At that time, there was only one supermarket there. The supermarket didn't have the entire range of products and it was hard for the two to lug the bags of groceries home, as they didn't have cars.

They thought that facing such a problem here didn't make sense as Singaporeans are tech-savvy, the country has a high Internet penetration rate and groceries are a necessity in every household. The duo, who were customers of online grocery shopping website FreshDirect when they were living in New York previously, also understood the convenience of getting household products delivered to their doorstep.

In New York, Mr Egan was working at Integro Insurance Brokers, a company which he co-founded, while Mr Rupani was working first as an investment banking analyst at J.P. Morgan and then as a research analyst at Airline Credits.

They decided to do a study to see if a similar online grocery shopping website could work here. They applied what they learnt during their course and evaluated the business from a strategic, marketing and operations angle for a year before deciding that an online grocery shopping website in Singapore could work.

In October 2011, Mr Egan and Mr Rupani started Redmart. A few months later, Mr Rajesh Lingappa, who Mr Egan connected with on LinkedIn, joined the start-up as it needed a chief technology officer. Mr Lingappa, 40, came to Singapore from Bengaluru in 1997 to work as a software engineer in a technology start-up. He then did his master of technology at National University of Singapore.

Growing over the years Redmart started out in a 3,000 sq ft warehouse in Pasir Panjang storing about 3,000 products ranging from household essentials, health and beauty, and baby products which were sourced from various manufacturers and distributors locally.

Initially, without any helpers, the trio rolled up their sleeves to do everything - from attending to customers, packing items, managing finances to delivering the goods themselves with just one van. But over the last few years, the start-up has grown.

In January 2013, they moved to a 12,000 sq ft warehouse in Jalan Terusan and eventually grew in that facility to 70,000 sq ft. In early 2015, they moved to an even bigger warehouse in Jurong measuring approximately 100,000 sq ft, which also offered temperature-controlled storage allowing them to expand their fresh and frozen offerings.

It has since increased its range to over 26,000 products and the firm has 95 trucks to deliver products from categories such as fresh produce, frozen food products, beverages, children's goods, health and beauty items, household and pet-care products. All the products are sourced and imported from countries including New Zealand, Indonesia, Malaysia and Australia.

Its three-man team has grown to 700 employees - 650 in Singapore and 50 in an office in Bengaluru. Those in Bengaluru work on technology development, while the Singapore office takes care of the rest of the operations.

According to the Mumbai-born Rupani, when they first started, FairPrice and Cold Storage had an online presence, "but it left a lot to be desired". There was also an online grocer called household.sg, but it closed in 2012. He added that Carrefour launched its online service towards the end of 2011 but also closed about a year later. Currently, he feels that brick-and-mortar grocery stores are the company's main competition. "We are mainly focused on converting people from shopping offline to online," said the 34-year-old, who is a permanent resident here.

It launched Redmart Marketplace on its website last year, allowing independent sellers to list and sell their products. These include stores such as Wine Connection, Straits Wine, Organic7days, Totsworld, Mothercare and Courts.

"With this, we offer a much larger selection - niche products that one won't find in a regular grocery store. People can get all their home needs and they don't need to drive to different parts of Singapore to get them," said Mr Rupani.

The team will also introduce products that Indians commonly use, such as Amul milk and masala mixes, as they have received feedback from Indian customers that they would love to be able to eliminate the trip to physical stores for their groceries.

Deliveries, which are available every day including public holidays, are mostly made within 12 to 24 hours of placing the order. However, RedMart is working on express delivery options to reduce it to four to six hours.

Currently, delivery hours are from 7am to 10pm, but it is in the midst of extending delivery times from 6am to 11pm. First-time customers enjoy free delivery of orders above $30 while returning customers have to spend more than $49. Customers who do not meet the minimum order are charged $7 for delivery.

Eighty-five per cent of the company's revenue comes from repeat customers "and seeing satisfied customers returning to shop at Redmart is what makes our effort worth it", said Mr Rupani.

Till date, the start-up, which makes a margin from the products it sells, has received $80 million in funding from private institutions and angel investors. Co-founder of Facebook Eduardo Saverin and co-founder of Skype Tovio Annus have invested in the start-up.

Building the company with his team to where it is today has been "very rewarding" for Mr Rupani. An avid runner, he likens the journey to running marathons. "Persistence and endurance are essential to even have a chance at success. It's a long journey which requires tremendous mental strength," he said.

He is now looking at how he and his team can replicate the Redmart model in other countries in Southeast Asia.


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