New Delhi Kitchen appliance and cookware brand Wonderchef, co-founded by Ravi Saxena (former head of Sodexo India) and Chef Sanjeev Kapoor, has forayed into two new categories: coffee machines and equipment rental. The 13-year-old company, with Amicus Capital, Sixth Sense Ventures and Godrej Family Office as investors, is eyeing rapid expansion. In an interview, Saxena talked about India’s growing coffee culture and a strong upcoming festive season. Edited excerpt:
You raised money from Sixth Sense last year. Will you raise more money?
We are expanding rapidly. So, sometime next year, we might go back to fundraising again. Last year, we grew by 30%, and this year we’re growing by about 40%. Naturally, such high growth requires working capital. At the same time, we are investing heavily in design and development. For example, we’ve launched a whole bunch of nine coffee machines as coffee is happening in India.
We are designing the machines because 92% of Indians have coffee with milk, unlike in the West, where most people have black coffee- espresso shots and Americans. Here, we have to design milk-heavy machines with built-in foaming.
So, starting with a simple machine that costs around . Is 1,500, we have a fully automatic machine that gives you a complete cappuccino, including frothy milk. it’s worth 90,000 and will be launched around Diwali. Others whose price is between 14,000 more 17,000 can give you Starbucks-like coffee at home.
In such a situation, the craze of coffee is increasing.
This is already happening. I recently went to a medium sized mall in Mumbai and found 11 coffee outlets, each selling a coffee cup from 350 450 and each has customers. The outlets are differentiated. Few Starbucks and cafes are like Coffee Day, where you sit down and have a great experience. Others are just coffee carts in the atrium.
How much of your business do you see moving beyond coffee machines?
Maybe 8-10% in two years. continuously, every single day, More than 16,000 machines sold 10,000 ones, and 10,000 people outnumber those worth the price 6,000. So, the pyramid is upside down.
You have also started a business for renting out equipment.
Yes, it’s called Wonderrant. It started with coffee machines, but customers can rent any of our equipment that costs . More than 3,000. Our target audience for this is millennials who want instant good things in life. But they don’t want to own the home or the durables and appliances. They love to rent and want to upgrade soon. I see this business growing. We are using a third-party firm that developed the system for us. You can go to our site, and instead of the Buy Now button, you press Rent Now. From delivering the product to the consumer to collecting the rent, everything is done by the third party firm.
What is your demand for the festive season?
It has got off to a good start. One feared that there could be a problem due to various inflationary pressures and other global uncertainties. But I think the festive season in India is very different from all these pressures. I am seeing a strong weather build up.
Will higher prices not affect demand?
Last year, we did three price hikes as shipping costs and commodity costs came down. From January 2021, the overall percentage increase is 20-25%. But despite this we grew by 30%.
How much digital media do you use for advertising?
We are almost 10 times bigger in our social media assets than any other brand in our industry. We have almost 2 million followers on Facebook, Instagram, Pinterest and YouTube and do a lot of content-based marketing. We advertise on Google, Facebook, Amazon and Flipkart marketing systems.
What about television?
We have a campaign, but I don’t think we have been able to use it efficiently because TV requires a big budget. For TV, in my opinion, if you don’t have 50 crores to spend, don’t do it. You also won’t cut the clutter.
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