Price comparison service PriceBaba has raised an undisclosed amount of seed investment from five investors, led by Pune based angel investor and entrepreneur Karamveer Singh. Other investors include Dinesh Tejwani of Fast Fact Computer Systems (acquired by Thomson Reuters), Aditya Mishra (Founder & CEO, SwitchMe.in), Ashutosh Rathi (Basil Partners) and Ranjeet Walunj of The Service Solutions.
PriceBaba is trying to connect mobile phone buyers directly with mobile shops, operating in Mumbai, Pune and Delhi-NCR, claiming to have over 350 verified mobile phone retailers live on its platform. The stores, according to the company, go through a two step evaluation process. The service plans to reach 10 cities in 2013.
Speaking with MediaNama, Pricebaba Founder Annkur Agarwal said that the companys business model could involve lead generation – “if retailers make money (because of us), we make money from them. As we add more features, we’ll have more options coming up. We’re trying to solve a critical issue of searching for prices in offline stores, and whether stores have the product in stock or not. Customers today search for prices online, and go and buy offline.”
But why will a customer go through Pricebaba? Why won’t he search online, and not go through the site? “That is already happening, but every time you see a store owners address on Price Baba, we know that someone from that location has seen it. We can talk to them about charging them.” As of now, the company isn’t charging retailers.
Agarwal declined to comment on the number of users the site has, saying only that the base has grown organically by 50% month on month, spreading by word of mouth or through Google. They’re expecting (hoping, rather) to hit a million monthly unique users by the end of the year.
Note that IPO bound JustDial was looking to get into the lead generation business with a service called QuickQuotes. The company was going to operate on a similar model with retailers, and with the infrastructure and retailer relationships already in place, could easily dwarf Pricebaba. So what does Agarwal think of JustDial as a competitor? Hesitant about being critical of JustDial, Agarwal said that he feels that it’s a new game online, and the DNA that a company requires to make things work on the Internet is different. “The way we work with retailers is more like Google works with organic search. They are in the business of selling ad slots and paid directory listings, while we are not. Retailer relationships for us is about going a step further.” If that is the case, then how will PriceBaba scale, and justify the cost of scaling? “We are a four people team, and not more than two people go on the field. The cost of listing a retailer and keeping that list updated is less Rs 125 per year.” The company keeps a check on changing retail prices, but Agarwal would not disclose how they manage this. “As of now, we are sure that our method is cost effective and scalable.”
The company chose mobile phones to begin with because “It’s a highly searched segment, and the SKU’s are limited. That’s crucial for us in the beginning. It’s a controlled environment. The people who buy mobile phones are savvy when it comes to searching online. We’re starting with mobiles, and we’ll move to other categories.” However, expanding to other categories less a priority than expanding to other geographies for now. That way, “when we launch a category, it will launch in new geographies simultaneously. For the first half of 2013, we’ll be focused on mobile.” Pricebaba plans to expand its team to 10 people in the next 3-4 months.
If we do make a list of price comparison sites in India, it would probably be incomplete. There’s CompareIndia, which Network18 bought a decade (or half a decade) ago. MySmartPrice is backed by Helion Venture Partners and Accel Partners, FindYogi and iShopper* that I can recall off the top of my head. A search reveals several others: CompareRaja, PriceDekho, ShopMania, PriceCheck. I checked Bearshop earlier today and found it interesting because it tracks pricing trends as well. There are several others. This explains why PriceBaba is taking the offline route, tedious and expensive as it is likely to be.
Disclosure: iShopper is owned by my cousin Vivek Pahwa.