Here’s why these two Canadians built a subscription commerce startup in India

RecurRex is a SaaS subscription startup that allows e-commerce firms with current or prospective subscription potential to automate recurring billing and payments

While online shopping has gone a long way in India, subscription e-commerce has not gathered much momentum. This is partly because large horizontal players like Flipkart and Snapdeal, who together command the largest chunk of the market share, haven’t seen much success with their subscription models.

Two Canadian siblings, Mathieu and Alex Desmarais, with immense knowledge of the India market, are on a mission to bring a change and transform the way people shop online. Their startup RecurRex has developed subscription commerce marketing tools, which they hope will transform the way companies do e-commerce in India.

RecurRex is a SaaS subscription startup that allows new and existing e-commerce websites with current or prospective subscription potential to automate recurring billing and payments. It also provides tools and actionable data for subscription marketing and delivery management.

Subscription commerce still nascent

“Subscription commerce is still nascent, but we have made an encouraging observation over the last months,” says Louis-Vincent Ledoux, Director of Customer Experience at Bangalore-based RecurRex, who is also a Canadian.

“Last year, when we were talking about subscription commerce with founders, VPs and CEOs in India, they weren’t aware of this business model’s specificities and benefits. Now, we find that they are much more informed, we have less education to do. The fact that subscription businesses such as Raincan, Teabox, iTiffin, Fab Bag and Flintobox received decent to great amounts of funding in the last few years is probably one of the main reasons,” he adds.

With its monthly per-user billing system and low initial fees, RecurRex allows e-commerce startups to invest in marketing instead of technology, and to launch a subscription e-commerce in a few days with minimal risk. This, in turn, offers convenience and discounts for the consumer, better cash flows, inventory management and customer loyalty for businesses.

Recurring billing made easy

While there are currently no options to automate recurring debiting on Indian credit cards or bank accounts (thanks to RBI regulations), RecurRex has automated this process as much as it is legally possible with an SMS 2 Pay functionality, says Ledoux.

Bangalore-based RecurRex’s main focus is small e-commerce firms, as the pricing model is more appealing to them. These companies can launch the subscription feature in a few days, with minimal capital (a small setup fee only).

“There is an increasing need for quality consumer goods, notably in food/groceries, which is still controlled in the most part by small players, leaving a lot of room for opportunities. While the discovery model will still be very interesting for rural India (comprising about 75 per cent of the population) by giving access to some of the brands that are not available at brick and mortar stores, we believe the automation of recurring purchases of commodity products will be the most popular form of subscription in the cities,” he adds.

Ledoux says he does not see why companies like Flipkart and Snapdeal haven’t added a subscription feature to their operations. “What they are struggling the most with at the moment is building relationships and loyalty with their customers, which is one of the greatest benefits to businesses of subscription commerce,” he adds.

While there are some companies operating in this space such as Zuora, Chargebee, Subbly and Chargify, all of them are focussed on the US market, and have not developed a solution that caters to the specificity of the Indian market.

“Our competitors typically focus on the payment processing and recurring billing aspects of subscription commerce only. While RecurRex does cover this very important aspect of subscription commerce, it also caters to the marketing and logistics processes by providing actionable data and tools for the sub-commerce model,” he explains.

RecuRex’s current focus is very much India, but the company also sees interesting subscription potential in other Asian markets such as Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, as they have interesting subscription commerce potential.

Convenience is key for the young generation

Ledoux believes that with the new generation of young, tech-savvy professionals living in cities with money to spend, the growth of the middle class and the e-commerce market are all signs of great opportunities for so many different products and services in the country, including online subscription commerce. India is also a leader in terms of mobile phone and internet users.

“The new generation of consumers are looking for convenience. They’re also looking for experiences and have a tendency to try luxury brands, such as fashion and technology ones,” he continues.

In Ledoux’s view, Indian subscription businesses have special needs that other subscription platforms are unable to meet; delivery and recurring payments management being the two most important ones. He also feels Indian subscribers require the ability to postpone deliveries, update delivery addresses or pause and resume their subscriptions. In the US — where the model originated — or Canada, packages will find their way to a local post office to be collected later if its recipient isn’t home.

While industry is debating whether e-commerce in India is a bubble in the making, it has not affected the entrepreneurial spirit of these two young Canadian siblings, and they like to believe that e-commerce is here to stay.

The post Here’s why these two Canadians built a subscription commerce startup in India appeared first on e27.