HipBar takes a shot at e-enabling liquor retail

Prasanna Natarajan, the Founder and CEO of the company, gets talking on the growth plans for the company.

I run a small alcoholic beverage company called Sipping Spirits founded in 2007. Liquor retailing through e-commerce was something that had never been done before. And there was an overwhelming need from consumers. The prevailing situation saw shops with very low density of brands, bad shopping experience and there were hassles in parking. The more inconvenience a customer faces, the more it turns him away from the experience of shopping.

Our constitution still does not recognise liquor retailing as an ‘ordinary business’. While prohibition comes across as lip service, the sales kept mounting with high internal targets. According to unofficial estimates, liquor is a Rs 27,000 crore business in TN. Any other commodity that the government would be involved with in terms of selling, the margin would be 5 to 10 per cent. Here, it’s almost 75 per cent, and the manufacturers make about 25 per cent.

The TN Prohibition Act dates to 1937, the Bengal Excise Act dates to 1909 and the Bombay Prohibition Act dates to 1949. There is a colonial hangover prevailing in the laws pertaining to liquor in India. Indians were never meant to consume it or enjoy themselves. This placed liquor consumers in a tight spot. And it’s also what made it an ideal breeding ground for digital innovation. As the liquor industry has been slow to adapt to digitalisation, there are challenges in perception. Even social hypocrisy is part of the problem. The industry has always been overseen by the bias of non-drinkers.

HipBar aims to be the digital enabler for the industry, where we work with minimal changes to any of the existing policies and by making tech adapt to policy and giving customers a unified user experience. The Excise Policy has a few major goals – preventing underage drinking, realise excise revenue sans leakages, prevention of counterfeit products, ensuring civility and avoiding public nuisance, and not inducing people into drinking. Digital can influence a more responsible and rigorous implementation of the Excise Act. As it will work as a fair play for everyone.

Apart from Chennai and Bengaluru, we are building our pan India payment network and our services will be available in 2,000 stores across 12 cities. Currently, our business in Chennai ranges between Rs 5 to Rs 6 lakh per day. The investment that has gone into the company so far is about Rs 40 crore. For home delivery to become a reality, the law must change in many states and we are helping them take the right view on liquor consumption. HipBar is moving to a govt to business (G2B) and business to business (B2B) model, from a consumer standpoint. The resistance comes from some of the on-ground operators as the app stops them from overcharging for the liquor. Customers can report abrasive behaviour, breaches, MRP violation, and we document and report them to the officials concerned, which helps them take the necessary action. As of now, we have tied up with all the mall shops (Elite Tasmac shops). The store becomes a unit of fulfilment for us. Getting the store to accept payment from customer will be the way to unlock a delivery model subsequently.

We are working on a Priority Store Pick model, where the store keeps your order ready and you can just walk in and pick up your bag and leave. It’s getting ready as the inventory must go live and it needs a little manual intervention now and we need to roll it out by March 31, 2019. An enhanced model of delivery across the country can be put in place only with the help of strong political will and a change in mindset.