In this edition of In Conversation, our interview series, we got talking to Mr. Varun Shah, the co-founder and partner at Vendo Systems, a Pune-based vending machine operator, who uses Vendekin Technologies’ smart and touchless vending machine technology in India to power his vending machines. Mr. Varun shares his experience of introducing smart vending to various residential societies and corporate houses, the challenges they have faced and what they look forward to in future with their smart vending business. Excerpts from the conversation:
Please tell us about your business. How and why was Vendo founded? Can you please tell us about yourself?
Vendo was originally the brainchild of Sohel, a dear friend, who I have known for 8 years now. Both of us had our own businesses, I was into the events industry while Sohel ran his rolling paper business. The pandemic-induced lockdowns made us realise that our current businesses cannot be run remotely. Sohel was looking for newer opportunities when one of his cousins introduced him to Aroon Khatter, founder of Vendekin Technologies. Sohel saw potential in smart unattended retail. and started Vendo in December 2020 and soon after in January 2021, I came on board. Since then, all our machines have been powered by Vendekin.
Why did you choose to go into the unmanned vending retail business over other opportunities in retail?
We saw that during the pandemic, people started taking their health and related safety precautions very seriously. We also noticed that there were no provisions for availability of essential products on a 24X7 basis. We saw this as an opportunity to introduce vending machines or unmanned retail as a solution that fills this gap, fulfilling the customer’s need for both safety and convenience. Powered by Vendekin’s intelligent vending machine solutions in India, these smart vending machines can dispense snacks, beverages and other essentials any time of the day or night. Plus the consumers can pay for it via cash or through a completely cashless and touchless digital transaction on their phones.
How many places in Pune are your vending machines located in right now?
We started off small with 3 smart vending machines. And now have 14 Vendekin-powered vending machines spread all across Pune in Maharashtra. This was possible because Vendo was handheld by Vendekin during its initial days in the industry on all crucial aspects. Our first installation was in a residential society named Rohan Kritika, followed by Rohan Mithila in Pune.
Apart from these, we have also manage some of the best digital vending machines in the Pune offices of Resalary and Webasto
Any key takeaways on your experience working with residential complexes vis-a-vis corporates?
Both were obviously vastly different experiences for us at Vendo. Residential complexes and their governing bodies require a lot more convincing and explaining on how the machine operates, its benefits and its ongoing usage and maintenance. Corporates, on the other hand, are familiar with the concept of unattended retail and vending, so they already have a budget for such installations. The large number of people in their offices, which in turn means high volumes, makes unmanned retail an ideal option. One benefit of working with residential complexes is that it gives us a chance to educate and engage with their residents, a majority of whom work with large corporates, and therefore could be future clients or decision-makers as well.
Please tell us about the experience of using vNetra and the various aspects of VCommerce powered by Vendekin
We have just started using the vNetra platform, which is a part of Vendekin’s smart touchless vending machine technology in India, and are getting acquainted with the workings of VCommerce. We've started raising purchase orders for stock refilling using the platform digitally, and have also begun to explore the stock in-stock out feature. Once our logistics were in place, we began to implement and learn the many features and aspects of the platform. With all the information related to sales and earnings available on the dashboard, our review meetings with the Vendekin team got easier, where we give our inputs and then get implemented, in order to ease the process for us through customization. For instance, we had discussed getting GST bifurcation for every product in the machine, and the Vendekin team helped us with a solution to get this particular breakdown in our machine sales report.
What products do you sell through your vending machines?
We sell packaged snacks and bottled beverages in our machines. Our machines are combo vending machines, which come with a refrigerator for products like chocolates and beverages. In residential societies, our target audience are children, and one of our biggest sellers are chocolates. We keep almost the same products in our machines in corporate offices too.
How many customers use your vending machine for purchase every day? How often do you restock?
On an average, we have around 50 customers using our vending machines per day. We refill our machines in residential complexes every 2 days, while in corporate offices, our machines have to be refilled every other day.
How much sales do you clock on a monthly and daily basis?
Each machine clocks sales somewhere between Rs. 20,000 to Rs. 25,000 per month, in both corporates and residential complexes. On an average, we make daily sales of about Rs. 300 to Rs. 350 on each machine from the residential complexes. In the initial days, these numbers would go up to as high as Rs.600 to 750 per day.
How do you source and refill the products for your machines?
We have a central stockhouse, where we get all our products stocked first from the distributors and suppliers. From there, we take these products in batches and stock them in a storage space built close to our machines. We've divided our locations into two clusters, with 10 machines in one cluster and 4 in the other. All these machines are strategically placed within a few kilometres from each other. We have two refillers, who pick up the products from the storage space and refill the machines that are on their route, while updating them in the Operator App provided by Vendekin. Since all these activities are recorded in the app, we get to keep track of the stock inventory on a real time basis.
How do you manage the maintenance of your machines? What kind of support do you get from Vendekin?
We have an Annual Maintenance Contract with Vendekin Technologies and their teams ensure that we do not face any kind of technical snag in the operations, be it in the software or hardware. Additionally, we have an experienced head supervisor who keeps track of everything in our machines. In terms of software support, we have someone from the team assisting us to answer all our questions. Additionally, Vendekin has provided a 24X7 Helpline Number for end-consumers. So they too can reach out for support in case of any issues with their retail transaction.
What's great is that Vendekin chips in with their marketing resources too, to help us connect with residential complexes and to get our machines installed there. At the same time, they help us get connected to brands directly, meaning higher margins for us.
How are end-consumers responding to smart vending machines?
There were initial hiccups when we started off. residential complexes had to be convinced on why they shouldn't charge us a rent for the machines we install, and how it is going to benefit them. We had to give discounts during the first few days, to encourage people to use the machines.
It's not just the residents, we've had the security personnel stationed at these residential complexes come and tell us how they are very happy that they have the best digital vending machine in Pune which vends them snacks and beverages whenever anyone, including them, needs it and that too without any premium to the price. The whole idea is to take the store to the consumer, it benefits so many people, especially the ones who are aged and cannot walk or commute all the way up the store on the street.
Do you think residential complexes and corporates are ready for smart vending? What challenges do you foresee?
I would say, we're getting there and with time, there won't be an option but to accept smart vending and unattend, unmanned retail as a part of our everyday lives. Currently, our machines have the option to scan, select and pay digitally for all the products, but now we have also added a cash acceptor for additional convenience.
The biggest hindrance or challenge is in bringing about a change in the preconceived idea of vending machines. We have had to go to great lengths to explain how a smart vending machine operates, about intelligent vending machine solutions in India and all its benefits, especially cashless vending, to members of residential complexes. While in corporates, it was a bit easier, since it is a part of the perks employees get from their companies.
What are the future plans for Vendo with regards growth, expansion and collaborations?
Our target this year is to have 50 vending machines spread across Pune by Diwali. We plan to have our presence in hospitals and public buildings like government offices. We are even looking at resorts, who can install such machines for their employees and guests and even villa owners who can install such machines in their properties. Added convenience without having to pay an additional salary for a person to run such errands for their tenants. With the vision of creating unmanned microstores, we're pitching to prospective clients to have two smart vending machines next to each other, one could be a snack vending machine, the other can be a coffee vending machine. All in all, the outlook is bright and optimistic about the future of our vending business!
Impressed by Vendo's growth story? You too can create an entirely new channel of sales for the business and residential complexes in your contact sphere with smart vending machines. Get in touch with us on marketing@vendekin.com or call +91 9555712713 to know how Vendekin Technologies can help you kickstart a future-ready business.