Founder & CEO, Hip Bar Private Ltd.
Founded in February 2015 Hip BarPrivate Limited is a digital payments company dedicated to serving the needs of the alcoholic beverage industry and its consumers. It operates the HipBar wallet which facilitates payments at a network of affiliated licensed liquor stores in Bangalore. A Chennai based start-up HipBar allows its users to stock liquor online and drink at leisure at a place of their choice. Founder, Prasanna Natrajan, is a first-generation beverage alcohol industry entrepreneur. Hailing from a family of teetotallers, at 26, a tryst with destiny led him to start Sipping Spirits,a craft spirits business in Goa. From a rank outsider, he self-taught to gain a unique advantage of the industry. After earning the stripes, in 2015, he set out once again on a mission (HipBar), this time to transform the industry that he is so passionate about. HipBar recently received authorization to commence home delivery of alcoholic beverages from the Excise Department, Government of Karnataka for last mile delivery from licensed liquor stores for orders placed on the app. For Legal Permissible Age verification at the time of delivery, HipBar deploys Aadhaar based bio-metric authentication as the preferred choice. Natarajan, talks to Sneha Nair, Brewer World in a tell all session about this tech-savvy alcohol influenced journey!
Where did you identify the gap in the liquor industry, that led to the need/existence of an App like HipBar? Could you talk to us about the vision behind establishing HipBar?
Ten years ago, I founded Sipping Spirits, a craft spirits bottling and marketing company in Goa. I grew the business with a lot of passion and expanded the geographical foot print. With every growing year, I realised that doing business was not getting any easier, and that I was putting in more hours to make things work. It was clear that friction had crept into the business, simply because it was growing. More the business grew, the problems grew too. It was all too apparent that the system was antiquated, and it was exhausting. I began to reflect on what was happening, and where my prospects stood in all this. I decided against growing the spirits business aggressively and instead dedicated my time to finding new age tools that would help me do business with less growth pains.
At that time, I had a brain wave – the thought of e-commerce for alcoholic beverages in India. I had a feeling that it would one day be a reality, but someone had to bell the cat. Over the years, I had developed knowledge of the regulations, familiarity with the trade, and the temperament to deal with the regulators and the government. I decided to invest these skills and pursue the goal of bringing e-commerce to the category. I spent the next six months on legal research and extensive consultation. When the legitimate route to the market was identified, HipBar was formally setup as an enterprise in February 2015. After two years the idea grew to become a business, when we went live in March 2017.
HipBar deals with accommodating so many ecosystems (manufacturers, retailers, consumers, restaurant & hotels, pub’s & bars, distributors). Could you tell us the advantage each would have in joining the HipBar Platform?
HipBar – as an on-demand drink delivery service has a great proposition for everyone. Even during ideation, we recognised that the alcoholic beverage industry and its consumers are two sides of the same coin and we have to address their problems in a holistic manner. For the consumer it addresses the expectations gaps in convenience, experience and choice, by fitting into their digital lifestyle. For the business stakeholders, it addresses underperformance due to consumer disconnect by creating a first of its kind hyper local on-demand platform.
How does the different tax rates impact the product consumers already have in their app while they utilize IT in different cities?
HipBar will make pricing contextual based on location. On HipBar you always see the price which includes all taxes and charges, and there are no extras, this way customers can discover better prices. At the moment we are only in Bangalore, even as we are working with regulators in other states to replicate and implement the system.
HipBar recently received authorization to commence home delivery of alcoholic beverages from the Excise Department, Government of Karnataka for last mile
delivery from licensed liquor stores for orders placed on the app. For Legal Permissible Age verification at the time of delivery, HipBar deploys Aadhaar based bio-metric authentication as the preferred choice.
Any insights into usage in terms of gender, income, profile, cities, etc? Are techies more inclined to download the app? Does HipBar have an ideal target market that it initially aimed to attract?
Yes, we have a decent ratio of women on the platform, despite providing the option to not disclose the gender at the sign-in. We have all types of customers. In Bengaluru, techies are everywhere, aren’t they? On our platform, we find that people who are inclined to upgrade and those with high spending power dominate the transactions.
Do you plan to make this a promotional platform for liquor companies?
We don’t. It will be a communication platform.
The app gives you access to huge data. Do you propose to use data analysis and customize offers?
You are right. We have data, but its not huge enough. But once we have it, we plan to test the power of the insights generated, and then use it cautiously with utmost responsibility. HipBar will not run any marketing program that will turn drinking, the wonderful social activity into a mundane habit.
Talk to us about how HipBar is or can become centric to the beer industry?
We moved our faith from the power of ideas to believing in the power of execution. In what we are trying to do, there is a lot of resistance, because we are the pioneers of this industry. We are learning how to get the experience right, and have great people working on it. Couple of ideas we are blueprinting currently is a plan to install taps at homes and people can choose from a selection of local craft brews in kegs on a Gillette model. It will be a great way for people to unwind after a long day at work. Craft beer on tap at home is an experience we want to test. Another idea is to have subscription plans for bottled beers.
What is your understanding of beer consumption among the youth? Do you have data to support it?
Beer is the first port of call for first time drinkers, who continue with Beer for some time before trying other categories. We understand from data that Beer enjoys over 75% of Bangalore consumption at bars and restaurants.
With the recent Supreme Court Ban, has HipBar garnered a lot of traction? If yes, how and why?
It was a watershed moment for the alcoholic beverage industry, in which we saw a small window of opportunity to push for home delivery of alcohol. The Supreme Court has rightly identified the problems of driving to get a drink and driving after a drink. In fact, the SC decision was not against drinking at all. It was about preventing incidents of drunken driving and road safety, which is exactly what home delivery can ensure. We have been advocating this even before the SC decision, but after it, we managed to move the regulatory needle that permitted for the first time home delivery of alcoholic beverages.
Compliance is part of our DNA. Our systems are designed taking into account the Reserve Bank norms, and the State Excise rules. The two regulators have full oversight of our activities. So, stakeholders who deal with us can do business with confidence.