Generation Startup: E-commerce platform Goodness Cart seeks to cater to healthy living trends

Geeta Pahlajani, a Dubai-born Indian, had always suffered from coeliac disease, an autoimmune disorder that causes a reaction to gluten found in wheat and other grains, but did not know where to find palatable and cheap products she could eat.

Her only option was buying gluten-free products such as bread from pharmacies.

"The taste was horrible with an obnoxious price point: Dh80 for a loaf of bread," Ms Pahlajani recalls.

“I realised there was a major gap for anything that is healthy, natural and organic.”

So when she came back to Dubai after finishing her studies in the UK in 2008, she began to study the market to find cheap alternatives to meet her dietary needs.

That’s when the idea for Goodness Cart, an online marketplace for products that are organic, healthy, sustainable or natural, sprung up.

Eight years later, she set up the business in Dubai after extensive study, and last month she officially started selling products on the platform, which collates products from various vendors.

Ms Pahlajani may have potentially struck a pot of gold.

The GCC e-commerce market, which at $5.3 billion in 2015 represented only 0.4 per cent of GDP back then, is forecast to nearly quadruple to $20bn by 2020, thanks to high mobile penetration and GDP per capita, according to consultancy AT Kearney.

Health and wellness is part and parcel of the e-commerce space and it is growing globally.

The healthy eating, nutrition and weight loss sector was worth $648bn globally in 2015, according to data provider Statista.

“According to some estimates, the health and wellness market in the UAE, which also includes various healthy and organic F&B products, was at around Dh5bn in 2016,” said Anurag Bajpai, partner and head of retail at KPMG Lower Gulf. “However, given the size of the total F&B market in the UAE, healthy eating is a relatively small niche, but steadily growing segment.

The market is expanding for various reasons.

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Besides greater awareness around healthy living, the UAE Government is taking initiatives to improve the lifestyle of residents and citizens though various campaigns. The Government, which is also trying to fight obesity, has introduced an excise tax on tobacco and sugary and fizzy drinks, a move that will help limit unhealthy habits.

“While the healthy eating market might be relatively small today, it is growing rapidly,” said Mr Bajpai.

“The key driver for this growth is that young people in the UAE today are increasingly health conscious and more aware of the healthy eating choices available to them. This has spurred the demand for healthy eating in the recent times.”

According to KPMG, heathy eating is becoming more popular, but options remain limited.

Only 45 per cent of respondents to a 2017 survey said there are enough healthy options offered.

Ms Pahlajani is moving fast to capture this underserved segment of the market. Having launched in mid-March, Goodness Cart has signed up more than 35 vendors and is hoping to reach 100 by the end of the year.

But that was not the initial idea for Goodness Cart, which was supposed to be just an online retailer. Now it offers a platform that connects vendors, logistics companies and other stakeholders.

"We realised that an online retailer would not suffice," says Ms Pahlajani , who is chief executive of the company. "We needed to give all the different people in the supply chain a little bit more. The little bit more meant we had to give them a platform where they could plug in and do inventory management. They basically needed a proper process to actually connect with the customer. At the same time, we needed to ensure that there were the right set of logistics partners involved because we deal with a lot of different categories."

Goodness Cart accepts products that are either healthy, organic, natural or sustainable and that gives it a wide range of items that can be listed on the platform, which also include home, beauty and baby care products. But 70 per cent of the offerings are food and beverage based.

The vendors on the platform range from local farms to manufacturers, all of them based in the UAE and vetted to make sure they meet the company’s criteria.

Besides the heatlhy aspect of the business, Ms Pahlajani saw an opportunity to develop something else: a technology that could streamline processes and help vendors capture more customers in an easy and efficient way.

“Goodness Cart at the end of the day is a technology business,” says Ms Pahlajani. “We don’t produce, we don’t manufacture any of our products. We used the first year and a half to set up our operation in terms of technology because we have proprietary technology built for this market and industry.”

Ms Pahlajani is planning to make technology a second revenue stream besides volume going through the platform, with an aim for it to generate 50 per cent of revenue.

“We are white labelling the solution and will be offering it to other e-commerce providers across the different GCC countries,” she says.

With both sides of the business, Ms Pahlajani is forecasting to grow revenue 30 per cent year-on-year. She is already thinking of initiating a funding round to help build up the business, which is currently funded with seed money from her own resources and an unnamed Indian investment company.

Her aim is to conquer the whole of the Arabian Gulf region in the next few years.

“Our current focus is to use the UAE as a pilot market and our next phase would mean entering Kuwait because the market has a very similar consumer base like the UAE, before progressing to a much larger market like Saudi Arabia.”

Ms Pahlajani is seeking to attract regional investors to get a foothold in the remaining GCC markets and she expects to go for a growth round in the next 18 months.

Despite the progress in setting up her business, Ms Pahlajani did not have an easy ride.

Convincing partners that her business case made sense was also a tough sell.

“The moment I was having this conversation with our partners about creating an ecosystem that was ecommerce-driven there was a lot of resistance,” she recalls.

She cites the high cost of doing business as another major challenge for start-ups, who have to deal with a lot of financial overheads and licensing fees among other costs.

Also finding the right talent with the right skill sets is a problem.

So why choose the UAE?

“I was born and grew up here,” Ms Pahlajani says.

“It is home at the end of the day. This was the obvious choice for setting up my own business.”

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