A Bar In The Cloud

In today’s world, that’s an oft-heard statement, and it’s true — you can order food, book a cab, call an electrician home and even meditate. Why should liquor be left behind, then?

By Akhila Ranganna

June 19, 2017

India is the third largest liquor market in the world, and is also one of the fastest-growing alcoholic beverages markets. The liquor industry in India is valued at around 3.5 billion dollars, and the bulk of this revenue comes from the sale of Indian-made foreign liquor (IMFL). According to analysts Ken Research, despite the complexities posed by the Indian market, the industry has not yet fully been explored, in comparison to western markets which are almost saturated. Thus the possibility of several international players expanding their operations into India over the next few years is bright — and it is to tap this burgeoning potential that HipBar has made its initial foray in Bengaluru.

Prasanna Natarajan, who hails from Chennai, settled in Goa in 2007, after completing his studies abroad and travelling the world on work. In Goa, he started Sipping Spirits, a craft spirits bottling and marketing company. “This was my first business venture,” he says, “and I set it up from scratch. I continue to run that business, and it is my greatest teacher.” The entrepreneurial streak was always in him — one part of his family had run a trading business. His father, a chartered accountant, had spent a considerable part of his career in business. “I always wanted to be in business, partially because I would’ve been a misfit in any other role. That I had a safety net made it a lot easier,” he says.

How did the idea of HipBar come to him? “Over the years, running the spirits business handson, I realised that the world had changed a lot, but not what I was doing in the office,” says Natarajan. “The issues were repeating themselves, and the system was very inefficient in many ways, which was frustrating. I hadn’t built a big enterprise, but learnt big by staying the course on what was a very tough business turf, and that led me to the thinking that things should be changed. It all just starts as an idea, and it was influenced by seeing the other digital phenomena that were emerging.”

After several weeks of thrashing the idea around in his head, Natarajan finally opened up to his wingman, Aprup Shet, who now heads product at HipBar. For close to five months, the due tried to come up with a vision that encapsulated the purpose of the enterprise, and how it would serve the need in a responsible manner. More research, along with some good advice, followed and things finally fell into shape — HipBar was formally set up as an enterprise in February 2015.

HipBar currently operates in Bengaluru, and within its first week of being operational, more than 6000 downloads were clocked. “The basic premise is it should be the better way of connecting drink choices with peoples’ decisions,” says Natarajan. “It works exactly like how you would buy a physical bottle of whisky and drink it at your leisure — except that in HipBar, you pay for a digital bottle, and drink from it not just at your leisure, but also from a wide range of places. The fact that you made the choice digitally and paid for it, entitles you to certain privileges, including portability.” Essentially, you can build your own bar on the cloud, in which you can stock your favourite beer, wine or spirit brands, pre-paying for them. You then pay for the portion you consume, using the app, which will then immediately update to reflect the remaining volume left for consumption. Currently, the prices are determined by HipBar and the outlet, factoring in the MRP on the liquor. So far, there have been more than 80,000 downloads, and HipBar has tied up with close to 100 retail stores and around 80 restaurants, such as Smoke House Deli, Social, Sotally Tober and Open Box, among others.

“We are a sector-specific mobile wallet, as against the ubiquitous wallets in the market,” says Natarajan. “Our wallet is available only to people over the legal drinking age.” As per government regulations, you cannot buy or sell liquor in India online. HipBar therefore took pains to ensure it was an RBI-certified mobile wallet, clearly identifying itself as a Fintech company. The semi-closed pre-paid instrument provisions are used to carry out the transactions. “Our legal strategy is another core IP, and it has been deduced after a fair level of research and consultation,” he says. “We already follow all extant rules and regulations, even as we are determined to work with governments to improve the regulatory framework of the trade.” India’s smartphone user base has crossed more than 300 million, and with the focus of the government on ensuring a cashless society, the growth of digital wallets has been phenomenal.

HipBar also seeks to work as a discovery platform, allowing the consumer to check out the catalogue of products on offer, as well as to find out if the restaurant they intend to visit stocks their favourite brand or not. “Our focus is to improve the customer’s real world experience, their choices and the places,” says Natarajan. “When in full bloom, customers will find it more interesting to get their drinks from HipBar, than otherwise.” Though currently operating only in Bengaluru, HipBar has shortlisted two other cities that have a different trade structure compared to Karnataka. The aim is to expand once the company, which currently has close to 35 employees, feels they have crossed the line in Bengaluru. “We are bootstrapped now,” says Natarajan. “Much of it is from my own [and family] sources, and to top up, we got some friends to co-invest. After launch services in March, we have been approached by both strategic and financial investors to partake in the journey. We are evaluating and being evaluated.”