Making Business Transparent
Sumit Ghorawat, who co-founded ShopKirana along with Tanutejas Saraswat and Deepak Dhanotiya, talks about the aim of the startup, the areas they focus on and the way ahead
Kirana (grocery) shops are present at every nook and corner of our country. But many of them are yet to adopt new technologies; they follow age-old methods of taking orders over the phone and home delivering them, accepting only cash or selling goods on credit.
Indore-based startup ShopKirana is connecting two biggest sectors in India -- farmers and retailers because 90 per cent of domestic consumption of all farm produce in the industry happens at these kirana stores.
Founded by Tanutejas Saraswat, Sumit Ghorawat and Deepak Dhanotiya, the startup was India’s first FMCG/grocery B2B multi-brand platform for kirana stores. Excerpts:
What was the idea behind starting ShopKirana?
ShopKirana was founded with the vision of enabling millions of Indian small retailers (kirana stores) to improve their profits, product range and availability, credits, inventory management and most importantly, access to more customers.
For FMCG brands, we would like to become the biggest and quickest go-to-market channel, acting as a demand booster. Strengthening kirana stores is important as it will help connect many of India’s burgeoning 1.2 billion plus consumers who still lie outside the reach of any retail channel/platform.
How does ShopKirana work?
We effectively become the extended supply chain of small retail stores by providing them a one stop solution for sourcing. For discovery, ordering, delivery and payments, they just need our mobile app which has a very friendly and intuitive interface that ensures even someone who is not tech-savvy can use it effectively.
We have also built in gamification into the app to make it interesting for the retailers. Leveraging on strong relationships with the retailers, ShopKirana is also launching brands on digital platform, as manufacturers require a significant platform to launch and need data analytics to catch up with the trends in the market, giving them a boost on the distribution side. By servicing small retailers to be better, faster, cheaper, ShopKirana enables them to compete against organised retail and e-commerce platforms.
What are key areas that the team had in mind while working on the brand?
The founding team was clear from inception that it will not adopt the discount-driven model that negatively disrupts the overall ecosystem. Instead, we have designed it around competitive pricing and scalability that makes it possible to introduce services in any given market within 15 days.
Kirana stores are heavily fragmented, the system has lot of middlemen, the supply chain is inefficient and there is also the quality risk. We have kept all these in mind and eliminated the middle layer. When it comes to our mobile app, we were clear it needed to be as easy as it can be for any small retail store owner to use.
What have been some of challenges while connecting farmers and retailers? How did the team overcome those?
We launched Kisan Kirana as an exclusive initiative to enable farmers to deliver consistent quality products to retailers while eliminating the middlemen. This helps farmers get better prices for their produce and for consumers as well, while the retailer still has the same or better margins. There are multiple hurdles for directly connecting farmers to retailers when it comes to staples, spices, dry fruits, flours, pulses and rice, etc. One is reaching and creating awareness among farmers, the second one is the poor supply chain infrastructure in rural parts of India and the third is helping the retailers/farmers to adopt technology.
You are using technology so that retailers can directly source from brands. But a large section of rural India still isn’t into technology?
What the mobile revolution proved is that when pricing, access and functional value converge, rural consumers actively adopt technology and use it as well. The same applies to any innovation in supply chain concerning the kirana stores in rural areas. That is why we kept our platform simple and accessible through a mobile app. Doing something through a mobile app is something all of them are familiar and comfortable with. So the adoption and usage is very high. Of course, right now, we are focussing on Tier I and II cities only and Kisan Kirana will take us to the hinterland as it expands.
ShopKirana recently raised $10 million in a series B funding round. What is working in favour of your startup?
We raised series B funding of US$10 million from Info Edge, Incubate Fund, Akatsuki AET Fund, NPTK Emerging Asia Fund and Better Capital. Our previous investors participated in the current round as well which shows the confidence they have in our model and the scaling up we have been able to achieve.
From 12 crore and 1000 kirana stores in 2014 to 600 crore and more than thousands of kirana stores by 2020-2021 touching 50 million consumers, our growth has been exponential. We are also becoming the biggest and the quickest go-to-market channel for FMCG brands to reach more Indian consumers in tier 2 cities via kirana stores. ShopKirana platform has the ability to place an international brand in local kirana stores and has the power to take a local brand national.
What is the way forward?
We are already operational in Jaipur, Indore and Bhopal and gaining market share consistently. We share accumulated demand to brands based on booking on our app of multiple products at one go and deliver the product to retail stores within 24 hours. We provide visibility, analytics; discoverability of products on the platform, leading to higher brand building to stores and more sales. The way forward is two-fold — gain higher share in markets we already operate in and expanding into newer markets (Tier 2 cities in India).