StoreKing – a Rs 100 crore e-commerce company that million South Indian villagers buy from
When a student from a village deep inside Karnataka wore a pair of bright yellow sports shoes to college, he did not realize that a few days later, 114 other fellow college mates would be wearing the same shoes.
The next logical question might be, “How do hundreds of villagers get access to such fancy shoes? Flipkart, Myntra, Jabong?”
No. A recent study showed that 91 percent of rural customers do not know how to enter their addresses in English, leave alone shop online. This was possible only because the e-commerce website they ordered the shoes from was entirely in Kannada.
“We really needed to build this. A survey we conducted sometime ago showed that,” said Sridhar Gundaiah, Founder and CEO of StoreKing.
Back in the past
This Bengaluru boy is not new to startups. After graduating with a master’s in IT & E-commerce from the University of Greenwich, London, he founded a startup called Yulop in 2007. The company was then known to provide India’s first location-based services to consumers.
He exited Yulop in 2009 and realized that he had to solve more grassroots problems, which eventually became synonymous to “address the technology shortage in rural India.”
“On one of my trips to China, I realized that the Chinese used Mandarin, almost exclusively, to communicate among each other. I was so inspired. They had the local flavor in everything. Texting, emailing, e-commerce…everything,” said Sridhar, vividly describing the moment the idea of StoreKing took shape.
StoreKing was launched in early 2012.
How it works?
StoreKing is an e-commerce website with a catalog of over 50,500 different products. The only difference is that the entire user interface is not in English. It is currently available in Tamil, Telegu, Kannada and Malayalam. They recently added Goan as well.
“You know that village homes don’t have proper addresses. Basically, letters etc. are delivered by the postman based on only one bit of information, full names. Hence we knew the typical doorstep delivery wouldn’t work in villages, and designed a sort of hub-and-spoke model for logistics,” added Sridhar.
The startup gets in touch with any retail store – be it a mobile store or a kirana store – in the village, and convinces them to buy and install a StoreKing tablet or a kiosk in the store. The retailer only incurs an initial less than Rs 10,000 toward the installation of the device.
“We find a trusted retailer who is known in the village so that people come to him to buy the things they want to and are willing to pay in full toward the product,” said Sridhar.
The retailer takes the customer through the online shopping experience, and helps with the checkout process, as well. Once the order is confirmed, the customer pays the retailer in whole and receives an SMS (in vernacular) from StoreKing.
“The only thing we need from the customer to identify them is a phone number. We send all delivery communications to his mobile after that,” added Sridhar.
StoreKing, which has its warehouse in Bengaluru, guarantees to deliver all items within 48 hours, and uses the FMCG distribution channel to deliver it goods. While the startup, with no competition, does not sell at a premium, it has no need to attract customers with heavy discounts either. Also, retailers take a six to 10 percent commission for every transaction.
“It is a win-win situation for everybody,” added Sridhar.
What does rural India buy?
“You will not believe that one of the most sold item on StoreKing is anti-aging cream. They come and say, ‘We want to look like Madhuri Dixit in that advertisement’. We get hundreds of those orders everyday. And, can you imagine a village home with two dishwashers? One of our customers gifted a dishwasher, each, to his mother and wife,” said Sridhar.
Some of the other products bought by rural India are high-end smartphones – including an avalanche of orders of the recent iPhone 6.
So far so good
StoreKing, which has 4,500 kiosks across South India, delivers over 75,000 orders every month. Though there is a minimum order requirement of Rs 500, an average order is usually around Rs 1,200.
The company raised multiple rounds of funding, totaling around $6 million from a Luxembourg-based VC firm called Mangrove Capital Partners. They raised their most recent round in December 2014.
The startup will be expanding into Maharashtra, Gujarat, and Madhya Pradesh in the next couple of months.
“I hope to reach 500 million people by the end of the next couple of years because I know there is no way a Flipkart or an Amazon can reach the interiors like we can,” concluded Sridhar.