Indore-based ShopKirana raises funding, expansion to other Tier-II cities on cards
Indore-based ShopKirana – a B2B M-distribution platform for merchants and small retailers – has raised an undisclosed amount of funding from Samsung’s Atul Jain and Anil Gelra,Founder of Hola Chef, along with a few other FMCG veterans. ShopKirana has plans of investing the funds in technology to make their model scalable in other cities.
ShopKirana was founded in 2015 by Tanutejas Saraswat, Sumit Ghorawat, and Deepak Dhanotiya. ShopKirana is an Android-based mobile application that can be downloaded for free. The retailers can then look for goods they want, order through the app, and pay cash at the time of delivery. “We are glad such great people of this ecosystem believed in us in changing how the retail market works,” said Sumit. The revenue model of the startup is based on trade margins from the brands that get listed.
ShopKirana began from Indore and launched in Mumbai later. The startup had already tested its model in Tier I and II cities. It is now focusing on expanding to Tier II cities. “That’s because the retail channels are comparatively unorganised. That’s a pain-point we still need to address,” said Tanutejas. The startup had seen a phenomenal traction within a few months of its launch, on boarding 500 retailers with just 10 brands integrated in the system. It had managed a sales turnover of more than Rs 50 lakh. Currently, ShopKirana has more than 2,000 retailers on board in Indore city, who gave an order of Rs 85 lakh last month.
Traditional market and scaling up
Tanutejas said, “When you give technology in the hands of most traditional business owner of this country, then magic happens. The numberand data which we are generating now is magical from a sector which was ignored before. This is what fascinates us. We are looking forward to scale up ShopKirana in 10 cities by the end of 2016.”
“We are going to invest in technology first, as we are generating huge amount of data.So, we need to make sure it makes sense to the brands. Scaling to other cities was never an issue for us as we have done that twice in a pilot itself. We have learned how to execute in seven days,” added Co-founder Deepak.
Offline retail and competition
The offline retail market in India is worth $500 billion with around 18 million retailers and will hit $1 trillion by end 2020. India is the sixth largest grocery market in the world,while only five to eight per cent of grocery stores are organised. Despite this hurdle, reports suggest that the online grocery market has been growing at the rate of 25–30per cent annually in metros and bigger cities.
While ShopKirana has its own way of reaching out to the good old mom-and-pop shop owners, better known as ‘kiranawalas’, in India, there are a few startups that are waking up to this market. There’s Twikster, Bizom, Applicate and biggies like Amazon Business, Alibaba, and Walmart.
Along with retailers, ShopKirana has been looked at by the CPG companies and distributors as a platform to find retailers. “Through ShopKirana, now distributors and product companies can get benefits such as POS data, trend/forecast along with analysis of promotion, competition. They are able to time their product launches and they will know exactly where the demand is,” shared Tanutejas.
Notably, ShopKirana was chosen a winner during the YourStory City Meetup in Indore ahead of its annual TechSparks event during October 2015.
Read their founding story here