How social commerce startup Mall91 wooed small-town India, and is now reinventing to deal with coronavirus
Vernacular social commerce has been one of the fastest-growing segments of online retail in India. Meet Noida startup Mall91, which has reached more than 2,000 small towns, and is now reinventing to deal with coronavirus.
In the past 24 months, a host of language-focussed social commerce startups have mushroomed in India, following the success of video and social commerce in China.
One of them is Noida-based Mall91, founded in 2018 by Nitin Raj Gupta and Shubham Paramhans, and it seeks to fulfil rural India’s online shopping aspirations.
But what is social commerce?
As the name goes, social commerce is when social media enables commerce, i.e. businesses leverage platforms like WhatsApp, ShareChat, YouTube, etc., to curate, promote, and sell products.
When you look up ‘Mall91’ on Google Search, the results take you to a Hindi website and a Hindi app listing. When you dig deeper, more local languages show up.
And, that captures the essence of the platform, which calls itself 'Bharat Ki Dukaan' and plans to reach 400 million first-time internet users in India’s Tier III, IV and V towns and villages.
Co-founder and CEO Nitin Gupta tells YourStory, “Most of the consumer internet in India has been built for metros and Tier-I cities. Businesses were cloned and copied from China and elsewhere. We saw an opportunity to build for small-town India, where content consumption was happening due to the smartphone and data revolution. But, there was no unique indigenous commerce model until now.”
How the platform works
Mall91 blends live video-based shopping, vernacular voice-led product discovery, and order checkouts through a chat-based WhatsApp-like window.
Users can shop individually or in groups (a feature that is modelled on the offline bazaar experience), and can even earn commissions on referrals and transactions they facilitate. They can also earn by playing games, watching videos, and scratching cards.
“We follow a direct B2C aggregation model where people bring in their families and friends. We call it network commerce and it happens in micro-clusters. Even a mohalla can be a network. When you bring in more users and the buying happens in groups, you pay a discounted price for the product.”
A lot of live interaction happens within the app, with users “luring and convincing” each other to buy a product. For two hours every day, a live host demonstrates the product catalogue and users can enjoy a TV-like shopping experience too.
Mall91’s most “high frequency, high engagement users” hail from small towns of Uttar Pradesh, Bihar, and Odisha.
“These are small 1,500-people localities, which mostly shop for aspirational products like mobile accessories, selfie sticks, AirPod knockoffs, sunglasses, Bollywood-inspired fashion, and lifestyle items,” shares the co-founder.
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5X operational growth
That startup claims to have a presence in over 2,000 locations across India. Since launch, it has witnessed a 5X growth in “all business metrics”.
The Mall91 app has recorded five million downloads on Google Play Store; its daily active users have crossed a million, with average user sessions lasting 10 minutes.
Its selection includes 2,00,000 items across 15,000 SKUs. The platform also houses 1,500 product videos across eight languages.
In December 2019, the startup acquired Delhi-based ERP solutions provider StompMarket. The latter’s product will empower Mall91’s seller community with state-of-the-art solutions, such as cloud-based inventory management, cross-channel selling support, procurement, warehouse management, order fulfilment, and more.
“We hit a single-day peak of 10,000 orders in November 2019. We managed to grow more than 100 percent in December and January. In the last two months, the topline has grown at about 50 percent.”
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Tackling the coronavirus crisis
Unsurprisingly, the startup saw a drop in sales due to the coronavirus outbreak, which has disrupted manufacturing and supply chains across the country. For Mall91, imports from China, which made up 40 percent of its inventory, have also been severely hit.
The CEO says, “It is natural that consumption of non-essential goods will fall in such times. Most commerce platforms are facing this. Even if we get orders, logistics is impacted by a ban on the inter-city movement of non-essential goods.”
To mitigate business risks, the startup plans to start sourcing from local suppliers instead of wholesalers who typically offer better margins. It might also get into the selling of select essential items (non-perishables) for which demand has zoomed.
“That supply will remain local and will fly in these times. Sellers need to quickly rethink their categories, and we will help them manufacture word of mouth,” Nitin says.
Despite the challenging times, Mall91 is confident that it can post monthly revenue growth of 50 percent in FY21, and increase app downloads by three to four million.
Industry landscape and future plans
The massive opportunity presented by 400 million vernacular internet users has turned social commerce into one of the busiest sectors in India’s digital economy.
India is already Asia’s leading social commerce market, according to a recent PayPal survey. The vertical is projected to be worth $100 billion by 2025.
Mall91 competes with the likes of Meesho, DealShare, CoutLoot, Bulbul.tv, Simsim, Shop 101, GlowRoad, and others, in an intensely competitive market.
The sector was actually validated in June 2019, when Bengaluru-based social commerce startup Meesho became Facebook’s debut investment in India, compelling the investor and entrepreneurial ecosystem to sit up and take notice.
By the end of the year, social commerce became the fastest growing segment of online retail in India, with startups raising over $100 million in 12 months.
Mall91 raised $7.5 million in a Series A round, led by Go-Ventures (the investment arm of Indonesia’s Gojek) in October 2019. The round also saw participation from its early backers Beenext, Kalaari Capital, and AngelList India. Prior to that, in December 2018, it had raised a seed round of $1 million.
The startup plans to use the capital to expand its business domestically and internationally. It also looks to ramp up its product, engineering, and supply chain, and add more languages to the platform.
At the time of funding, Go-Ventures’ VP Investments, Aditya Kumar stated, “Mall91's vision and approach can be successful in emerging markets across the world, and we look forward to supporting the company's growth going forward."
Given the steady rise of shoppers in small-town India, Mall91 is only getting started.
(Edited by Saheli Sen Gupta)
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