How this Amazon and Catamaran Ventures-owned startup is helping SMBs go digital
Bengaluru-headquartered Prione, a joint venture between Amazon and NR Narayana Murthy’s family office, Catamaran Ventures, aims to tap one million SMBs in the next decade.
Jaipur-based Benavji, a small and medium business (SMB), had invested in plant and machinery to scale its baby clothing business. Little did the company know that the COVID-19 pandemic would curb additional demand and hurt its capex.
The company then contacted , which is now transforming SMBs into the digital era. Prione realised Benavji could fulfill the need for masks and gloves during the pandemic, and nudged the founders to use the new plant to make masks and gloves. Now, three months on, the SMB claims to be clocking over Rs 50 lakh in monthly revenue.
A joint venture between and , Prione Business Services was started in 2014, with Catamaran holding a majority (76 percent) stake. Catamaran Ventures is the proprietary family office of Infosys co-founder NR Narayana Murthy.
Sandeep Varagunti, Managing Director, Prione
The startup is creating an ecosystem of SMBs and helps them with their digital strategies before going online. It is also the logistics partner of Amazon India, and owns Cloudtail, the single largest seller on Amazon India.
From just five cities in 2015, the Bengaluru-headquartered startup claims to have served 150 cities in less than five years. Now, with more than Rs 10,000 crore in consolidated turnover (which includes its subsidiary Cloudtail), the startup has set ambitious plans for the SMB space. The startups says its vision is to make India self-reliant through local manufacturing and to promote Indian brands.
Helping SMBs
Apart from taking SMBs online, Prione trains them in digital advertising, consumer behaviour, warehousing, packaging, and cataloguing. It also works with Amazon’s Local Shops programme to train smaller shops with technology, and has enabled three million sellers to use digital payments.
Sandeep Varagunti, Managing Director, Prione, says: “Amazon pays us to onboard SMBs, and all our services are free. This year, we have witnessed 30 percent week-on-week increase in SMBs going online. The next ten years is about Indian brands and their rise. In 2016, we did not have many digital first brands. But today, we have so many. Boat, Wow Skin Science, and Fabiano are a few brands doing extremely well in the ecommerce journey and are brands that used ecommerce as a channel well.”
Sandeep, who is currently working from Hyderabad due to COVID-19, handles a team of 1,200 members, and works with 100,000 SMBs. He and his team have set an ambitious target of signing 40,000 plus SMBs by the end of the year to sell their products on Amazon.
“While working with Amazon in Europe, I realised SMBs are highly sophisticated when it comes to their digital journey, and they have whole teams dedicated to selling online. When I returned to India, I wanted to work in the digital transformation of SMBs, and I remember going door-to-door to understand why SMBs in India would not go digital,” says Sandeep, who has an MBA from INSEAD. According to him, the reason why SMBs are not going digital is because they do not understand cataloguing the product.
The workings
Sandeep says, Amazon Europe is technologically sophisticated. However, it was a different story in India for Amazon as Indian SMBs were yet to catalogue their products to sell online.
To solve this, in the first two years, Prione invested in professional photographers, models, and shooting space to catalogue products and then list them online. But it soon realised this was not the way to scale. He asked SMBs to work with a photographer of their choice locally, and catalogue the product to Amazon’s standards. This became a massive success as the number of products that were being listed increased.
The startup then went on to move this cataloguing model to all SMB clusters across the country. It realised that be it a furniture maker in Ludhiana, or a sporting goods manufacturer in Meerut, or a silk saree manufacturer in Kanchipuram, everyone could get online with ease.
Now, all Prione had to do was visit these SMBs and train them in digital marketing. Even this could be done over a call, but if the SMB needed hand-holding, a local team could train the entrepreneur in SEO optimisation and to use keywords.
Speaking about the importance of digital marketing, Sandeep says:
“SMBs must learn to advertise if they sell online. Traditional businesses don’t know how to advertise digitally, so we help them with SEO optimisation and marketing. They need to know how to make sponsored ads and products. After I moved to India, I figured out a way to adopt new-age tools and technologies. Our team visits each of these SMBs and trains them in digital marketing.”
Apart from digital marketing services, brands work with Prione for logistics, packaging, and warehousing as well.
The startup also advices brands to spend money on Amazon ads, Google Ads, Facebook Ads, Instagram, and other social channels to get the attention of customers. Along with this, Prione teaches brands to convert existing online traffic for their products into loyal customers by using the right keywords. They will set up the Amazon dashboard for an SMB, and will give them the analytics needed to help the brand on how much must they spend on a product campaign, and also figure out whether it is working or not.
The business and future
According to the startup, a majority of its revenue comes from its subsidiary, Cloudtail, which has tie-ups with both national and international brands.
The startup has an authorised capital of Rs 550 crore. According to details available from the Registrar of Companies, it registered Rs 5,680 crore in revenue in FY 2017; it had a revenue of Rs 7,245 crore in 2018, and in FY 2019, its revenues were Rs 9,039 crore. The profits in FY 2019 were Rs 38 crore.
According to BCG, the size of the Indian retail market is pegged at $700 billion, and might grow to be $1.2 trillion by 2025. Prione currently competes with the likes of Airex and Shiprocket.
“In the last decade, the advent of ecommerce has helped new-age brands. Consumer durables, healthcare, and consumables are going to keep growing, and SMBs will revive the economy. However, the road to recovery is a good 12 or 24 months away. But SMBs need to go digital. They are crucial to India’s economic recovery. Indian SMBs are an alternative for imports from China, and our SMBs can participate in the global supply chain. Local consumption is the key, and from this year, Prione will help SMBs go global,” says Sandeep.
For India’s brand story to succeed, there needs to be a collaborative ecosystem of NBFCs, SMBs, and ecommerce players. If Amazon Founder and CEO Jeff Bezos and Infosys’ Narayana Murthy can come together to create this platform, then the key to India’s success truly lies in supporting Indian SMBs, says Sandeep.
Edited by Megha Reddy