Understanding the need of the hour and then providing an innovative and easy way to take care of that need is the motto behind a successful startup. And one such startup which is a perfect blend of meeting the needs in an innovative way is Indore- based B2B e-commerce startup, Shopkirana.
The startup was founded in 2015 by Tanutejas Saraswat, Sumit Ghorawat, and Deepak Dhanotiya. The motivation behind that startup was to ensure that the life of the good old ‘kiranawala’ becomes tech-savvy through a mobile application that connects him with sellers of various products instantly. The result was- B2B Startup, Shopkirana.
With the invent of Shopkirana, the retailers (Kirana shop) have better control over his inventory, he can order any time and gets the delivery of goods within 24 hours. The app has helped retailers with generating better sales and keeping less inventory by buying in real-time, and by keeping track of the data on their mobile phone. With a zero-inventory model, what ShopKirana does is it presents itself as a purchasing company and multi-brand distributor for retailers.
The demand they get from retailers (Kirana shop) is sent to the brands, which they deliver to ShopKirana’s warehouse in 48 hours. And ShopKirana delivers it to the retailer the same day, mostly in three to four hours. Within four months of its launch, ShopKirana’s mobile application got 500 retailers (Kirana shop) on board with just 10 brands integrated into the system, and the company managed a turnover of more than Rs 50 lakh.
If we look at the current figure, Shopkirana has 12,000 plus retailers on its platform as earlier this year, the startup expanded to Jaipur and Bhopal and now this Indore-based ecommerce startup is looking to expand to 30 cities and on boarding one lakh retailers in the next 18-24 months. The company claims it has generated Rs 150 crore in revenue since 2015.
Other than this, ShopKirana is targeting a 10 percent market share in Tier-II cities in the short term. It has also launched local content in Hindi and Gujarati to target a wider audience. Making the most of the technology, the founders are piloting animated characters in their app – which will use local language for conversations with the retailers, and hence understands their behavior.
However, other than the aforementioned figures which talk about the success of the startup, it was recent when Shopkirana achieved a unique milestone. In its 12-hour long flash sale, the startup generated more than Rs 1 crore from 4,000 users, all from Indore, it’s home city. Unlike B2C e-commerce platforms that give discounts on a daily basis, B2B player ShopKirana gives no discounts. But the flash sales pushed retailers into buying products.
Another thing which worked out for them was the availability of products. There are many products which are not easily available at traditional distribution systems, either due to service issue or because it is out of stock. For instance- Clinic plus Shampoo. In the first two hours of the sale, they sold 20 lakh pieces of Clinic Plus shampoo in just one city. These are low average selling price (ASP) items, which modern retailers (Kirana shop) don’t sell due to low RoI. But Shopkirana give demand for such items from the small retailers to the brands. Also, about 50 percent of sales (out of the Rs 1 crore) came from farm products.
However, what may seem like an overnight success didn’t come so easy. The founders wanted to ensure that before raising funding, their business model and unit economics made sense, for, if a business doesn’t make sense in one city, it won’t make sense anywhere else and there would be no point in burning someone else’s money if the model is not good and hence, the team waited. The efforts showed results. In 2016, ShopKirana raised an undisclosed amount of funding from Jai Kumar Nair (formerly with Mondelez), Atul Jain (ex-Samsung) and Anil Gelra (Founder of Hola Chef), along with a few other veterans.
Later, in December 2018, the B2B eCommerce platform raised $2 million from Akatsuki, Info Edge, Better Capital, AET Fund and Incubate Fund. The team met Yuki Kawamura, Principal at AET Fund, via reference, and presented their pitch. Within an hour, they got the commitment from Yuki. The clarity of the model and the idea they envisioned was clear. They explained how retailers buy about 40 items via their platform in a month. Otherwise, they have to meet some 400 distributors every month. Interacting with each sales executive takes at least 15 minutes, which means nearly 100 hours in a month.
Other than funding, it has been equally difficult to convince the retailers who were not tech-savvy at all for using this app. Tanutejas Saraswat, Co-founder, and CEO of ShopKirana also quote that most of them would not even use calculators but soon they availing Shopkirana’s service, many of them saw that around Rs 2 lakh – Rs 3 lakh worth of orders were done via Shopkirana’s app. But, the efforts have paid off and the founders have managed to fill the gap which can be seen in the margin of profits they made during their flash sale.