How Startups are Racing to use Technology to Change India’s Retail Distribution in 2020

It has been 15 years since the rise of organized retail, and it has been nearly ten years since the birth of Indian e-commerce. Their entry has changed the way India sees the retail industry, as these two channels bring superior supply chain capabilities and unprecedented price efficiencies, reducing customer final costs.

However, organized retail, at best, can only account for 10% of the country’s consumption, despite a large number of funds used to purchase small retail or home-owned stores. This is due to inherent challenges and costs, such as high rents, salaries, inventory costs and returns.

Small stores and publishers can survive at a small net profit of 3% without resorting to technology.

But for the past six years, brands and startups have struggled to work with dealers and Kirana stores to provide them with technology and empower them with data to change the way they reach customers.

The list of technology providers is endless. For example Udaan, GoFrugal, Amazon, Reliance, Walmart, StoreKing, JumboTail, ShopX, SnapBizz, Connect India and Bizom. With the exception of Bizom, all of these participants have direct access to smaller stores, and Bizom is working with brands, distributors, and stores.

“Everyone thinks the market is big. No one can solve the way that small stores take the technological route. We focus on increasing their revenue and using technology to bring them customer loyalty; until now, they are still being Constraints on products sold in the market. ‘”Said Ashish Jhina, co-founder of JumboTail.

India has nearly 10 million stores and about 500,000 distributors. So far, less than two percent have been digitized. Consumer insights will help small stores improve their purchasing strategies and change the way they work with distributors.

The Reliance Depth Vision

The Reliance Depth Vision - Technology Shout
The Reliance Depth Vision – Technology Shout

Reliance Industries, a retail subsidiary of Reliance Industries, believes that the number of Kirana stores in India has exceeded 7 million, and as part of a “new business” plan, the company is preparing a technology platform to attract small retailers.

With revenue of Rs 130 crore, Reliance Retail is by far India’s largest retailer. The Indian conglomerate plans to use artificial intelligence, machine learning, blockchain, and cloud computing to help Kiranas become more competitive.

With this move, it will get data on 900 million Indians, which will help it become a full-stack data company. It has not only B2C consumption data but also B2B data from kiranas and Jio. The company has data on 350 million Indian shoppers. Jio, it has accumulated data on 300 million telecommunications subscribers.

At the 42nd Annual Shareholders’ Meeting, Chairman Mukesh Ambani announced that Reliance Industries will use a data-based architecture to process the data. Reliance will use this data as part of its super-app strategy to serve consumer content, entertainment, and food and grocery e-commerce.

What Latest Brands are Doing

Brands such as Bisleri, Parle Agro, ITC, HUL, Britannia and other fast-moving consumer goods big names are betting on their launches to make them smarter.

The brand has extensive distribution channels and has been working with small stores for many years. However, they have always relied on data from distributors to push products to small stores instead of understanding products sold by region. ’Said Lalit Bhise, co-founder of Mobisy Technologies.

Fast-moving consumer goods giant Hershey Company has withdrawn from its joint venture with local partners a few years ago and wants to expand its confectionery and packaged food market. However, they are positioned as premium products in the local market, aiming to achieve growth goals by expanding the depth of distribution-selling more goods in each store-rather than trying to appear everywhere. This means that companies need to identify the right channels and the right sales channels for their products. To do this, the team needs access to the hygiene data of their current store-where they sell, what they sell and how much they sell.

However, the limited analytical capabilities of their old solution prompted the team to find an end-to-end solution that allowed them to view their retail supply network from a 360-degree perspective.

The company then partnered with Bizom and deployed a field delivery manager to manage the master data, generate reports, and provide quick turnaround times for support issues. By capturing the data, Bizom is able to provide actionable insights to solve brand issues. The brand’s sales team then used Bizom’s order volume insights to determine the right outlets to measure the potential of each outlet. The company then increased the droplet size and shelf share at the best-performing point of sale to take advantage of its sales potential. It supports sales by extending loyalty programs to channel partners based on Bizom’s trade promotion spending effectiveness analysis. This has increased its sales in India by 61%.

A similar strategy is to improve distribution through technology, and other brands such as Mars, Bausch + Lomb and Cargill have also followed the strategy of partnering with retail distribution in India.

Empowering Small Funding Retailers

Empowering Small Funding Retailers - Technology Shout
Empowering Small Funding Retailers – Technology Shout

Startups like Smerkato, Peel Works and ShopKirana are all trying to change the way small retailers use technology to connect with consumers and increase their profits. “This popular store will continue to exist.

Take a look at India’s consumption model and how it builds its network locally. Large retailers will struggle to take over even after two decades of organized retail and capital investment, as you will see Go to these small stores and use technology, “said Kumar Vembu, founder of GoFrugal in Chennai, which has 21,000 small retailer platforms and 9,000 large customers.

According to KPMG and Ernst & Young (E & Y), India ’s retail industry has a turnover of more than $ 600 billion, of which organized retail accounts for only 10%. For start-ups, this means huge opportunities to help small retailers using technology increase sales and profit margins. Technology is key, and there are many opportunities for many Indian startups to provide technology.

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