Now, Startups Help Rural Kirana Stores Become Online Retailers
SMART KIOSKS Using a tablet,
retailers are helping villagers who don't have access to internet to shop
online
Shivkumar JR, 34, has converted his
180-square foot kirana store, Sri Gayatri Coffee Works, into a virtual
supermarket with the help of a kiosk next to his billing counter.
Situated in Kolar Gold Fields, 100
km from Bengaluru, customers queue up to shop on a tablet device that displays
a catalogue of products, taking Shivkumar's help. Apart from coffee, he now
sells gadgets, apparels and cosmetics, with backing from a startup.
The tablet in the kiosk is a gateway
for both shopkeepers and their customers in small towns and villages to buy
products not available locally . Costing between ` . 8,000 and . 15,000, the
kiosks offer the experience of on` line shopping to people in rural areas who
have poor or limited access to the Internet.
In Anantpur district, 400 km from
Hyderabad, N Chandrababu, 28, now orders stocks online to increase his profit
margins and has cut down the number of distributors by more than half. “I don't
need distributors to bring me stocks because I can directly buy online and earn
10-20% more,“ said Chandrababu. “We had 15 distributors six month ago, now we
just have five, which we are maintaining because of good relations.“
These changes have been made
possible because of companies such as IPay Tech India Pvt and StoreKing, which
have a quasi ecommerce model to reach customers in rural areas, where Internet
connections are patchy and smartphones are few.
The companies make product
catalogues available offline, so there's no delay on account of a slow
Internet. After an order is placed and the payment made, the company dispatches
the package to the retailer in 24 hours to 48 hours. The shopkeepers need to
have a reasonably good Internet connection. To overcome connectivity issues,
the StoreKing model requires bandwidth only during updates, while IPay has
software that uses a minimal Internet connection.
According to a
PricewaterhouseCoopers report, about 92% of India's retail market is
unorganised and dominated by local shops owned by individuals. The retail
sector is witnessing the dawn of a new era as ecommerce startups take ecommerce
startups take frugal technology to rural India where big companies such as
Flipkart and Amazon have little or no presence. Only 12% of the population in
India uses the Internet, according to IPay. “More than 50% of retail sales in
India takes place in tier-3 or smaller towns and therefore we have a huge
opportunity,“ said Sridhar Gundaiah, founder and CEO of StoreKing, an ecommerce
website with a catalogue of over one lakh products and about 6,200 kiosks in
south India. Its user interface is available in English, Tamil, Telugu, Kannada
and Malayalam.
Bengaluru-based StoreKing, founded
in 2011, taps into tier-3 and smaller towns to help kirana store owners such as
Shivkumar in Kolar Gold Fields and their customers to buy products not
available locally.The company is expanding to Kerala, Goa and Tamil Nadu this
year.
In Chanubanda village, 330 km away
from Hyderabad, a 240 square foot kirana store owner serves residents of nearby
villages with the help of a kiosk installed by Hyderabad-based IPay, which also
backed Chandrababu in Anantpur district. “Here, very few people understand
online shopping or ecommerce. All they know is if they purchase from my shop on
this machine, they get huge discounts,“ said the owner, K Suresh.
For Suresh, this has been a life
changer. In the past seven months since tying up with IPay, he has reduced
purchases from distributors by 25% and orders most commodities online, earning
more.
“I have to serve 15 villages here. I
can't always wait for two days to get the products.Hence, I order some necessary
products like toothpastes, shampoos and creams in bulk to keep the stock
available,“ he said.
Two-year-old IPay has installed
4,500 such kiosks in the rural areas of Andhra Pradesh and Telangana. IPay,
founded by serial entrepreneur Krishna Lakamsani, has roped in 4,500 retail
stores in 850 towns and villages of Andhra Pradesh and Telangana and has almost
2.8 million customers. It plans to expand into other southern and western
states.
So far, these companies have worked
on a prepaid cash model, where customers make payment upfront while placing
orders.Now, they are roping in payment companies to facilitate the use of
digital money. IPay tied up with Ezetap early this year and is in talks with
various e-wallet players. StoreKing will be tying up with Mobikwik, PayU and
Paytm by the end of this year.
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Richa Maheshwari
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ETT18JUL15
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