With the new social distancing norms, ecommerce has gained special significance over the last six months. However, while mom-and-pop stores have the right inventory to stock up our homes, they face discovery challenges due to being restricted to offline mode of business.
Brands that supply to these stores also struggle to know their customers as there is no structured consumption data of their customers.
This is exactly what Mumbai-based startup Near.Store —founded in 2019 by Ashish Kumar, Ramakrishna A, and Diwakar Mitr —wants to solve.
The trio was intrigued with the idea of trying to make offline inventory digitally searchable and discoverable. This challenge, coupled with client and brand feedback over the years, drove the founders towards building the current product and solution.
"Even though ecommerce had gained acceptance and significance in the Indian markets, it was interesting to see that the 17 million ‘mom-and-pop’ shops continued to control over 80 percent of the market share in the consumer goods sector. We saw a latent opportunity in creating a hyperlocal tech solution that could help shop owners use their inherent advantage of proximity to the customers in further consolidating their business," says Ashish.
Essentially, Near.Store is a plug-and-play device, which creates an instant online presence for a shop and enables them to start accepting online orders and payments. A shop simply needs to plug in the Near.Store device in their existing billing system to facilitate this.
The startup focuses on expanding the business and customer interaction in a hyperlocal environment in a convenient manner using a website and an app.
Building a digital presence
The founders met in 2006, immediately after business school; Ramakrishna and Ashish graduated from ISB-Hyderabad in 2006. The two met Diwakar through common friends and stayed in touch and in 2019, came together to use their collective experience and launch this startup.
Near.Store enables a shop to achieve unique digital presence in two simple steps. The shop owner plugs in the dongle to its existing billing system and start scanning products to immediately create an online catalogue. The product pictures get populated with the help of the large library Near.Store has built in its backend. This cataloguing helps the stores get another channel for customer orders, which is more convenient and user-friendly.
“Stores are able to take advantage of proximity, offering quickest deliveries as compared to other online businesses. There is familiarity, which means there is a relationship with the customer," says Ashish.
The setup also includes the enabling of online payments, and store owners get access to a monthly credit and are able to transfer this credit to customers too.
Near.Store claims to be serving more than 1,000 stores across Mumbai that have used its solution to digitise their inventory. Customers also receive regulars update on this inventory over SMS, email, or WhatsApp.
Near.Store app
"An offline shop only runs almost entirely on word of mouth or old relationship customers. However, the shops have to go digital for them to stay in the race to compete with ecommerce companies,” he adds.
The startup also wants to create alternate channels of distribution for FMCG brands and newer niche challenger brands, who find it difficult to distribute to the General Trade Channel through distributors. It is already experimenting with this business in Mumbai as a lot of young brands want to be sold in kirana stores. This business will be scaled up in 2021 as Near.Store expands to other cities.
The smart way
Once the Near.Store dongle is connected, the device uploads all products that the shop sells onto a dedicated online store. This doesn’t require any additional software installation, electricity, Wi-Fi, or entering any data manually.
The co-founder says that the startup’s platform has a database of close of two lakh products —with images and price range.
“With Near.Store, local stores become visible on Google search. Next time, if a customer within the vicinity of the shop is looking for a product available in the local shop will also feature in the search results along with other results from popular ecommerce websites. This will help the shops increase their business beyond the current customer base," says Ashish.
The digitisation of inventory and sales analysis means that member shops will have periodic sales and inventory reports. At the same time, using AI/ML, Near.Store can predict and advise them on the SKUs that sell better, enhancing the overall efficiency and reducing their working capital requirements.
"Our first B2B customer was also the first customer demo we ever did – the store owner was so amazed at how easy the whole process was that he didn’t let us take away the demo device. Our first B2C customers were quite easy to come by as we were one of the few online grocers active during the lockdown," recalls Ashish.
In January 2020, Near.Store raised $300,000 from Sauce Venture Capital and launched the product during the COVID-19 crisis, which enabled them to help kiranas ensure continued sales even during the lockdown.
The COVID-19 opportunity
Local shops are quite diverse with their own unique business approach in terms of the products they sell, delivery channels they use, and even the working hours. "They also differ in the quantum of business and the number of customers they service," says Ashish.
Near.Store takes each of these factors into consideration and helps in creating a unique product catalogue for each shop.
During the lockdown, the startup faced several difficulties as stores were not being allowed to operate, had no stock or staff. However, the team supported its member stores by arranging fresh stock from wholesalers, connecting them with third-party logistics providers for deliveries, and aggregating bulk orders from housing societies.
According to Ashish, the first week post lockdown was the most difficult time. The startup had expanded its sales team in early 2020 and started onboarding shops when the pandemic hit and India went into a nationwide lockdown. The uncertainty of the situation was demotivating for the entire team. But the business model came to the rescue, helping it scale to a thousand stores.
"We charge a small transaction fee for facilitating each transaction. Our revenue is linked to our performance in helping the store get more business," says Ashish.
He credits this success also to senior advisors like Shripad Nadkarni, former Head of Marketing at Coca Cola and J&J. He is also the founder of Maverix, a food tech company.
Market and future
KPMG and E&Y data reveals that there are close to 12 million small stores in India. The opportunity to streamline these kiranas is even bigger because only 10 percent of the retail market is organised in the country. According to BCG, the retail industry in India is $750 billion market and is expected to be worth $1 trillion market in the next five years.
However, in this massive market, only a few players are focusing on the front-end tech for mom-and-pop shops. Near.Stores competes with the likes of Mobisy, Jumbotail, and SnapBizz.
In the next 18 months, Near.Store aims to onboard 5,000 shops and have a presence in at least four cities. It is currently operating in Mumbai and has set up a pilot in Bengaluru
With a large consumption opportunity of 17 million kirana stores across the country, Near.Store will remain a strong contender in this battle for the Indian consumer.
Edited by Megha Reddy
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Link : https://yourstory.com/2020/09/plug-and-play-device-mumbai-startup-near-store
Author :- Vishal Krishna ( )
September 28, 2020 at 04:05PM
YourStory