Early morning bus rides to college taught this CA an important lesson about rural India. Here’s how he’s using it to rejuvenate rural commerce

Prasanna Kumar spent most early mornings of his youth travelling to his college located in a small town near his village in Karnataka, and back. His college was a bit far, and those early mornings gave him much time to ruminate and reflect on the changing world around him.


On those bus rides, he’d often strike up conversations with his co-passengers, who, more often than not, happened to be kirana shop owners, travelling to the town to replenish their store supplies. In the evenings, he’d run into the same crop of people — this time, weighed down with endless bags of supplies — on his way home.

"Just like every other village, ours had very infrequent buses, so when I used to travel in the morning to the town, kirana store owners also used to come in the same bus….The entire day I used to spend in college, and the kirana store owners used to spend in the market, procuring (supplies)," Prasanna tells YourStory in a conversation.

Having spent his entire childhood and most of his youth in rural India, Prasanna understood the struggles of the working class around him, especially the kirana store owners he commuted with almost every day of his college life. The problems they faced procuring supplies, having to carry them back all by themselves, sometimes even running out of essentials mid-week, stuck with him — but life had to go on, and Prasanna eventually put all these thoughts to the back of his mind.


Until a decade later into his career as a chartered accountant, that is.

Vilcart

"After working as a CA for 10 years, I was able to see the economic potential of rural India," he remarks.


And why not? Rural India is the Indian economy’s bedrock. Today, it contributes almost 46 percent to the country’s gross domestic product, is among the top employers in the country, and contains within it, almost two-thirds of the total workforce.


Every other company — from the startup ecosystem to India Inc — is reinventing itself to be able to tap the brimming potential rural India contains within, and not just from a customer/user perspective.


When Prasanna went back to the drawing board, 10 years after cutting his teeth in the corporate finance sector, he knew he wanted to solve for his kirana owner co-passengers.

He launched VilCart — an ecommerce platform that aims to simplify rural logistics for kirana shops, along with his co-founders, Mahesh Bhat, Rajasekhar, and Amith S Mali in 2018. Mahesh, Rajasekhar, and Amith all come from rural backgrounds, just like Prasanna, and have personally bore witness to the shortcomings of stores in rural India.

And when Prasanna told them what he had in mind, they decided to join him in his journey.

VilCart

Founding team of VilCart

Out with the old, in with the new

Self-styled as a startup that’s "bridging rural kirana stores", VilCart essentially solves rural retail stores' pain points around logistics, supply chain, and finance using digital technology. Its biggest USP is that it helps rural India access products and items that one wouldn’t ordinarily find at a non-urban store.


“What we’ve realised over the last three to four years building VilCart is that rural India wants to experience new products, but they’re not available easily," Prasanna says.


VilCart does what kirana store owners traditionally do - procure items and bring them back to the villages for retail. But it also takes it a step further and helps kiranas procure goods that they normally would not have because of any number of reasons, including a lack of demand and difficulty in transportation.


Initially, the startup started out with grocery deliveries and FMCG goods where a kirana store owner, using VilCart’s easy-to-use app or online platform, could place an order for the items he wanted to stock up on for local sales, and would have it delivered to his doorstep in around three days.


Now, VilCart offers owners the option to not only order run-of-the-mill, everyday items, but also special products such as electronics, home appliances, cattle feed, babycare items and toys, branded foods and snacks, among other things.

"Any product that launches in Urban India hits rural India in the next three to four years. But rural India is actually ready for the product from day one - and that is the problem we’re solving," Prasanna says.
rural commerce startup vilcart

For kirana shop owners, getting products beyond basic, daily necessities didn’t make economic sense because they weren’t sure if there’d be demand for those products. Also, carrying it all back on the bus, or even their own two-wheeler, was a logistical nightmare.


With VilCart, all that changed because its platform not only allows neighbourhood shops to place orders as per demand from users, but also delivers them to their doorsteps.


On the supply side, VilCart taps rural businesses for products too. For example, it often partners with small businesses in villages and lists other farmers’ goods on its platform so other kirana store owners can purchase, thereby generating sustainable, quick income for the farmer.


This circular economy model has not only helped create more employment opportunities in rural areas, but also made it easier for farmers to become proprietors of their own businesses and therefore earn more profit than they would have had they been supplying to a bigger corporation or selling via a middleman.

Does the business model work?

Yes, and the proof of the pudding is in the eating.


VilCart, since the first two years of its inception when it was servicing only one district in Karnataka, has today expanded to 5,000 villages, and serves more than 45,000 kirana stores. Its penetration and reach in Karnataka are nonpareil, and Prasanna says the venture's aim is to still push deeper into the State until every single kirana becomes its customer.

The profundity its near-absorption into the rural consumer cycle and pattern has unlocked has been valuable for the startup when it comes to deciphering buying patterns.
Vilcart

VilCart's penetration in India (Image source: VilCart)

Rural India consumers are greatly dependent on agricultural cycles such as crop cultivation or animal husbandry or cattle rearing — and those cycles decide their spending prowess at any given point in time.


VilCart, using the granular data it has collected since it started operating, optimises its product-push to shop owners and helps them make better decisions.


It is also able to predict, with relative accuracy, when sales of a particular product are likely to spike — and that helps it set up its sales strategy for the period.


"We capture data about every village, and even income and expenditure drivers, which depend on village-specific events like festivals and trade fairs (also known as ‘santhe’). These are important factors that drive consumption, and we capture all that data," Prasanna says.

Taking digital payments to Bharat

Credit or blame the likes of TikTok for having a FOMO effect and bringing more users in rural India online, the fact is that people in villages and small towns are no longer lagging behind their urban counterparts when it comes to accessing internet services. Jio has been a boon, especially for fintech startups driving their financial inclusion agenda to encompass India’s remotest regions.


VilCart has made a considerable difference in that sphere too.


“When we started out, we were only doing cash transactions. Today, there’s a good uptake of digital finance in rural areas, and people are willing to adopt such technologies, even though there’s definitely scope for more financial platforms and services," Prasanna quips.


To enable fintech services, VilCart has been exploring and striking partnerships with Gramin and regional banks, as well as private players looking to push more aggressively into rural areas.

Kiranas


Working towards profitability

Prasanna’s 10 years as a chartered accountant taught him a great many lessons about money, but the one he employs the most is financial conservatism.

VilCart, he says, is heading towards profitability. All its business units and divisions have hit operational breakeven, and its expenses are comfortably capped.

"Our capital efficiency is high, as is our return on capital employed, mostly because we’ve raised quite less (in VC funding). The conservatism they taught us as part of our CA curriculum has always helped — spend less, make more," he quips.


The startup has invested Rs 25 crore in the business so far, and is at an annual run rate of Rs 300 crore, Prasanna tells YourStory. He adds that the startup has nearly eight months of cash runway, currently, and is well capitalised.


“It’s just like running a home,” he chuckles in response when asked how he has managed to scale a startup that’s not even four years old yet.

“When I was young, I used to go shopping by myself. My parents used to give me money and I used to decide how to spend…I used to bargain with kiranas and vendors back then, and I still do that today to get the best rate for our kirana partners,” he says.

“I just do the same thing now (in my business), but with higher volumes and a team to back me up,” he adds.


VilCart’s growth story today not only speaks to the tactical gambits by its founders in navigating a sphere that’s reasonably little understood, but also the potential — and even more importantly, the need — for smart, tech-driven innovations that rural India is opening its doors to.


Edited by Teja Lele Desai

Source :- https://yourstory.com/ Author :- Aparajita Saxena ( ) Date :-March 11, 2022 at 06:15AM

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