Ru­ral ki­rana stores reach for tech­nol­ogy

Business Standard - - COMPANIES - ANJULI BHAR­GAVA

Time was when the small ki­rana shop owner in an In­dian vil­lage knew ex­actly what his cus­tomers needed. He knew who wanted which brand of soap, tooth­paste, wash­ing pow­der and in what quan­ti­ties. He could es­ti­mate on a weekly, or even a daily ba­sis, which items he was likely to sell and how much. He would visit the lo­cal whole­saler — the per­son be­tween the dis­trib­u­tor and the re­tailer — and stock up on what he needed, some­times work­ing on credit and at other times with pay­ments made up front.

Then came tele­vi­sion, fol­lowed by the In­ter­net, and then the mo­bile phone. And in the en­su­ing in­for­ma­tion revo­lu­tion, the cus­tomer be­came mer­cu­rial and un­fath­omable. He started look­ing for new, pre­vi­ously un­heard of com­modi­ties. For the ki­rana store owner, the cus­tomer be­came a new an­i­mal with brand-new as­pi­ra­tions and un­end­ing, un­pre­dictable de­sires.

That’s where StoreKing, a tech­nol­ogy-en­abled dis­tri­bu­tion plat­form for ru­ral In­dia, comes in. “A sit­u­a­tion ex­ists to­day where 30-40 per cent of the prod­ucts that the re­tailer is of­fer­ing are not wanted or re­quired by the end con­sumer,” says Sridhar Gundiah, founder of StoreKing. And in many cases, retailers are un­able to pro­vide the com­modi­ties that are wanted, he adds.

So the ques­tion is, how does one get the re­tailer to stock what his cus­tomer wants and buy it in the right quan­ti­ties? How does one min­imise wastage and hold low in­ven­tory?

“A SIT­U­A­TION EX­ISTS TO­DAY WHERE 30-40 PER CENT OF THE PROD­UCTS THAT THE RE­TAILER IS OF­FER­ING ARE NOT WANTED OR RE­QUIRED BY THE END CON­SUMER”

SRIDHAR GUNDIAH, Founder of StoreKing

Born in a small vil­lage in Kar­nataka, Gundiah, who is an engi­neer with a masters de­gree in In­ter­net tech­nolo­gies from the UK, al­ways wanted to use tech­nol­ogy to solve many of the prob­lems that ru­ral In­dia faces. In 2010, he sold his pre­vi­ous venture Yu­lop, which pro­vided lo­ca­tion-based ser­vices, to Nokia and spent the next two years fig­ur­ing out how to bridge the gap be­tween what ru­ral con­sumers wanted and what the lo­cal re­tailer was able to pro­vide.

Gundiah knew that tech­nol­ogy, com­bined with big data, an­a­lyt­ics and other tech tools, could solve this prob­lem. And he could see that the re­tail mar­ket was grow­ing steadily. In 2016 ru­ral In­dia alone spent $369 bil­lion. The to­tal In­dian re­tail mar­ket is ex­pected to touch $1700 bil­lion by 2025 and a sub­stan­tial por­tion of this is likely to be ru­ral. StoreKing, the ver­nac­u­lar app that Gundiah and his co­founder Go­varad­han Kr­ish­nappa de­vel­oped and launched in 2013, makes a host of prod­ucts avail­able to retailers in the ru­ral mar­ket. The app and its tech­nol­ogy was de­signed and de­vel­oped in-house.

StoreKing kicked off with just a few retailers in Kar­nataka. To­day, it has spread to 10 states, in­clud­ing Andhra Pradesh, Te­lan­gana, Tamil Nadu, Ker­ala, Goa, Ma­ha­rash­tra, Mad­hya Pradesh and so on. The app is avail­able in six re­gional lan­guages — Kan­nada, Hindi, Tamil, Malay­alam, Tel­ugu and Marathi. Nearly 40,000 retailers use it now and about 70,000 trans­ac­tions take place every day. Though retailers still opt for tra­di­tional meth­ods of procur­ing prod­ucts, many have started us­ing the app for the ac­cess it gives to al­most 50,000 prod­ucts. “It works like an Ama­zon or a Flip­kart plus of­fers ad­di­tional prod­ucts cur­rently not avail­able on such sites,” ex­plains Gundiah.

For retailers, StoreKing comes with mul­ti­ple ben­e­fits. The avail­abil­ity of a wide range of new prod­ucts has helped them ex­pand the prod­ucts they can of­fer as they are no longer re­stricted to what the whole­saler stocks. Fur­ther, it helps them over­come one ma­jor down­side of tra­di­tional dis­tri­bu­tion: Though most retailers need credit, the dis­trib­u­tor of­fers credit to only those he knows can be ex­pected to de­liver. StoreKing solves this prob­lem by of­fer­ing easy credit to retailers and has tied up with more than 25 banks for this.

Other ad­van­tages of us­ing StoreKing are low in­ven­tory stock­ing, no new cap­i­tal in­vest­ment, earn­ing com­mis­sion on all or­ders and in­creased cus­tomer loy­alty. Be­sides the range of goods of­fered by sites like Ama­zon, there’s a whole host of direct of­fers from com­pa­nies, which in­cludes a wide range of dig­i­tal prod­ucts. For most elec­tronic goods the com­pany of­fers af­ter sales ser­vice, some­thing pre­vi­ously un­heard of in ru­ral mar­kets.

Head­quar­tered in Ban­ga­lore, the com­pany now has 400 em­ploy­ees but since tech­nol­ogy is the key­stone of StoreKing’s busi­ness, its 30-mem­ber tech team is re­ally the back­bone of the com­pany. It also has a 250-strong sales force on the road who in­ter­act with retailers. Cur­rently, it has two ware­houses — in Hy­der­abad and Ban­ga­lore. The com­pany has al­ready raised two rounds of fund­ing, amount­ing to a to­tal of $22 mil­lion.

For StoreKing, it’s early days yet, but Gundiah is con­vinced that there are many ways in which tech­nol­ogy can make ru­ral life bet­ter. StoreKing is just a start.

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