Here’s How Indian Hyperlocal Industry is Attracting Investors
- BY Jaspreet Kaur
Feature Writer, BusinessEx
- Feb 24,2020
- 17 Mins Read
The Mumbai-based e-commerce platform, Near.Store has a distinct approach as its business model helps shop owners (kirana stores) to establish their online stores effectively. The plug and play hyper local platform facilitating offline stores has lately secured $300,000 in seed funding from Sauce.vc and other individual investors.
“The Near.Store team has a deep and intrinsic understanding of the Indian Digital space and a proven history of creating and running successful companies. Kirana stores are the mainstay of India’s CPG landscape and getting them digital ready in a zero- effort manner holds great potential for the entire retail ecosystem,” said Manu Chandra, Founder, Sauce.vc said in the company’s official statement.
Apart from helping kirana stores make their online presence, Near.store boosts sales of these stores by informing customers in the vicinity about their products. Added convenience of online ordering also assists the shopkeepers in maintaining their customer’s loyalties.
“Most traditional stores on average maintain 5 -10 thousand SKUs (Stock keeping units). For many stores, who have attempted to go online, the first step of uploading the SKUs is often daunting and acts as a deterrent. Additional requirements, such as the need to have a continuous online promotion and maintain a separate payment system etc are equally challenging,” Ashish Kumar, Founder at Near.Store, said in the company’s official statement.
The Ease of Doing Business for Kirana Stores
The Mumbai-headquartered hyperlocal platform visions to make every local kirana store digitise. The company essentially trims down the efforts of the shop owners to create online catalogue, integrate payment gateway and capture pictures as it has automated the process in entirety. It simplifies the process by offering a dongle, which plugs itself in the existing system. Thus, the shop owners don’t need to utilise extra resources for going online and can focus on increasing their sales.
To enable the service of this hyperlocal platform, a shop owner simply needs to plug in its dongle into their existing bar-code scanner or billing system. The device does not require any additional internet connection, software, electricity or lengthy implementation process.
“Our product is completely technology-driven as there is no human intervention. Our dongle once gets connected, takes all barcodes that it scans and automatically creates a webstore. The company has created a very large database of barcodes, which garners information, barcodes, good quality images and product description etc. So, everytime a product is sold by a shop owner, an online automated catalogue gets created instantly. Thus, shop owners neither have to do any extra work nor we have to do,” Kumar, explaining its product, told BusinessEx.
Near.Store is one of its kinds in the hyperlocal e-commerce industry. The company employs technology uniquely, which it asserts to have developed in house. Another aspect that distinguishes it, is--patent pending--means the company is seeking protection for its underlying invention from the patent office. Once it is approved, the company can probably devoid of any competitors using a similar business model.
The company aims to cater to the needs of nearly 12 million kirana stores in India by helping them go online. Also, the founding team carries an immense experience in digital businesses. These factors have caught investors’ attention and helped it secure money in the pilot stage.
Emerging Hyperlocal Ecosystem
In the Indian retail space, more than 95 per cent sales happen offline through physical stores. In essence, Kirana owners are the ones who give instant delivery to the consumers. Due to intricacy in digitising process, kirana store owners are facing competition from e-commerce retail firms like Flipkart, Amazon and IndiaMart. Addressing this need, startups are entering the niche and mediating between local shop owners as well as consumers. This novel business approach, in turn, is attracting investors as local shop owners already have that base infrastructure in place. The sole thing is that they need to digitise to scale up and sell their products to a wide customer base.
Taking in consideration the needs of local customers, traditional shop owners are prime to fulfill product demands. Thus, the hyperlocal ecosystem will possibly thrive and sustain in the country for a long time.
Other Deals in Hyperlocal Ecosystem
As the hyperlocal community is emerging, various business transactions have been witnessed in the arena. Hyperlocal delivery startup, Dunzo has recently garnered $11 million in venture debt fund from Alteria Capital. The funding will have the company to become profitable again, reported Business Insider.
Reliance Industries, which has already acclaimed recognition in the grocery space, is reportedly planning to establish a kirana-driven delivery model in its new commerce strategy, Credit Suisse, reported Press Trust of India.
The conglomerate company plans to bring kirana stores on board and virtualise them through its merchant point of sale system (POS).
According to a report by KenResearch, “ The Hyperlocal market in India has grown at a growth rate of 71per cent in 2015. The hyperlocal industry in India is comprised of various segments such as logistics, food, groceries, pharmacy, horizontal and concierge segment that comprises various companies.”
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