@nstoretechnologies Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially
The Nallakeerai team hosted a farmer’s market event that was held over two days (on 12th and 13th August 2018) in Chennai. It was a food festival featuring traditional South Indian fare, talks by experts on how ‘Food is medicine’, and cultural programmes featuring songs sung during sowing and harvest seasons. Also, the event ended with the team picking eminent, path-breaking farmers for the awards from across the State.
In addition, the nStore team was proud to receive the Technology Partner from Nallakeerai. It was a testament to the role of technology in streamlining the fresh produce supply chain and providing timely access to information.
This was way back in June 2016 when I was leading an organization successfully in the Retail Payment space in India and enjoying the work that I was doing, As part of my work, I visited many stores to educate them to accept digital payments and everywhere I met with the
same answer that Cash is more convenient and that there is least or no interest in accepting digital payments unless forced by the consumer. From a consumer’s perspective, it made no difference to a majority of population in spite of penetration of digital banking,
wallets et.al.
One day I presented to the board that engaging with the retailer will prove more effective in the long run if we do not go with a pointed product/solution but instead offer a holistic solution towards building an ecosystem. The concept was appreciated and I was motivated
to do a study on the ecosystem components that are useful for the retailer.
After a month of study, I came up with a list and more importantly the study gave me insights that there is an opportunity in the vast unorganized retail segment in the country if we play it right.
Suddenly, one fine evening as I was preparing to leave office around 8.00 p.m. there was a message that the Country has demonetized Rs. 500/- and Rs. 1000/- notes and a huge demonetization exercise will take place. After two months of mayhem, as the dust settled down
on one of the country’s largest stimuli program, one thing that certainly happened is that retailers started realizing the power of digital.
Acceptance of everything in the digital space began. Many changes happened in my life between Sep 2016 to Dec 2016 and suddenly I was looking at an uncertain future for myself in the organization as the group was going through a major change. But one thing
remained deep rooted in me that the idea that dawned upon me has got the potential and there is an opportunity if I am able to put together a right team.
Looking for Believers in the Idea
Though there is an opporutnity, I realised that in order for this to see the light of success, I will need a team of like-minded people with complementing skills who believe in the idea, to join the core team. I went over my network of friends to identify my team of co-founders.
I reached out to my roommate in college who was then working with a large MNC handling operations and support and when I bounced off this idea with him he readily agreed to be part of this and to my surprise he said he tried doing something in 2014 but did not get the
time and team to take it forward.
Finding the first co-founder was both satisfying and reassuring, and as I reached home, I decided to jump into this. One thing followed the other and by 10 Feb 2017 we had registered the Company nStore Technologies Private Limited.
Now both of us reached out to another friend who has been an entrepreneur for 10 years and shared our idea and to our surprise he said there is a base platform that he has built and we can use that to build our platform, however he may not be able to join us full time
as he has other committements but he assured us of full support in taking this forward.
Without an office and people we slowly moved ahead to create the platform that we wanted. However, we were aware that in order to progress rapidly, we need someone who understands retail and software development to join the team and play the role of an architect.
Two months passed and by June 2017 I was back again in Chennai and this time meeting my school mates over dinner and some of us are meeting after 15 years. I decided to announce my venture to my friends and one of my close friends in the group heard the story
and said he specializes in retail and has worked extensively in the US and UK geographies to help large retailers create systems and processes to scale their Business.
That day, I decided that if nStore has to move forward he should be part of the core team. So I reached out to him to take him through the idea. With him joing nStore, this venture started taking shape with inputs coming in from three complementingskill sets.
One thing that was common across all the four people is the belief that there is an opportunity and that if we play it right and keep our cool we can make it.Keep at it Now we have 3 minds applying themselves into this project and it would help if we have an anchor customer to use the product that we are creating and it would be good if he can pay for our services.
Next 3 months from July 2017 went in identifying the customer and by December 2017 with the help of all the connects and relationships that I had made in the Industry, We got our first customer who paid us some money to deliver this by March 2018.
Over this period and till date, one thing that all three of us realize is that whenever we feel low and dejected, an opportunity presents itself, lifts our spirits and gives us the confidence and courage to keep pushing forward.
Also, by December 2017 we got our first employee who had around 15 years of experience and who believed in this story and decided to help us with Enterprise partnerships and lead the sales engagements.
The teams grew bigger with each one belieiving in the story and wanting to push the agenda forward one step at a time.
By March 2018, we delivered this product to the anchor customer and by June 2018 we wanted to take this to the retail market in Chennai while continuing our efforts to build the partnership ecosystem and offer this platform to more such enterprises.
We now needed an investor who can back us up and support our efforts financially and one who understands the importance of “VALUE CREATION over VALUATION”.
What started in February 2018 ended in September 2018 when the investor decided to support the venture.
While we face challenges in terms of infrastructure, finances and rejections from investors for being in a crowded market and no differentiation, one thing that keeps us moving forward is the belief and positive affirmation that are customers and partners have
bestowed upon us.
Today as we look at what we have achieved in the last two years… we managed I
NR 4 Crores GMV processed through our platform.
300,000+ unique customers touched through our platform
3 Enterprise Customers
5 Ecosystem Partners
500+ stores
Unique Rural Engagement for the platform
And this is just the beginning…
From Farm to Phone : The project that brings farmers and customers on a single platform.
Click here to view the article
https://www.thehindu.com/society/from-farm-to-phone/article27797443.ece
Deshpande Foundation hosted a ‘National Summit for Catalysing Grassroots Micro Entrepreneurship’ in Hubli from 18 to 19 July 2019. The theme of the conference was “Building potential partnerships to impact a billion people through micro-entrepreneurship in India”.
The objective was to create a conducive ecosystem for all stakeholders that fosters development through mutual exchange of knowledge and resources. Pradeep Sampath (CEO & Co-founder of nStore) participated in the event as an elite panelist for a panel discussion
on ‘Ecosystem Development for Micro Entrepreneurship development’
With increase in mobile penetration in India to over 80% today, consumers expect more out of their mobile interactions apart from instant access to information. Consequently, every industry is reorienting itself around the consumer (including traditionally
enterprise-focused industries) and there is a renewed vigor across markets to understand their consumers.
The consumerization of industries has led to a paradigm shift in the way business is conducted across sectors – they are increasingly adopting digitization. The Fast-Moving Consumer Goods (FMCG) and Retail sector is close to (savvy and demanding) consumers,
has manifold supply chain complexities and is fragmented. A vast country with far-flung markets, diverse consumer segments and traditional supply chains add to the challenges in smooth digital adoption for this sector.
FMCG Retail growth in semi-urban and rural outpacing urban segments
FMCG is the 4th largest sector in the Indian economy with Household and Personal Care accounting for 50 per cent of FMCG sales in India. Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector.
The urban segment with revenue share of around 55 per cent is the largest contributor to the sector. However, in the last few years, the growth rate of the FMCG market in rural India is higher than that of urban India. Semi-urban and rural segments
are growing at a rapid pace and FMCG products account for 50 per cent of total rural spending.
Leveraging technology to streamline the FMCG Retail value chain in semi-urban and rural segments, as well as under-served urban segments can unlock significant efficiencies and growth for the industry.
What is the state of digitization in FMCG Retail India today?
While the sector has realized the need for digitization, the long tail of this market makes it a difficult proposition. With a vast unorganized segment – the neighbour hood stores, kiranas, small brands, unbranded products – that contribute to over 85% of this market,
driving technology adoption is truly a mammoth task.
Two broad trends are emerging in the market –
Consumer-focused digital adoption – This is been spearheaded by the online eCommerce giants joined by the hyper local players such as Swiggy and Dunzo. They promise convenience, and aim to fulfill consumer needs anytime and anywhere.
Supply Chain disinter mediation – There are many emerging providers focusing on driving efficiencies in B2B by disinter mediating distributors and wholesalers.
While these are welcome trends in promoting digital adoption rate, this is not sufficient to drive digitization in the industry. The following factors continue to pose challenges –
The existing distribution chain is created over a long period and it is impractical to ignore that in the drive for adoption. The relationships forged and the value gained from the personal network through ‘non-digital’ means of transacting business is difficult to replicate
in the ‘digital’ world.
Credit plays a huge role in the supply chain. This is being almost wholly provided by distributors and wholesalers today. It will be an uphill task to manage the credit cycle without involvement from this segment.
Logistics of moving the product closer to the customer while maintaining the demand density is a significant challenge. Even big players continue to incur losses and are changing their business models to curtail this.
“Inclusive Adoption” is the way forward
The effective means of driving digital adoption across the sector is through what we call “Inclusive Adoption”.
What do we mean by Inclusive Adoption?Take all players in the value chain along the digital journey. The industry has found solutions for last-mile connectivity, improving demand density, reliable credit management etc. through the distribution channel.
This needs to be taken further in terms of driving digital adoption in key aspects that lag behind in leveraging technology such as ordering, inventory management and customer engagement etc. This will bring about huge benefits to the sector in terms of lower supply
chain costs, increase in consumer base and higher revenue per consumer.
In an initiative called Project Jayini, nStore Technologies Private Limited and Amshuhu iTech Solutions Private Limited give students an opportunity to study and the chance to gain work experience simultaneously.
The selected students will be pursuing an undergraduate BCA degree via online mode from Sastra University and they would be trained/groomed via real project experiences at nStore & Amshuhu. It is an effort that was developed primarily to create an ecosystem where students get closer experience to Industry and create a differentiator due to this package.
The students will be given a stipend during this period to cover the fees and incidental expenses. The training and orientation will cover all necessary skillsets to build a career in IT covering soft, behavioural, process, domain and technical skills. Lakshminarasimhan Rangachari, the CFO and Co-founder of nStore Technologies
As a start, more than 15 students have signed up to participate in this solid debut. Participating in this programme, which offers a fantastic platform for learning and working simultaneously, was a delight for both the students and their parents.
The CEO of Amshuhu, Balamurugan, gave the enrolled students orientation on the significance of this programme so they would be equipped for the first set of Project Jayini 2022
This initiative is expected to help hundreds of students to experience the right balance of academics and Industry experience. Project Jayini will enable students to earn and study at the same time.
Unorganised retail – the next wave of growth
Indian Retail is embracing digital like never before, especially the unorganised segment. Look around and one sees numerous examples of this. Be it the neighbourhood kirana shop, the mobile vegetable cart vendor, the local baker, the small fresh meat and fish vendor – every business has a foot in the door of digitization. This may not be in the form of sophisticated websites or fancy apps but through simple, ingenious combinations of everyday technology – such as WhatsApp and UPI-based payments that provide a good-enough or even great experience for their customers. The trend which was clearly there prior to Covid has only accelerated this year due to logistical and other constraints during lockdowns.
The pandemic especially has brought in several new players and intensified action from investors, big players and startups. In recent times, the industry has attracted interest and investment some of the largest Indian corporates and foreign investors who are looking to ride this wave – both offline and online. To name a few – Reliance Retail and its digital arm, JioMart (which has over US$10B investment from the likes of Facebook, Google and investors); Tata Group’s offline network, its app (Tata Cliq), its imminent stake in Big Basket (India’s largest grocery ecommerce) and its plans to build a super app for consumers; Walmart’s increasing stake in Flipkart, Amazon’s significant penetration in the market. The numbers justify the interest. The Indian Retail industry is estimated to be a US$1.2 Trillion market by 2023 (according to the management consultancy firm, RedSeer). The pie is huge and even a small portion of it would provide great scale to any business.
Despite significant challenges in supply chain and inventory tracking, ability to adopt to technology and sheer fragmentation of the market, all players areplacing their bets on the unorganised segment. With over 85% of trade happening through this segment – it is a market that cannot be ignored.
Everyone wants a piece of the Online Grocery pie
Within the unorganised space, cracking the e-grocery delivery space is the ultimate prize. While fashion, apparel, accessories, electronics segments have seen significant growth; online grocery is the fastest-growing (57% CAGR according to RedSeer). As per a recent RedSeer report, Online grocery is expected to reach a market size of US$18 Bn by 2024, and comprise 2.3% of the overall food and grocery market in India. Grocery is a hugely attractive segment – it has the highest customer-stickiness through weekly or monthly purchases of consumables and is unparalleled in terms of potential growth opportunity. It is also the most challenging segment due to inherent supply chain challenges and low margins. With everyone from established players to startups alike making attempts to “organise” theunorganized grocery segment through technology offerings, we see the space segregated largely into four buckets.
Online Market Places & Inventory Led players (Amazon, Flipkart, Reliance Jio, Big Basket) – typically big players with deep pockets, strong logistics networks;some also have offline retail presence
Aggregator Platforms focused on Customers(Swiggy, Zomato, Dunzo etc.) – they were in the aggregation business already (typically, food delivery) and quickly swung to grocery during the pandemic
Aggregator Platforms focused on the Supply Chain (Udaan, Jumbotail, ShopKirana) – they are looking to enable retailers by bringing in efficiencies upstream (distributor and supplier side solutions)
New Age Fintechs offering online presence to Retailers (Dukaan, Bikayi, DotPe etc.) – they are looking to leverage the extensive merchant base to whom they already offer Credit, Accounting or other technology-based financial services
Online Market Places & Inventory Led players (Amazon, Flipkart, Reliance Jio, Big Basket)
They largely control the customer experience and once ordersare placed on the platform, they are fulfilled through the store or their warehouses. These players leverage categories like Fashion, Apparels, Electronics etc. in their marketplace model to cover for the lower margins that Grocery has. The high cost of logistics and last mile delivery make FMCG and Grocery loss leaders.
Hence, they look at outsourcinglast mile delivery to the neighborhood stores and reduce the costs; but are unable to succeed as they do not have visibility on the products and prices at the shop-level and the customer experience is inconsistent.
To increase margins and engagement, they offer private label brands to these stores and consumers which is a threat to the established FMCG brands who have developed this channel.
Aggregator Platforms focused on Customers(Swiggy, Zomato, Dunzo etc.)
They extended their aggregation service of local restaurants to grocery stores. They simply aggregate the stores in the neighborhood and present them through their app. The catalogue and price are largely controlled by the platform. The platforms also handle the customer experience and the promise of delivering in 1-hour.
This model also has lowmargins since grocery does not justify thehigh costs of delivery agents;as opposed to the food delivery business up to 30% commissions are obtained. With the aim to cut costs and improve efficiencies, they have resorted to creating dark stores (fulfillment centres) that wouldstock products that are often ordered in that locality
Aggregator Platforms focused on the Supply Chain (Udaan, Jumbotail, ShopKirana)
These players focus on disintermediating the Supplier and Distributor ecosystem. They offer products and credit to retailers to buy from the platform.
A major challenge they haveis an aggregated exposure of the credit risk which was earlier decentralized across multiple distributors
New Age Fintechs offering online presence to Retailers (Dukaan, Bikayi,DotPe etc.)
These are largely fintech players who offer a Do It Yourself (DIY) platform for the retailer to setup a store and offer their products online to their existing set of customers. However, this does require handholding the retailers and offering support to them – despite the DIY label. Only those retailers who are digital savvy (which are far and few) are able to adapt well to these platforms.
It is a long haul. Who will prevail?
The players who are willing to engage with retailers, handhold them through the journey and who are genuinely focused on providing value to the small retailers are the ones most likely to succeed in the long term. Short term focus and “quick-fixes” need to be scaled effectively to stand the test of time. Just this year, Zomato which ventured into the e-grocery delivery business, scaled down or shut down in various cities within afew months of starting it. Success in this space requires deep pockets and a deep understanding of the market coupled with the ability to be nimble and innovative. The market is still evolving and there is no one size fits all.
