E-commerce enabler Prozo plans to onboard 75-100 new brands this fiscal

Post pandemic, most industries were compelled to adapt to online mode of business to compete in this digital era. Small businesses and enterprises, with the help of technology, are now ready to compete with the big e-commerce brands in India. Bizz Buzz spoke with Ashvini Jakhar, Founder and CEO of Prozo, an e-commerce enabler and accelerator for SMEs, D2C brands and Enterprises, on the importance of integrated supply chain solutions to keep up with the growing consumer demands.

How has the demand and requirements of supply chain and logistics grown since the pandemic?

Since the beginning of the pandemic, the markets have been shifting online. Due to this, sellers who were operating offline had to move to online mode. There is a trend of offline sellers going online and brands investing more to grow online rapidly. The opportunity for warehousing and logistics is huge, with many brands going online, witnessing an increase in their revenue and thus, increasing their stocking points. I think, post Covid, the demand for supply chain and logistics has democratized in a very significant way. Prior to pandemic, the players were based regionally. But the moment the demand went online, even the regional players got access to a national market. So, that's when we experienced a demand boom as well.

Your company has engaged with giant e-commerce businesses in India. What are your plans to collaborate with the MSME segment?

Our main theme is to enable the Direct to Consumer (D2C) brands and MSME sectors. But what do MSMEs require from us? There are four key elements. One being access to affordable, integrated supply chain technology solutions enabling them to sell online. Secondly, warehousing and fulfillment services wherein companies do not have to unnecessarily go for a (warehouse) lock-in period for three or four years. Thirdly, pan-India fulfillment network where we offer small businesses integrated technology and pay-per-use warehousing facilities without getting into long-term leases, or huge capital expenditure. Lastly, it is to help sellers list and go live on over 20 online e-commerce platforms within 48 to 72 hours.

Earlier, these companies would have taken six months to one year to get into this process or they wouldn't have been able to do that at all. This is where our relevance to MSME segment comes in. We tell these companies that supply chain excellence is possible on a pay-per-use basis. So, when small businesses use our services, we ensure they are as competent as their biggest competitors in terms of customer acquisition.

What would be the targeted client base by the end of this financial year?

So, by the end of this financial year, we will be onboarding 75 to 100 brands with an overall Gross Merchandise Value (GMV) of Rs 1,000 crore, split between small and large brands. We are already handling a Gross Merchandise Value (GMV) close to over Rs 400 crore to Rs 450 crore.

Any plans to go for another funding round? What has been the revenue jump for your company since 2020?

We have already capitalized. Historically, we have raised $3 million, i.e., Rs 22 crore and this was done in March to April this year. So, we will be raising our next round of capital soon. This year, we have grown 5x compared to last year. So, almost 500 per cent.

What are your plans to enter into tier-2 and tier-3 cities for operations?

We are already present in Noida and Hyderabad and have recently opened fulfillment centres in Kolkata and Bhiwandi. Going forward, we would be working very closely with the third-party warehousing partners in Tier-2 and 3 cities as well and we will give them access to our integrated supply chain technology platform so that they can further empower businesses in their cities.

In your opinion, how streamlined is supply chain and logistics segments in India?

Fundamentally, supply chain needs some inherent fixes. Everything in between the goods getting manufactured at the facilities and reaching the customer, comes within the realm of supply chain. SMEs, D2C brands and Enterprises have to work with multiple players in the eco-system. When you have so many small pieces in a puzzle, and for everything to fall into a place harmoniously, the supply chain part gets complex which might need inherent fixing and this is in every country. Supply chains are evolving. First there was the offline supply chainthen big companies like Amazon and Flipkart came followed by the emergence of other e-commerce platforms. Very soon you will have super apps coming.

In a sense, demand is getting fragmented across multiple offline and online channels. Organizations have to adapt their supply chains to meet this fragmented demand. If companies don't have a flexible, linear supply chain, they will face challenges offering a consistent consumer experience across demand channels. We as consumers are also becoming very demanding, and supply chain needs to evolve in order to meet the demand. This would also require some introspection.

What is the level of environmental consciousness that Prozo has adapted?

There is quite some environmental consciousness in the way we operate our business. I come from a defence background, I was a naval officer before starting my journey as an entrepreneur and that becomes very core to people like us because environment comes first. In fact, packaging material used in all our warehouses across the country is biodegradable. Also, we maintain a green belt around all our warehousing premises.

How many fulfillment centres are you planning to add in the next few years?

As of now, we have six centres. In the next two years, we will be increasing the footprints upto 100 fulfillment centres. We are looking into setting up in metropolitan cities such as Bangalore, Chennai, Cochin, and up in northeast we will be looking into Guwahati. In north, we will be entering regions such as Jammu and for central it will be Raipur and Patna.

What has been your observation on the emerging segment of D2C?

D2C is the way to go. Most D2C brands are SMEs. It is any brand that is going to consumer directly. Now, D2C can be venture capital funded company or an SME. What brands are doing is catering to target audiences through their own channels and websites. We are a big enabler of D2C brands on the warehousing and freight aspect. Since these businesses are direct to consumers, their products are authentic and priced competitively. Big e-commerce platforms are launching their own private label brands and the small businesses have to compete with them. Building a product is easier, building a brand is difficult. So, in this era, I don't think not going direct to consumer is a choice anymore.

Which are the new industrial segments using supply chain and logistics since the pandemic?

We have seen a couple of trends emerge through this period. There are a large number of medical device brands available in the market across online platforms. Second trend that we noticed is less consumer focused categories like sports equipment have moved online. Thirdly, large equipments such as treadmills are being bought online. Earlier, consumers would think how such large equipments would be delivered and if the delivery partner would be able to handle it well. There is also a surge within the B2B segment wherein industrial equipments like drilling machines are being sold online. Post Covid, everything has gone online to such an extent, that a large number of industrial companies, which had primarily been B2B focussed, are also leveraging on e-commerce a lot more than before.