How retail-tech platform Kirana Club tackling FMCG distribution problems

Indian retail industry is one of the most competitive sectors with varied players. From millions of kiranas to global retail giants to e-commerce players; millions of brands try each day to take a share of customers' wallet. Despite the entry of several e-commerce players, Indian retail space is still dominated by kiranas. The country is home to nearly 13 million Kirana stores which play a crucial role in the $850 billion-strong retail industry of the country. However, these kirana store owners operate in isolation with little access to real-time business information such as pricing, and quality of products among others.

'Kirana Club' is a retail-tech platform that is trying to bridge the problem of information asymmetry. Similarly, (FMCG) brands rely heavily on sales and marketing initiative to grab market share. By onboarding lakhs of retailers, Kirana Club is providing a platform for FMCG brands to attract retail stores for buying their products. In a conversation with Bizz Buzz, the Founder of Kirana Club, Anshul Gupta said the company has already onboarded seven lakh kiranas in a short span of time and aims to reach one million kiranas by December this year. The platform charges no fees from kiranas and its monetisation plans include charging the brands that are coming onboard on Kirana Club. The company, which has raised a seed round last December, is in the process of raising funds from investors. It currently has a sound presence in seven states and is planning to go pan India afterwards

Indian retail industry seems to be a tough nut to crack for many global players. How do you see this space as a retail-tech player? How do you view the role of Kiranas in the emerging retail space?

My entire career was in retail-tech. I have made products for big retailers in the United States and in India. But the thing is whatever works in the west can't be replicated in emerging economies like India because we are completely different. We have the units called Kiranas. Unlike developed countries, India buys groceries in many lots. The reason is that is how our economy is. People ask what will happen to kiranas after 20 years. Will these be gone? The answer is no. The reason is they hold 90 per cent share of Indian retail and going ahead, they will have that kind of share.

Please throw some light into your journey so far in building 'Kirana Club.'

My exposure to kiranas goes back to childhood. A lot of relatives are running grocery stores. My summer vacation had always been spent on sitting on the grocery stores, looking at the products. One thing, we notice in India is the business runs on trust and relationship. Any business to business (B2B) operations that is done is based on trust and relationship. If I know that guy for some time, then I will be more comfortable in doing business. Value comes second. Secondly, India is a community-based society. We started Kirana Club with a community approach where we give Kiranas the platform to have access to millions of other kiranas, which gives the knowhow to take better decisions. So, community of kiranas brings the trust in the system. It brings the neutrality and also forms the relationship. That's how Kirana Club started and we achieved quick access. We have onboarded seven lakh plus retailer in a span of seven-eight months. And the retention rate and engagement are all time high on the platform. The driving factor behind forming a community is to bring the neutrality and trust. Two factors remain constant for kiranas over the years. Firstly where do they buy their products and what product should they buy? Today, 10,000-15,000 products are launched every year. Everything is packaged. Earlier, the option for buying was limited to only a few distributors. Today, there are multiple options, multiple distributors. So, running a kirana business is much more complex now. Because of this complexity, we provide a platform to get those information.

How does your initiative of community building solve the problem of modern day kiranas?

What we are trying to do is to connect the kiranas with the brands. Our platform has kirana-first approach and it is absolutely free for kiranas. This will remain so forever. Meanwhile, FMCG brands face a lot of challenges in reaching out to kiranas. Selling a product is not easy. For instance, suppose a company has a biscuit brand and there are 100 other brands which are competing to occupy the same space in shelves of kirana stores. The kirana store has a limited space. So, he can keep only two-three brands. It is, therefore, important to influence the kiranas for keeping the brands. Today, FMCG brands are heavily relying on feet on street approach to convince retail stores for keeping their products. These are not data-driven. Many of the time, sales people even don't communicate the trade schemes. In our platform, we communicate every information through various ways like small videos to retail store owners. With content and brand building, we are generating the demand in the kirana side. We are converting the push model to a pull model. Going ahead, we have plans to onboard distributors on our platform. Right now, our focus is on kiranas and brands. We will tap other opportunities as we grow.

What are your expansion plans in terms of geographies and capacities? Where do you see your reach by end of this fiscal year?

By December, we are looking for one million plus download. That's what our target is. In terms of cities, we want to stick to the region that we are currently present. We are heavily penetrated in seven States. We want to go deeper there. The plan is to expand pan India in the first half of 2023 and then, onboard retailers across India. Seven key States are Uttar Pradesh, Maharashtra, Rajasthan, Madhya Pradesh, Gujarat, Bihar, and NCR (National Capital Region).

What is your fund raising plans as you expand operations?

We have raised a seed round in December, 2020. We are in the process of fund raising. We are in good stages. We have the thought process that we want to build a business that generates good revenue and profits. Even post the seed round, we have generated decent amount of revenue. Monetisation is something, which is crystal clear to us from day one.

We are monetising from those people who have already money to pay. These people (FMCG brands) are spending their money. Another thing is we want to build a tech-company and not an operationally-led business. This will be a high-margin business.

As far as brand onboarding is concerned, we have been very selective. That is reason that we are making case studies. Because, when we make companies at scale, we want everything is figured out. Currently, we are focussed on creating value than monetisation for kiranas. Offerings for brands will evolve in the next six to nine months.