E-commerce is a domain which has always excited me since my college days. I have a great passion towards e-commerce that urges me to keep thinking of new business idea and out of all my weird ideas one was Online Kirana store in the year 2008 (Just after my Post Graduation). The idea was very basic that time and thought was to empower small unorganized retail stores popularly known as Kirana Stores in India. With the setting up of big organized stores in India like Big Bazaar, Reliance Retails etc. it caught the attention of masses and made some impact to these unorganized retail stores that can be found around the corner of your house.
Being a regular reader of iamwire I read an article on Mr. Vijay Singh, CEO from Aaramshop.com and came to know about his website called Aaramshop.com. Aramshop is a website that operates in National Capital Region of India and offers FMCG and CPG goods. AaramShop is a platform for independent neighbourhood retailers (Kirana stores), where these unorganized retailers can connect with their local consumers and sell out products to their brand desire. I would like to wish Mr. Vijay Singh great success for his effort in e-retail.
Aaramshop recalled me off my whitepaper on e-Retail that I wrote in early 2008 and thought to share. E-commerce and E-retail are definitely the next big thing happening in India and if someone can invent or innovate with big unorganized sector in India then he can just dream of harvesting diamonds.
WHITE PAPER ON E-RETAIL
- By Mayank Singh
Retail Industry Overview in India (Source: TIE Retail Submit 2007)
Indian Retail Sector is changing gears but the smaller players need financial and managerial support to capitalize on the large opportunity. Currently Indian retail sector is US $300–330 billion with organized retail contributing 3–5% of the entire market. It is estimated that Indian retail industry is likely to grow up to US $400–450 billion by 2010 and the share of organized retail could go as high as 15–20%. The organized retail sector has enjoyed tremendous growth in India during the past five years. Almost all the big business groups are already in or planning to get on the Retail wagon. Almost all the big international Retail players are lobbying hard to get a foot in the Indian retail landscape.
Traditionally retailing in India can be traced to the emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers. Textiles sector with companies like Bombay Dyeing, Raymond’s, S Kumar’s and Grasim first saw the emergence of retail chains. Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches. Emergence of hyper and super markets trying to provide customer with 3 V’s – Value, Variety and Volume
ORGANIZED RETAIL GROWTH
- March of organized retail growth in India is irreversible, and inspiring a rush of real estate and related infrastructure development.
- Shopping malls are springing up in every big town at an unprecedented rate.
- Approx 450 Malls are at various stages of development all over the country
- Appropriate Supply chains being developed and activated to meet the increased consumer demand for a wide spectrum of goods.
But there is also an unorganized retail sector, which is very huge. These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week.
Kirana online comprises of an online trading of branded FMCG product which are available at nearby convenience store and giving the unorganized retail a new dimension. Kirana online at essentially aims at using IT for benefit and development of both small retailers as well as consumers. It will be empowering small retail shop owner to become organized. Kirana online will cater to those customers which some how don’t get time to fulfill their day to day house hold needs.
Business / idea
Kirana online a web portal. The portal will act as a marketer for small retailer who will become as a franchise partner for Kirana online. The website will be customer centric. Which will keep a record of the customer profile, address, his previous buy, mostly purchased products etc. The website will display wide variety of branded house hold products which are often purchased from the convenience stores. As soon as customer orders list of products, depending upon the locality of customer from the database an SMS will be sent to nearest franchised departmental store with list of order made and address of customer. The departmental stores will deliver the order to respective address. Delivery time would be maximum of 3 hrs after order is being placed. Customer can also choose a customized time depending upon the availability at home but the time should be always more than 2 hrs.
Kirana online is simply an intermediary service provider to small retailers and customer. The Kirana online will start its process in 3 different phases.
Phase-1: The phase 1 will be the initial phase of business model wherein the revenue generation would be from website ads and the fee taken from franchise retail stores. The business model in first phase will be simple. It will be like customer placing an order through website, then nearest franchised store will deliver the order and take the payment.
Phase-2: The phase 2 of the business will bring some changes to business model with introduction of Prepaid cards, Post Paid Cards (Can be called as Kirana credit card) and payment gateway provision via banks. The major problem being faced in e-commerce business is people afraid of using credit cards over the net. Second phase will be easing customers to make online payment via use of prepaid cards or post paid cards. Prepaid cards of customers will be charged by any particular amount from any franchised store which then eventually be used for online payment. Postpaid cards or as given a name to it i.e. Kirana credit card, this card will work like a credit card, will provide with monthly statement, will have some limit depending upon the customer but will only be used at Kirana online portal. The issuing of card will be depending upon various factors that are buying behavior, permanent address proof and holding any credit card for more than 3 years etc. This will give a new dimension for online buy behavior of consumers. The portal will also have online credit card payment option through various banks payment gateway.
Phase-3: This phase will come up with increase in responsibility of the business. The phase will have introduction of inventory management. The business model will have a big change wherein we will also maintain the inventory which would be distributed to the retail stores. This initiative will eliminate several intermediaries. Due to this prices and offering can be controlled and designed by us and we will be having an effect distribution channel to reach customers.
Kirana online website portal will be developed by a team of software engineers. The portal will be on open source technology. This will help in reducing cost for development to some extend.
Marketing, sales and customers
Potential customers: Kirana online aims to cover the entire country. But initially we will begin with one city i.e. suppose NCR. Potential customers for our portal will be working wives with busy schedule couldn’t find time to shop house hold requirements, office going bachelors or spinsters and people who want an ease in life like an IT professional who keeps surfing net at office hours can take 5 mins break to shop his day to day house hold needs and the order will be delivered to him while he reach back home.
Sales Strategy: Sales strategy is always directly proportional to what customer sees. Customer sees for demand generation, browse and research, service and support, re marketing etc. Demand generation will be maintained by various offers and coupons distributed among customers. Demand will also be created through franchises who will promote the services to their existing customers. Word of mouth will play an important role in this. The portal will be maintaining the previous buy data of their register user which would be saving time for the customer and provide an ease in browsing their often purchased products. A toll free number would be provided for the customer to track their order. Customers would be update about the latest offering on that product which they generally buy via email. The portal will show most buying products over first page so that customer doesn’t waste time in browsing the product. The portal will not only have ads but will also provide services like product display which will rank the product of respective company on top and service like product mail which mail about product to customers.
Market Analysis: Products being displayed over the website would be based on marketing research. Based on research product sold through all these convenience store would be available at portal. Pricing of the products will also be research based wherein the prices will be displayed after a discussion with franchises and keeping their margins in mind. Portal aims at tapping the whole country but initially it will start with its focused operations at one city i.e. Delhi NCR. Delhi NCR has large number of small retail store, we need to tap at least one retail store in one locality.
Competitors: Kirana online’s will have various direct and indirect competitors who are into retail business. Direct competitors can be web portals like future bazzar.com, homeshop18.com etc. Indirect customers will be both big and small retailers like big bazaar, subhiksha, and small convenience stores etc.
Competitive advantages and disadvantages: Kirana online will have a competitive advantage in their delivery process with Rs. 0 shipping charge. With giving them feel of product being distributed from their near by store. The theme of this will also speak the same i.e. “Aab aapka Kirana hua online”.
Before completion of phase 3 of project the main disadvantage would be in the prices being offered due to large number of intermediaries involved.
Points to be taken care
- Proper functioning of portal with database maintenance so that order should be always address to right customer and right store.
- Franchised store should be strictly made punctual in delivering the order.
- Research always been conducted on the buying behavior or customer like products being purchased, which is less in demand, which is more etc. to make search easy for customer.
- Customer loyalty programs to be conducted.