Rural-focused StoreKing in pact with Indian Oil

Program will see the setting up of kiosks at petrol bunks where customers will be able to order for products online

Assisted e-commerce platform StoreKing has tied up with Indian Oil Corporation (IOC) to provide services across petrol bunks in Tier-III and rural areas across the country. The partnership will give StoreKing access to 25,000 touch points across the country, of which 7,500 would be in rural locations.

The programme, being piloted in Karnataka, will see the setting up of kiosks at petrol bunks, where customers will be able to order for products online, pay for these and pick up deliveries. StoreKing and IOC plan to set up 250 such centres across the state by March.

“We have signed up with them to place a kiosk at every IOC petrol bunk to support our assisted e-commerce model. These store owners, who customers trust, will become the point of contact for buying, picking up the package and paying for the product,” said Sridhar Gundaiah, chief executive of StoreKing.

StoreKing, which is trying to disrupt the e-commerce model in rural and semi urban areas, shares between five per cent and eight per cent of the margins on each sale with franchise owners. While the tie up will help IOC petrol bunk owners earn additional income, the oil firm is looking at the partnership as a way to improve walk-ins.

“We have been looking at opportunities to get into e-commerce in the rural space because we have a very good network in villages. Rural areas of high importance to us because we want to add value for our customers there,” said P S Mony, deputy general manager and retail head for IOC in Karnataka.

India’s e-commerce market is expected to cross $12 billion in combined gross merchandise value (GMV) across all players by December. That is almost a three-fold growth in sales compared with the previous year with the combined GMV estimate being $4.5 billion.

Snapdeal, which is one among the big-three e-tailers in the country, claims 70 per cent of its customers come from outside of major metros. It says e-commerce is still growing in urban markets, but growth is being driven by Tier-II and III cities.

However, semi-urban and rural regions are still mostly unserved by e-commerce, given the lack of connectivity, lack of smartphone penetration and lack of logistics backend. Today, Storeking has a presence in 14,000 stores across 1,000 locations, majority of them being in the rural areas of states such as Karnataka, Tamil Nadu, Andhra Pradesh, Kerala, Maharashtra and Gujarat.

Using petrol bunks as dark house to aid deliveries is something global e-commerce giant Amazon has already begun experimenting with in India. The company partnered with Bharat Petroleum in June this year to allow in-store picks ups for customers at select locations. This, however, is still skewed towards urban locations.

Gundaiah sees a petrol pump owner making five orders on a daily basis, selling products worth Rs 7,000 to Rs 11,000 per month. Within a year, he expects the petrol pump franchisees to power between 10 per cent and 15 per cent of StoreKing’s revenue.

In 2015-16, StoreKing expects a turnover of Rs 400-450 crore. It says it’s almost breaking even and aims to do so by the end of next year. The company makes a profit on every sale, however. it is currently putting most money back into growing its operations.