Time was when the small kirana shop owner in an Indian village knew exactly what his customers needed. He knew who wanted which brand of soap, toothpaste, washing powder and in what quantities. He could estimate on a weekly, or even a daily basis, which items he was likely to sell and how much. He would visit the local wholesaler — the person between the distributor and the retailer — and stock up on what he needed, sometimes working on credit and at other times with payments made up front.
Then came television, followed by the Internet, and then the mobile phone. And in the ensuing information revolution, the customer became mercurial and unfathomable. He started looking for new, previously unheard of commodities. For the kirana store owner, the customer became a new animal with brand-new aspirations and unending, unpredictable desires.
That’s where StoreKing, a technology-enabled distribution platform for rural India, comes in. “A situation exists today where 30-40 per cent of the products that the retailer is offering are not wanted or required by the end consumer,” says Sridhar Gundaiah, founder of StoreKing. And in many cases, retailers are unable to provide the commodities that are wanted, he adds.
So the question is, how does one get the retailer to stock what his customer wants and buy it in the right quantities? How does one minimise wastage and hold low inventory?
Born in a small village in Karnataka, Gundaiah, who is an engineer with a masters degree in Internet technologies from the UK, always wanted to use technology to solve many of the problems that rural India faces. In 2010, he sold his previous venture Yulop, which provided location-based services, to Nokia and spent the next two years figuring out how to bridge the gap between what rural consumers wanted and what the local retailer was able to provide.
Gundaiah knew that technology, combined with big data, analytics and other tech tools, could solve this problem. And he could see that the retail market was growing steadily. In 2016 rural India alone spent $369 billion. The total Indian retail market is expected to touch $1700 billion by 2025 and a substantial portion of this is likely to be rural.
StoreKing, the vernacular app that Gundaiah and his co-founder Govaradhan Krishnappa developed and launched in 2013, makes a host of products available to retailers in the rural market. The app and its technology was designed and developed in-house.
StoreKing kicked off with just a few retailers in Karnataka. Today, it has spread to 10 states, including Andhra Pradesh, Telangana, Tamil Nadu, Kerala, Goa, Maharashtra, Madhya Pradesh and so on. The app is available in six regional languages — Kannada, Hindi, Tamil, Malayalam, Telugu and Marathi. Nearly 40,000 retailers use it now and about 70,000 transactions take place every day. Though retailers still opt for traditional methods of procuring products, many have started using the app for the access it gives to almost 50,000 products. “It works like an Amazon or a Flipkart plus offers additional products currently not available on such sites,” explains Gundaiah.
For retailers, StoreKing comes with multiple benefits. The availability of a wide range of new products has helped them expand the products they can offer as they are no longer restricted to what the wholesaler stocks. Further, it helps them overcome one major downside of traditional distribution: Though most retailers need credit, the distributor offers credit to only those he knows can be expected to deliver. StoreKing solves this problem by offering easy credit to retailers and has tied up with more than 25 banks for this.
Other advantages of using StoreKing are low inventory stocking, no new capital investment, earning commission on all orders and increased customer loyalty. Besides the range of goods offered by sites like Amazon, there’s a whole host of direct offers from companies, which includes a wide range of digital products. For most electronic goods the company offers after sales service, something previously unheard of in rural markets.
Headquartered in Bangalore, the company now has 400 employees but since technology is the keystone of StoreKing’s business, its 30-member tech team is really the backbone of the company. It also has a 250-strong sales force on the road who interact with retailers. Currently, it has two warehouses — in Hyderabad and Bangalore. The company has already raised two rounds of funding, amounting to a total of $22 million.
For StoreKing, it’s early days yet, but Gundaiah is convinced that there are many ways in which technology can make rural life better. StoreKing is just a start.