German enterprise software maker SAP AG is about to embark on what may be its most unorthodox undertaking yet - trying to reach out to India’s eight million kirana or ‘mom and pop’ stores.
In a move that signifies a slow shift away from its core software licence business, which has seen a demand slump this year, SAP is looking to connect kirana stores, CPG (consumer packaged goods) companies and banks through its new software platform.
Called project ‘Ganges’, which is being touted as a business network built in India and for India, the new initiative will bring value to all points across the retail network.
Interestingly, SAP’s move comes two days after IT firm Infosys released a similar retail platform.
“In the retail network, there are three major players — the kirana stores, the CPG companies and banks. What Ganges does is to allow the kirana store to reliably predict the demand for his products. Consequentially, the data from the kirana stores will allow CPG companies such as Nestle to ensure better and more efficient supply of products,” said Vishal Sikka, Member of the Executive Board, while addressing reporters here on Wednesday.
“Finally, it allows banks to reduce their loan risk. By bringing in transparency into the retail process, it allows banks to reliably assess the loans they give out to kirana owners. Banks can also help the kirana owners adjust their credit limit based on store sales,” Mr. Sikka added.
Mr. Sikka, who, rumour has it, is being groomed to take over as the next CEO of SAP, is primarily responsible for the company’s shift toward non-traditional business in India and other markets.
Ganges is primarily executed through a combination of digital POS (point of sale) machines, which are used by retail shop owners, business network software based on SAP’s HANA platform, and a software centre manned by SAP.
Kirana owners can purchase the POS machine, which will be manufactured by SAP’s partners, for as little as Rs.5,000. CPG companies, on the other hand, will have to pay SAP through a subscription-based model.
(This correspondent was in Bangalore at the invitation of the company)
