At your neighbourhood retail store, you ask for a particular brand of cheese. The storekeeper says it’s out of stock, and that there will be a supply in a couple of days. But when you visit two days later, it still isn’t available. The shopkeeper has a hassled look, and struggles to divide his attention between customers and salesmen.
You go elsewhere for the cheese.
The shopkeeper’s entire backend operation of procuring all your essential items is a complicated one, involving multiple people. Different products are delivered to retailers by different salesmen and area distributors. A large retail chain, on the other hand, not only buys directly from the manufacturer, but also has the technology for inventory management and forecasting sales. However, small and medium retailers are now shifting to the more convenient digital form of placing orders and paying for them.
Digital panacea
One of the companies aiding this transformation is Bengaluru-based start-up Shotang, which connects retailers and manufacturers. “We have an app in which the retailer places orders. The system, over a period of time, tells him what to order for; he makes payments for all the orders, in cash or digitally,” explains Anish Basu Roy, Co-Founder & CEO.
There is a platform for sellers too, where the products are listed. “We feed intelligence to them as well, like the price range, what is moving and so on, so that they can build their inventory intelligently,” he explains.
In the traditional, manual process, manufacturers didn’t know where the demand was coming from, or where it was likely to come from, or at what price products might sell. At the other end, retailers were unaware of the products manufacturers had and what offers they were running. Digitisation resolves these issues.
Shotang now operates in seven cities, with a team of over 300 employees, and has around 16,000 retailers on board. The company was part of the Microsoft Accelerator programme. “Shotang was chosen for its strong business model and its relevance to retail businesses. They have demonstrated it is possible to take on a local problem and solve it with great success,” says Bala Girisaballa, Managing Director, Microsoft Accelerator India.
Unique logistics solution
Shotang’s unique logistics solution enables product delivery in 24 hours. “For example, consider a mobile phone retailer who orders 15 handsets from five suppliers in the city,” explains Roy. “Our boys go to the suppliers, pick up the products and bring them to the transit hub, where they get segregated according to retail orders. From there, a delivery fleet goes out on a ‘milk run,’ delivering products to one retailer at a time and collecting payment. We have this unique capability to deal with multi-product, multi-supplier, multi-payment checkout transactions.”
Anterpreet Singh, Co-Founder, Shotang, says retailers usually spend a lot of time talking to each product supplier. “So, the first thing we wanted to change was, make it one payment, one order, one delivery. That is the reason we thought of bringing in everything at one place and rebundling everything,” he says.
Singh says they don’t overwhelm the trader with technology. “Our platform is built in such a way that the retailer sees a lot of things familiar to him. Our person goes to the retailer, handholds him over months, not weeks. Once he gets familiar, then we build the stuff for him,” he says.
Changing offline retail
One of the benefits of the app is that retailers need not file invoices for future reference. All details, like what product was bought, from whom, at what price, and how the payment was made are recorded in the Account History.
The platform also enables small retailers to get loans, which is usually difficult. “Shotang has tied up with digital NBFCs that underwrite a line of credit to the retailer on the basis of transactions on Shotang, which is treated as creditworthy or KYC information,” says Roy.
Jayaroopa Jeyabarathi, Principal, Patamar Capital (formerly Unitus Impact), one of the investors, says, “Shotang is changing offline retail for good. It empowers retailers by providing efficient and reliable access to goods, enables access to credit and helps businesses comply with requirements like GST. Manufacturers and brands are also able to optimise the traditional distribution channel.”
