Tech startups aided by enterprise capital (VC) have currently been eyeing an enormous unexplored retail market alternative within the nation, which has remained unorganised for a very long time. The $600-billion grocery retail market is majorly commanded by some 15-20 million kirana and small mom-and-pop shops. These small shops account for greater than 80% of the general retail trade itself, in keeping with a brokerage report on the B2B retail market revealed by BofA Securities in June this yr.
These numbers clearly show to be a big distribution alternative for start-ups within the B2B retail house, and for the previous few years, a number of fashions have cropped up in India which were making an attempt to disrupt the provision chain to kiranas and small outlets. While most kirana-focused B2B startups similar to Price Company, DealShare, StoreKirana and others are centered on turning into various suppliers or PoS software program suppliers to kiranas, Gurugram-based kirana-tech start-up 1K Kirana Bazaar is taking the franchisee path to crack the market alternative.
Founded in 2018 by Kumar Sangeetesh, Sachin Sharma and Abhishek Halder, the startup launched with an intention of serving the aspirations of the customers of India’s smaller cities and cities. With the rising want of going nearer to its goal demographic, 1K Kirana opened its first franchise retailer in early 2020. Fuelled by their $7-million Series A funding in August 2021, and a latest $25-million fund-raise from Info Edge, Alpha Wave and Kae Capital, the startup has served greater than 1,000,000 customers throughout greater than 25 districts throughout Delhi, Haryana, Rajasthan and Uttar Pradesh by means of a community of greater than 1,000 franchise shops.
Speaking to FE, Sangeetesh mentioned that almost all kirana outlets have a internet take-home margin of simply round 5% each month, and his enterprise mannequin is targeted on step by step rising the margin for kirana homeowners.
“While doing our market research, we realised that the average monthly revenue for kiranas is Rs 3 lakh, and if you take that 5% net margin that comes to just around Rs 15,000-20,000 per month. That’s almost similar to the minimum wage for a blue-collar worker in states like Haryana, who works eight-nine hours in a warehouse,” Sangeetesh added.
The 1K Kirana Bazaar mannequin is a leaf taken out of the OYO Rooms playbook, the place the startup is available in and re-brands an ‘underutilised’ asset to make it extra marketable and accessible to new customers. Just like how OYO takes over your entire resort or a number of resort rooms and standardises the tip product, 1K Kirana takes over the kirana retailer as a franchise companion. The startup additionally owns and operates its personal warehouses which are used as centralised services to inventory kirana franchisees close by. “Our current warehouse expansion plans are focused at a district level within states and we only cater to Tier-2 and below geographies currently. Once a warehouse is set up, we then go and acquire franchise partners near the warehouse geography. Currently, we are expanding in Rajasthan and Punjab and we are already present in 18 out of the 20 districts in Haryana. Next, we will expand to Western UP and Uttarakhand,” Sangeetesh mentioned.
The kirana-tech startup works on a revenue-share mannequin, and never on a fee mannequin that franchisers often function on. With OYO Rooms, the resort aggregator often takes a substantial fee reduce on a month-to-month foundation, however 1K Kirana as an alternative takes a small income share from the franchise companion. The kirana proprietor additionally has entry to a centralised order-management app, the place she or he locations orders for provides on-line, that are then delivered in lower than 24 hours to the shop.
There can be a consumer-facing app supplied by 1K Kirana, the place customers can view close by shops, place an internet order, and get it picked up immediately from the kirana retailer. Home deliveries, if any, are managed and offered by the kirana companion themselves.
“We don’t take a commission from kiranas on their supply orders. So we buy goods and supplies directly from the brand or retailer at a wholesale rate. The kirana franchisee sets the final price for the consumers and Kirana will make a profit on the consumer purchases offline,” Sangeetesh added. Apart from offering provides to shops, 1K Kirana additionally takes care of localised advertising and marketing for the franchise companions. The startup carries out offline advertising and marketing initiatives in hyperlocal geographies that it’s current in. “When we started marketing campaigns to increase footfall to the franchise stores, it was entirely a door-to-door pamphlet-distribution kind of campaign, and also involved hiring autos with loudspeakers that went around announcing the deals in that area. We then eventually also began digital and social media marketing as well, to acquire consumers directly through our consumer-facing app,” in keeping with Sangeetesh.
In FY22, 1K Kirana achieved an annual income fee of Rs 300 crore and is at present concentrating on to hit Rs 1,000 crore in ARR by means of enlargement plans into new geographies and scaling its franchise presence. Sangeetesh mentioned the corporate has already scaled up its warehouse capability from 200,000 sq ft to round 600,000 sq ft at present to fulfill these income targets.
Source: www.financialexpress.com”