Prem Kumar, CEO & Founder, Snapbizz, says every major bank and fintech is now partnering with Snapbizz to provide solutions to kirana stores.
New Delhi: Despite the devastating impact of the coronavirus pandemic, Kirana stores stepped up to keep their customers. As people were concerned about hygiene and safety, these Kirana stores switched to digital mode to compete with their e-commerce counterparts. Retail tech start-up Snapbizz provides a new-age solution to convert the neighbourhood retail and grocery stores. The startup has clocked Rs 7 crore revenue amidst the pandemic. The Sunday Guardian spoke to Prem Kumar, CEO & Founder, Snapbizz. Excerpts:
Q: Last month, Snapbizz released a report that stated that 2020 was the defining year for Kirana stores. How?
A: The effects of the pandemic have reverberated across multiple industries, including kiranas. Kiranas, overall, saw an increase in business to meet supplies of essentials. In an effort to meet this demand in a changing landscape, kiranas embraced a pull to digitization spanning demand, supply, and operational needs. Snapbizz worked closely with our kirana partners on this journey. Embracing this move to digitization, we’ve also seen strong demand from other players in the ecosystem–like banks–to meet the needs of the kiranas using this new platform, allowing for the creation of a more connected ecosystem. Every major bank and fintech is now partnering with Snapbizz to provide solutions to kirana stores on the Snapbizz platform as part of the connected POS Solutions ecosystem. Beyond market-participants, we’ve also seen global philanthropic organizations and NGOs like Samhita realizing the importance of fostering India’s largest trade channel, partnering and collaborating with Snapbizz to accelerate digitization. As the channel which reliably serviced 1.3billion population during the lockdown, kiranas established themselves as a resilient pillar in the FMCG space in India.
Q: More and more kirana stores are going digital with your business model. Do you think they will be able to compete with e-commerce platforms?
A: Traditional e-commerce in grocery contributes to 3% of market, and could and will grow to 10-15%, catering to specific categories which have higher value margins. However, in a country like India, where median basket-size is less than $5 and buyers value the benefits of knowing the customer, kiranas are a complimentary channel that will always co-exist given their key strengths: customer-driven assortment, close proximity, and flexible credits (khata). FMCG e-commerce models have been experimented with for over 10 years, but are yet to demonstrate profitable models in the space and customer-base that value kiranas. In fact, Snapbizz can help e-commerce be competitive in this space by connecting them with kiranas; some of the largest e-commerce players are joining the Snapbizz connected-ecosystem platform of kiranas for assisted e-commerce and other opportunities that leverage kirana strengths.
Q: How SnapBizz contributed to the growth and development of these kirana stores?
A: We have developed a unique technology solution for kirana stores that transform them into a smart store with the help of a few plug-and-play options. Our solutions enable the store owners to leverage their strengths (proximity/ convenience, personal touch, assortment) to gain a competitive edge and improve profitability. Our “money-making machine” enables them to manage and optimise store operations, take the store online instantly, create virtual merchandising space inside the store, engage with their consumers outside the store, get promotions/discounts from brands/suppliers and cloud-connect them to all the FMCG eco-system stakeholders such as brands, wholesalers, distributors, research agencies, e-commerce players and financial service players. We like to be perceived as the brother of the kirana store owner who is sitting inside the store and helping in acquire new customers, sell more to the current customers and optimise the supply-side relationship for the supply of goods and services.
Q: The pandemic has given unexpected challenges to the e-commerce sector. According to you, what lessons can be learned?
A: The kirana stores are the lifeline of the country serving 1.3 billion people across the country. The current situation will throw up two scenarios: (a) surges in orders, disruptions in supply chains, customer behaviour changes, store closures and more, (b) the new norm of doing business in the new economic environment.
Being the experts in grocery tech and FMCG ecosystem play, our relevance has exponentially gone up and we expect this to be the turning point in our journey. Our challenge now would be to keep pace with the expectations of our retailers and partners. We are strengthening our organisation on technology and data science to rise up to the new expectations of the market. We are enriching some of our product features such as SnapOrder (retailers’ B2C ordering app), SnapSupply (distributors’ B2B ordering app) and SnapPulse (retail analytics solution) which will enable the eco-system players to meet the current challenges. We have also rolled out a lighter version of our retail technology solution – exclusively for small kirana stores.
Q: How was Snapbizz affected due to the pandemic? How is it recovering?
A: Crises have a special quality–they accelerate the inexorable, and increase the need for partners who can deliver outcomes rapidly in this changing ecosystem. We saw this with kiranas’ move towards digitization in 2020. Having deeply partnered with kiranas over six years, Snapbizz had developed deep product-market fit and excellent execution tradecraft. This uniquely placed us to capture the digitization opportunity, but more importantly, be best placed to serve consumers retailers and ecosystem players during the pandemic. Our success with our partners in 2020 has created tailwinds for us, and our headstart and technical robustness is helping us grow very fast.
Q: It’s been more than six years since SnapBizz was launched. How has your journey been so far?
A: We are seeing interesting developments with regard to the disruptions/innovations being adopted by these solution providers by using technology. With drastic changes happening within the retail industry in the past few months due to Covid-19, we are seeing massive changes in the way brands and stores engage with the customers. For e.g., 1. Merchandising / POP activity being shifted from shelves to the customer’s phones via apps; 2. Packaging objective being shifted from pre-sales/attracting customers to being functional (packaging texture, easy-to-use, easy-to-open, durability etc.); 3. Contextual customer engagement by leveraging on data based on customer-buying behaviour (e.g. If I buy a box of green tea, I will get a discount coupon for digestive biscuits via SMS). Therefore, we will see much greater collaboration between these solution providers and retail technology players to drive these innovations further.
Q: What are the challenges that the FMCG sector is facing right now? How can they overcome those challenges?
A: The FMCG sector is going through a transformation at a pace like never before, precipitated by an economic slow-down, shrinking wallets, and consumer sentiment. Shoppers and their shopping-pattern are changing, and this calls for a rethink of product-mix, marketing-mix and distribution-strategy. In parallel, technology and data are playing a role in contextual consumer engagement, real-time data and insights, and supply-chain and working-capital management. Our role as a vertical ecosystem platform with real-time access to consumer data has made us more relevant than ever before.
Q: What are your post Covid plans?
A: Covid has reinforced our belief in our purpose and journey. Encouraged by our impact and partnership with merchants and ecosystem players, we have doubled our efforts to scale up-and-out to create a wholly inclusive ecosystem. Firstly, while we focused on the large and midsized merchants in the past, we have now expanded our offerings in partnership with the fintech ecosystem to digitally and financially include smaller merchants and integrate them within the ecosystem. Secondly, having established a foothold in the urban markets, we are now expanding to include semi-urban and rural India, a demography that disproportionately relies on kiranas. The support from philanthropy has been a major catalyst in this initiative.
Q: What are your upcoming strategies to enhance your business model?
A: Our success is predicated on providing the best-experience to the merchant inside the store, and helping the merchant optimise demand-side relationships (sell more to current consumers and acquire new customers) and supply-side goods and money. In addition to investing in the product and analytics offerings reflecting this mission, the big events in the near future would involve: 1. Going pan-India and onboarding larger merchant segments to create a more inclusive ecosystem; 2. Major foray into the fintech space, to help merchants be better connected with supply-side financial partners. Lastly, we’re expanding the tried-and-tested model to new geographies and verticals to capture inbound traction from countries with fragmented retail ecosystem, and new industry verticals that are in dire need for our customer centric DNA.