 "Prem Kumar, founder and chief executive officer of SnapBizz")
Santosh Kumar, a grocer in Hyderabad, till recently was seeing a shift in loyalties, courtesy the advent of big-box retail chains, e-commerce and m-commerce players which make huge marketing spends and dole out massive discounts to woo customers.
Kumar was facing plummeting footfall and declining basket sizes (average purchase per person).
| FACT BOX |
|
A friend advised him to try out the end-to-end retail technology solution of Bengaluru-based SnapBizz Cloudtech that enables smart store management and a digital connection to consumers, fast-moving consumer goods (FMCG) companies and distributors. Now, Kumar is among the growing number of traditional retailers to have embraced the technology, which helped improve their profitability by over 20 per cent.
Virtual supermarkets
"In a diverse market like India, where traditional kirana stores contribute 90 per cent to consumer spending, SnapBizz is looking at transforming the face of the small-scale retail sector and empower kirana stores not only to be competition-ready but also giving them an edge by making them virtual supermarkets," says founder and chief executive officer Prem Kumar.
The Android-based on-the-cloud solution, comprising a tablet, barcode scanner, printer and a LED display, connects all the dots of the fragmented FMCG ecosystems - brands, retailers, consumers, wholesalers and distributors - and addresses the pain points of all stakeholders.
Brands and marketers can engage directly with end-consumers and offer services like a supermarket through the LED screen put up at the kirana store that entice them to buy more. More, the solution enables marketers to instantly reach out to retailers with promotions and trade communication, track a brand's real-time performance and penetration, with micro details such as share-in-shop and out-of-stock data.
The platform helps retailers get schemes from brands directly, check excess stock, purchase smarter, get existing customers to shop more, attract customers and create store loyalty, manage credit and push offers through SMSes, send special greetings and reminders, bill multiple customers at the same time and also provide online shopping.
Attracts Ratan Tata
The unique way of reversing the marginalisation of traditional retailers attracted the interest of Ratan Tata. The Tata Sons chairman emeritus invested an undisclosed amount in SnapBizz last month. The company had announced a Series-A funding of $7.2 million, led by Jungle Ventures, Taurus Value Creation, Konly Venture and Blume Ventures, in January.
"Traditional retail is a big part of the $130-billion FMCG sector, of which probably only 10 per cent is digitally included. There is still a huge white space, a huge opportunity to tap into," Kumar says, adding SnapBizz's investors believe traditional retail is here to stay. David Gowdey, managing partner at Jungle Ventures, says their investment thesis centred on the belief that unorganised retail will continue to be a very large percentage of overall retail spending by consumers.
"Kirana stores will continue to drive an enormous amount of retail sales. The retail dynamics in India are very similar to that of other countries in southeast Asia like Philippines and Indonesia. Given Jungle Ventures' coverage across the broader region, we have been helping them examine their expansion opportunities in Asia. We believe there are substantial opportunities for SnapBizz around the region," he adds.
Founded in 2013, SnapBizz's solution is priced at Rs 35,000, with a payback period of four to six months. The retailer starts raking in moolah by using the product from the first or second month. Kumar, however, says SnapBizz actually makes money not from the retailer but from brands, marketers, distributors and cash and carry players.
Currently working with 1,000 stores across Mumbai, Pune, Delhi, Hyderabad, Chennai and Bengaluru, SnapBizz is going through an accelerated phase, aiming at scaling up to 1,000 stores each month, over the next year. "We plan to enter 20-25 tier-I and tier-II cities in the current year, and should be in 55 cities by next year. Our idea is to capture all those outlets, which account for 35-50 per cent sales of a city," Kumar adds.
EXPERT TAKE: OP Khanduja
Traditional kirana stores, 85 per cent of the retail sector, face a big problem of last-mile connectivity. SnapBizz is making a great effort in bridging this gap that hasn't been done before, especially the direct link between FMCG companies, kirana stores and their consumers. The model is highly scalable because the last mile-connect relevance is across regions and categories of the business. I have not seen a more holistic approach to the issue. For instance, it is connecting FMCG companies to a shopper in the store via an LED screen display and outside the store through SMSes and apps, to the retailer directly, and distributors to the retailers. The start-up is also providing business insights. SnapBizz puts FMCG companies' product/promotion right in front of shoppers' face through its digital LED display.
It's much better than the physical POS material, as these stores do not have good shelves for display. It also helps FMCG companies communicate with consumers through targeted SMS campaigns and enables brand switching. More, brands get the consumer basket analysis to increase their promotion effectiveness, and cluster stores to reduce spending and increase the return on investment. SnapBizz should think about more verticals and types of stores. Through the present solution, it should impact as many stores as possible and as quickly as it can.
OP Khanduja is business head of multi-brand FMCG firm DS Group
