Project by: Hersh Sridhar Iyer, Michael Fahner, Charles Mangiardi, Yinghan Lin, Helen Zuo, Andrew Dermont, Alicia Brindisi
High Concept Statement:
“Seamless for grocery retail in India”
Need or Demand:
The motivation behind this idea came during a recent trip (Jan 2017) to India, where we learned that grocery retail is highly decentralized and unstructured, and has been so for decades. Big retailers take a fraction of the market compared to the approximately 12-15 million Kirana stores. While big retailers are embracing e-commerce, smaller, traditional retailers have lagged in terms of extracting value through digital presence. Our research revealed only one successful company in this space with a penetration of roughly 0.3% nationally, indicating that there is room for new entrants. At the same time, we are motivated by the incredible growth of the online retail industry in India. Food and grocery account for 60% (~$300B) of the overall retail market in India. The online grocery sector registered a value growth of 44% on a year-on-year basis in 2016 (fastest growing over the next 5 years) and the number of online consumers is expected to go from 35M in 2015 to an estimated 100M by the end of 2017. The Indian online grocery market is expected to hit $20B by 2020. Underlying Problems: For store owners: Most store owners lack a digital presence for use in online sales and marketing. They are losing market share (slowly but steadily) to new, e-commerce-based grocery retailers because they are unable to offer the level of convenience offered by e-Retailers through online platforms. This limits their ability to compete effectively in the market and makes it difficult to prevent loss of market share. Last but not least, store owners do not have an inventory management system, and are reactive in their stocking habits. This leads to a loss of revenue and reduces their ability to attract loyal customers. Our target customers in this category are stores with 200 sq ft- 2000 sq ft area and carry 1000 – 70,000+ unique products. For consumers: Customers are limited in the availability of a digital platform which allows them to shop online from stores in their neighborhood. The convenience arising from proximity to consumers’ homes and the personal level of service that consumers get from their trusted local retailers is only accessible through a visit to the store or sometimes through a phone-call/text message-based order. Despite knowing the items they want, stores that offer the product, and the option of free-delivery or timed pick-up, there is a lack of digital channels through which consumers can transact with the retailer. Our target segment in the consumer category are women in the 25-45 age group, with a minimum of high-school level education and belonging to households with medium to high levels of income. For both: Discovery of new stores is purely by coincidence or word-of-mouth. There is no digital platform which allows new retailers to proactively advertise their store-opening and for consumers to discover new stores in their neighborhood. Additionally, retailers are not able to inform customers of on-going promotions available at their store, and consequently consumers are not able to take advantage of such benefits until they visit the store.
Product / Service / Solution:
MyKirana is aimed at solving the all issues identified earlier and more, albeit in a predetermined order of importance which is based on utility/impact. It will have features for the following use-cases: For retailers: Provide retailers a digital footprint without investing in a website. Each retailer will have a personalized profile with all the information (location, products, delivery options, loyalty programs, reviews, accepted payment mechanisms, etc.,) necessary to help new and existing consumers discover and choose stores of their choice. Provide an Inventory Management platform. By virtue of the need to maintain a database of products for consumers, the app will serve as an inventory management system for retailers in the most basic form. Provide market insights. We will utilize purchase data to push information on market demand to assist retailers in inventory management. Brand and store-specific promotional campaigns. The app will enable stores to push promotions to customers and offer personalized offers/discounts. For consumers: Discover and review new and existing grocery stores in the areas of their choice Select preferred shops to buy from Create reusable lists of products which they wish to purchase from stores of their choice Setup scheduled purchases for staple/recurring items Specify pickup and delivery options at the time of the order Select preferred payment mechanisms Redeem loyalty points Connect their Facebook account to MyKirana to identify which of their friends shop from a particular store. Refer new customers to join MyKirana and earn points For both: Communication platform: At its core, MyKirana is a communication platform which connects retailers to consumers. Order transmission, payment, delivery/pickup, coupon use, order issues, promotion activation and the acknowledgement for each of these will be built into the app.
The value proposition for retailers comes from being able to access consumers through a new channel. A single retailer does not have the capacity to invest in a digital platform but, combined together on our platform, the millions of small retailers in India will be able to compete effectively in an increasingly digitalized market. The value proposition for consumers is the ability to get instant deliveries or pick up groceries from their favorite shops in their neighborhood by placing orders through the app. At the core of all this is local community development – giving business back to locally owned and operated businesses – is the value proposition for the community.
We like to think of competitors as comparators. We have identified two buckets of comparators: Comparators dealing with logistics: BigBasket (inventory-based business model) HumaraShop (hyperlocal business model) Kirana Now (Amazon – hyperlocal business model) Competitors without logistics: AaramShop Our differentiation on the consumer side market will arise from a simple, intuitive UX which takes the current physical shopping model and offers it on a smartphone using shopping-lists. Our proposed marketing model which will depend on careful market selection, customer referrals and customer representatives to promote local stores is another factor which will differentiate us from the only current competitor in an untapped market. Initially, we do not see any issues with getting Kirana owners to sign up for our platform because we do not plan on charging them. Subsequently, our growth on the consumer sign-ups will drive-up store owner’s willingness to be part of the platform and the virtuous cycle will continue. Our target is to have every Kirana owner on the platform, making it the one-stop-shop for e-commerce savvy consumers.
We see several options for monetization once we achieve minimum scale on the retailer and consumer side. Some revenue streams that we are planning for are: – Selling ad space to brands on MyKirana – Consumer subscription fees for free delivery (irrespective of minimum order size) – Retailer promotion/marketing campaign fees – Selling sales insights to stores, distributors and brands – Profit sharing with fintech companies (increased number of transactions) – App fee subscription/upgrade for – Inventory reports/competitor analysis – Multi-store inventory management for Kirana chains