The great outdated neighbourhood kirana retailer has been attracting a variety of consideration from monetary know-how (fintech) corporations in latest instances. Eyeing the massive reservoir of client information these shops possess, fintech corporations are devising methods to make operations smoother for them — be it by launching apps or level of sale (POS) methods.
Paytm introduced a Rs 100 crore loyalty programme for kirana shops in May, and had even launched an internet ledger for kirana shops, known as Paytm Enterprise Khata, in January this yr. One other fintech firm PayNearby has rolled out a hyperlocal supply app for basic retailer retailers, whereas Pine Labs plans to launch a low-cost POS (level of sale) fee system for these retailer homeowners. Others like BharatPe, PhonePe and Mswipe have additionally rolled out merchandise for small store homeowners.
The largest problem kirana shops face, in accordance with RedSeer Consulting’s survey carried out in December final yr, is credit score assortment from prospects, adopted by problem in accounting or bookkeeping. These fintech apps are leaping on the alternative, contemplating that there are about 1.2 crore kirana shops, which account for nearly 90% of the FMCG gross sales within the nation, as per Nielsen.
Level of scale
PayNearby began partaking with kirana shops again in 2016 below its Agent Banking system that allows retailers to supply providers reminiscent of dishing out cash to the top client. It at present has tie-ups with over 8.5 lakh retailers. The corporate has lately launched a hyperlocal discovery app, BuyNearby.
Anand Kumar Bajaj, MD and CEO, PayNearby, says, “Kiranas are important for our business, and hence, we wanted to ensure their survival in this age of e-commerce and modern trade.” Apart from providing providers like product discovery and digital funds to the top client, the app permits retailers to put bulk orders to their distributors, provides them a number of fee choices and maintains a file of credit score given to prospects. BuyNearby has over 50,000 registered customers, of which over 15,000 are energetic and should not being monetised.
“The app helps us enroll retailers for our agent banking programme. But we plan to monetise the data that comes our way through the app,” Bajaj provides.
Pine Labs, by its POS fee system, plans to succeed in one lakh retailers within the subsequent 12 months. “Our current customers make digital transactions worth Rs 1.5-2 lakh per month, but now we are eying retailers who earn less than Rs 50,000 a month,” says Kush Mehra, chief enterprise officer at Pine Labs. Its POS terminals will settle for fee from numerous modes reminiscent of wallets, playing cards and QR codes. Whereas the corporate can be monetising this platform, it’s taking a look at providing monetary merchandise to those retailers with the assistance of the information collected, and likewise partnering with different gamers who provide options for bookkeeping, provide chain, and so forth.
Paytm helps kiranas digitise and develop their companies, “by offering them technology solutions such as an all-in-one Android POS device, all-in-one QR and Paytm Business Khata,” says a Paytm spokesperson. The corporate says that its all-in-one QR permits retailers to just accept funds by Paytm pockets, Rupay playing cards and all UPI-based fee apps, into their bank accounts with none charge.
Consultants say that whereas tie-ups with kirana shops maintain potential for fintech corporations, they should face many roadblocks alongside the best way.
“Fintech companies will have a difficult time ensuring the loyalty of these kirana stores, given the stiff competition. In addition, direct distribution to kiranas has been built over many decades, and most FMCG companies will not be keen on giving up this direct reach to kiranas,” says Rajat Wahi, companion, Deloitte India.
In keeping with Vivek Belgavi, companion and chief, fintech, PwC India, these corporations should keep excessive stickiness and engagement metrics to monetise. “If that is achieved, fintech companies could become the gateway to a whole suite of financial (and non-financial) products, from lending to investments and insurance,” he provides.
Foremost, nonetheless, is the kirana retailer proprietor’s willingness to conform. As Subhendu Roy, companion, client and retail industries, Kearney, says, there may very well be resistance from them in adopting new applied sciences and digitising their processes.
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