Overview of Tech Enabled B2B Distribution Startups.
Syed Osama Jameel
Uplifting Retail | FMCG Change Maker | Market & Academic Research | Consumer Insights | Writer
Discussing how B2B Startups ( Tajir, Jugnu, Bazaar Technologies, Dastgyr and Retailo Technologies ) have Empowered Kiryana Retailers.
INTRODUCTION
As Food and grocery are basic needs of human so wherever you go you will definitely find a grocery store nearby whether small or big.
kiryana stores ( Mini Marts) have a big market share in retail sector
On average, a kiryana store owner buys stock that will last them a few days ( because of less capital ) from the distributor’s representative who visits once a week.
Once this stock runs out, the owner can either wait until the distributor visits next week or they can visit the wholesale market.
There are pros and cons with both approaches. The former means the owner risks losing out on potential customers due to the lack of stock and the for going to wholesale market means there is a cost of transportation and time involved – which can cut into their margins.
The B2B startups that are addressing this gap are game changers for the sector, especially for these kiryana store owners.
MY EXAMPLE
After working almost for almost 4 years at different big and small grocery stores ( lmt, GT) and interacting with different retailers.
i have felt the pain and hardships of these small kiryana Retailers whose family & livelihood is based on a store with limited capital.
Problems & Difficulties
Sharing GT stores problem by which a small kiryana Retailer faces difficulty in purchasing stock
FROM DISTRIBUTORS
- Now days companies distributor's Don't work on credit with small retailers, only on cash. So when the order Booker visited the shop and retailer was not able to give a bulk order as he had to cover up other things also .
- When the Order Booker visits the shop sometimes it happens that retailer is busy in dealing with customers and is not able to give attention to Order Booker this result in incomplete order giving.
- Not all but some Order Bookers when they know that their target's are acheived then they do half Area ( missing some shops especially those for which they have to travel long)
WHOLESALE MARKET ISSUES
- Time consumption in market as finding lowest price and fresh stock.
- Billing Errors by wholesaler sometimes
- Transportation Costs and safety risk
- Manually hand written almost un readable bills by the wholesalers ( this thing hurted me the most in starting days of shop as I wasn't able to understand the writing of shopkeepers)
So it was very hactic for a small retailer who is alone handling shop .
Now How change happened?
Launched and becoming fully functional in almost start of 2020.
These B2B startups ( Jugnu , Dastgyr , Tajir , Bazar startups ) filled the much awaited gap.
Benefits of these online platforms
- Almost all major grocery related items available .
- Delivery within 12 to 24 hours.
- Best trade prices as compared with wholesale market and even sometimes lesser then the distributor's price
- Clear Printed bills.
- All apps selling genuine stock till date.
- Free delivery.
- Retailer or procurement person gets messages of latest promos and trade schemes and order status.
- User friendly App.
CHALLENGES FOR STARTUPS
Also there are some Challenges for these startups in market such as
- High Operational costs
- Very Very low margins
- high inventory cost.
- Overall its a game of ECONOMIES OF SCALE
- Not all kiryana Retailers are tech savy. -Adaptation of technology and android phone is still a problem for many kiryana Retailers.
- startups Cannot Provide after sales service such as replacement of Expired products
and many others hidden EXPENSES and challenges.
CONCLUSION
its not possible for start-up to 100 % change the market.
Traditional way is also there and will be going along.
BUT
even if they would have tapped small portion of market
still i would be supporting them
Because they have created ease and a new option for procurement of stock for Retailers without hassle to leave shop
and also created job opportunities for youth
RECOMMENDATIONS
if one ask from me what best thing osama likes regarding these startups
In one sentence I would say
answer is
"They listen to their customers"
Because
in past years i have knocked doors of these startups co-founders regarding recommendations to improve overall Customer experience, Glitches in app and highlighting continuing problems with solutions which a kiryana Retailer face through their End.
and they were kind enough for giving time and attention.
And these amazing people were always opened to listen and working day and night to resolve problems through dedication.
Dear Babar Khan, Sharoon Saleem , Muhammad Owais Qureshi and team of these startups, you people are amazing
"you all are amazing" .
Just wanted to say a note of Thanks for whatever you had done so far .
#syedosamajameel #retail #experience
Sr Territory Sales Manager at Dalda Foods Ltd
1 年Great case study relevant to retail market,
Daraz wherehouse inventory team| jugnu settelment officer| Inbound Sales Specialist at Neem.pro|Dex Express logistics intern|Nestlé?sales operations
2 年Retilo?
Trainer| Teacher| Mentor| Graduate Teaching Assistant| PhD Student at School of Education and Human Resource Development - Texas A&M University|
2 年Great job Osama. Keep sharing valuable insights.
CFO | EMBA [IBA] | Hubco | Chartered Accountant | Entrepreneur | x Bazaar | x Deloitte [Big4] | Digital Transformation
2 年I will always support these start-ups. However, they need to develop a working model that can last. Currently, the model is not financially viable. The fulfilment cost to deliver the order size of 15-20k does not make financial sense.
Founder & CEO at Al-Noor Marketing | Co-Founder & CMO at InstaCare
2 年Read your article. You have explained the basics of Distribution Business Nicely. Just adding to your article, Most if not all; of these digital startups are ?? working on Burn Models. Which means they are not making any profit. They are actually working on loss. They are mostly sourcing products from unofficial channels. Buying expensive and selling cheaper in markets to disrupt conventional distribution channels. They don’t provide market credit directly. They do it through 3rd parties which take commissions aka interest. Lastly there presence is very limited only in major cities. Also let me add that Tech distributors do not have the financial capacity to do primary sales of all companies nationwide. Example: Any reasonable fmcg has a distribution network of around 200-300 distributors across the country. All of these distributions are influential in their territories and they help fmcg companies in managing operations and also pay companies in advance i.e. primary sales. So a primary sale of around 4-5 billion rupees for an average company. Now if you understand, the financial model tech distributors do not have the financial capability to handle such primary sales for every company.