Having the second-largest internet user base in the world and the government pushing and promoting digitisation has resulted in technology-led disruptions in almost every sector in India. In 2018, the number of internet users exceeded 450 Mn, by the end of 2019 this number is expected to reach to 627 Mn.
While the government continues to focus on creating a digital infrastructure at the grassroot level with the Digital India programme, supporting this agenda are factors such as cheaper mobile tariffs and smartphones, digital literacy and more. And one of the first sectors to get the tech revamp has been fintech. Fintech penetration is often seen as a symbol of how progressive a country’s digital ecosystem is. These days Indians can not just make transactions but also invest, lend and manage their finances online and at home. But that’s only a reality in most major cities, as rural fintech adoption remains low.
As fintech is so deeply linked with ecommerce, the growth for ecommerce is also largely restricted to metros as companies continue to struggle with last-mile delivery and other logistics issues. This hampers the growth of both the fintech and the ecommerce sector.
However, IBEF projects internet penetration in rural areas to grow to 45% by 2021, almost double compared to the current rate of 23.87%. Further, an EY 2019 trend report pointed out that in the next four years, the rural online retail market will be a $10Bn to $12 Bn opportunity. Naturally, several startups are rising up to the challenge of serving the underserved rural sector in ecommerce, and tackling challenges such as logistics which have stumped major companies. Among the startups that are helping ecommerce companies complete last-mile delivery to remote areas is NextDoorHub.
Initiating the project in 2017, Kumar P Saha is trying to bridge the rural and urban divide in ecommerce with NextDoorHub. And given Saha’s background in fintech, the entrepreneur was more than familiar with the challenges. He is the founder of Senrysa Technologies, a fintech company largely into financial inclusion and payment solutions working in the rural areas for almost a decade.
Though competition is stiff, the startup sets itself apart by its ‘assisted ecommerce’ model and last-mile delivery solutions for both urban and rural areas in India.
‘One Shoe Doesn’t Fit All’ Approach Of NextDoorHub
Saha founded NextDoorHub with the motto that in a country as diverse and vast as India, one shoe doesn’t fit all. Even with the challenges that exist in the rural ecommerce market, there had to be a solution to bring users onto ecommerce. Believing ecommerce growth to be based on three factors — awareness, experience and habit — NextDoorHub aims to bring a change in how people shop online.
People in the rural areas are aware of online shopping but they have not been able to experience it properly yet, Saha said. “Unless they get this experience, they will not make it a habit. Our target is to give them a good experience because only then they will make it into a habit just like urban people,” he added.
Having worked in rural parts of the country for almost a decade now, Saha came up with a model that suits the aspirations of rural India. According to him, assisted ecommerce is the current need for the rural market, as it will boost the much-needed trust factor for India’s online shopping. This assisted ecommerce is carried by ‘eShops’ or ‘estores’, where users from rural areas get assistance to order on nextdoorhub.com, make payments, pick up deliveries and any stumbling block they may encounter when shopping online.
With this model, Saha told Inc42 that NextDoorHub is trying to work on value change. In addition to providing assistance in the shopping experience, through their eshop they reach out to the many MSMEs in the rural areas and offer to be a seller for them in both the domestic market and the international market. So NextDoorHub not only solves the problems for consumers but also for businesses catering to these users in rural areas.
For the urban sector, NextDoorHub is setting up a ‘NextDoorHub Experience Centre’ where customers can come and experience different products that are usually not available in the retail market. These centres will also act as a pick-up point for all the deliverables and provide ‘Open Packet Delivery’ as well. Meaning, once the order is placed, the user can opt for the nearest ‘experience centre’, to pick up and view the package before making the payment.
While the ecommerce giants such as Flipkart, Amazon and Snapdeal are getting revenue from rural areas, this is still way behind urban India. With a model that is similar to what Alibaba is doing in China, NextDoorHub is aiming to be a hyperlocal, omnichannel ecommerce player in India. Saha said his belief is that the assisted ecommerce model will not work in the urban areas, and hence, they are working towards a more retail store experience to cater to all.
Saha believes online payment to be the biggest demotivator for the rural population and thus having a parent fintech firm, Senrysa Technologies is the biggest advantage for NextDoorHub. Thanks to Senrysa, NextDoorHub has its own payment solution in the app, which many banks in India are already using.
The major focus for NextDoorHub remains on users in the age group of 16-30 and it’s aiming to go beyond this segment and innovate to solve the ecommerce problems for those over 35 years of age.
Surprisingly, in rural India, the startup sees more women users who are looking to buy household items to be NextDoorHub’s most popular customers. This is important because not only is ecommerce and fintech adoption low in rural India but the gender gap in these metrics is high for rural India and NextDoorHub is solving this too.
NextDoorHub’s Position In The Ecommerce Market
Within a year and a half of its inception, NextDoorHub claims to have successfully built a robust platform that can cater to both sides of the country. It had a pilot programme on the first 5000 eshops, which gave it a better understanding of the taste and requirement of the segment they are catering to. This financial year, it is working towards increasing the estore network from 5,000 to 50,000.
For NextDoorHub, the eastern part of India is a big consumption market besides the user base in Uttar Pradesh, Madhya Pradesh from central India. Moreover, they are expanding their current operations in Maharashtra, Rajasthan, Punjab and more. With the awareness in the rural sector of India increasing, the only thing that still needs to be solved is the availability of product and services.
With the rise in the adoption of fintech and the number of smartphone users, it is evident that rural India is willing to accept technology innovations because of the ease in the system. Saha pointed out that ecommerce is still very small in terms of the total retail business in India. “We need more ease in the operations and it could have more prospects than what it has currently. The expectations are that by 2022 market share will be 5%, but if we are able to serve the area properly, the potential is much higher than 5%.”