India has an estimated 12 Mn Kirana stores. But the online visibility of these millions of stores has not been as optimal as its suppose to be considering their vastness in presence and number.
But not so long back, the mom-and-pop neighbourhood grocery stores or what they are commonly known as i.e. kirana stores evolved from being just the two-minute-away solutions for all gharwale needs to being essential entities to the ecommerce giants as they also started to use kirana stores as Intel to reach their local customers.
Amazon India did it, so did Myntra when it launched its MENSA Network. The country’s ubiquitous network of kirana stores was suddenly up for grabs by FMCG companies, Reliance Jio, etc. This was the beginning of micro-management of store clusters.
But, the premise of these business opportunities was laid on the requirements of the ecommerce industry and those opportunities did not necessarily solve the larger issue of how the kirana stores could be discovered.
Interestingly, startups are coming to the forefront to address this issue upfront, exploiting technological means to enable kirana stores to be involved with the means of modern trading. One such startup is O2Onow which Inc42 discovered during its eight-city event series BIGShift, organised in association with Amazon India.
Launched in September 2017 by Manoj Gaddam, Aradhana Kamidi, and Vikas Syam Navur, O2Onow is a smart-city derivative mobile app aimed at enriching the shopping experience of users in tier I and tier II cities.
With a team of 13 people, the Hyderabad-based startup functions as an offline store aggregator and a digital marketing platform for MSMEs envisioned towards transforming mom-and-pop stores to a bricks-and-clicks model. It is inherently cashing upon the primary factor which has also majorly been a hurdle for the Indian consumers to shop online – the ‘Trust’ factor.
On O2Onow, a consumer has an option to browse the available offers on her nearby store and either pay online or explore the physical purchase experience herself. The small retailers, on the other hand, are enticed with the vision to increase their reach in their neighbourhood community as well as the prospects of increasing their sales and dominance in the community market.
Although store locators as a means of adding convenience to the fast-paced urban lifestyle are nothing new. There are big players in the ring already; names like JustDial, Indiamart, Nowfloats, Paytm Mall, etc. might strike familiarity with us. Despite the presence of the eminent companies, O2Onow has retained the pitch and is playing shot after shot.
Digitising Kirana Stores The O2Onow Way
An idea can change the world. Or so it is said. But with O2Onow, it changed the way kirana stores are used and perceived in Hyderabad.
The idea to develop a digital platform to search local stores struck Manoj when he was searching for some local shops and their offers online but he could not find any. Since he could not find an online means to know about the offers that were available in the local stores, he thought of digitising the idea as a business by giving kirana stores an online presence at a low cost.
Of all the reasons why O2Onow came into existence, some of the crucial ones are to address for both consumers and the sellers on the lines of limited capital and knowledge; non-availability of suitable technology at low cost for seller promotion; ineffective and high costs of marketing and constraints on modernisation of expansion, difficulties in customer retention and customer engagement, amongst others.
After surveying almost 200 retailers, the founders got a fair idea about the problems and based on that, the prototype was built. In the process, they gained a proper understanding of the concerns raised by the retailers and the manufacturers.
The queer acronym-like name came after much thinking as Manoj claims, “From consumer perspective, O2Onow means ‘O2O’ i.e. online-to-offline for a consumer to view products online in nearby stores or for that reason, they view stores anywhere and purchase offline and ‘now’ i.e. real-time as customers are able to instantly view the store virtually.”
Interestingly, he adds, “From the seller perspective, O2Onow means ‘O2O’ i.e. offline-to-online for a seller to come online in a few hours to start selling the products and to promote their stores. ‘Now’, in this case, means sellers can be instantly on-boarded using our innovative platform.”
The startup had a modest beginning solely aimed at the good cause they wanted to affect. Started with a personal investment of $25K, the startup went on to receive a Seed funding of $25K from a consortium of angel investors.
O2Onow is focussed on the following:
- Online enablement via mobile and web presence
- Store promotions via ads
- Etailing via delivery within 4 Km radius in remote locations and ecosystem via retailers or dealers to reach out to manufacturers, financiers, insurers in a simplified way
The Shades Of Grey With A Silver Lining
O2Onow is actively targeting to digitise small and medium stores, which is at the epicentre of its mission.
Some of the key features that have attracted users includes the platform’s unique search features which diversify the searches based on location, local stores, category, multi-category, nearby services, searches by brands, store and services ad, offers and deals of the day from local stores, coupons from local stores and government institutions and emergency services.
This range of offers has been developed by O2Onow in view of the challenges one has to go through to discover local stores around the locality.
Despite the offers and the achievements, the startup still has myriad challenges to overcome.
The major challenges are not in terms of just raising funding but, as Manoj elaborates, “Going by our 3P (People, Process, Platform) strategy, we are facing major challenges in hiring people and tuning the platform performance. We have a decent process which is manual and we are looking forward to automating it in the near future.”
Although the shades of grey persist, there are silver linings too. O2Onow was chosen as the local startup by the Department of Industry and Commerce, Govt. of Telangana to provide low-cost solutions for MSMEs. It was also selected by the ‘Scale Minds’ accelerator for its contribution in promoting local businesses.
The list doesn’t end here. O2Onow was also selected by AP innovation Centre after it showcased its business idea on BIGShift (Bigshift-Vizag).
In this arduous journey as an entrepreneur and in attempting to bring O2Onow to the service of his clients and consumers, Manoj says, “Every failure was our learning for improvisation. We had few achievements and those were the success stories. So far, we continue improving and will take us a long way to fulfill our mission in the digitisation of business.”
The journey goes on with much optimism and despite competitors, Manoj is hopeful of fighting for the tough home run.
Manoj states, “None of them is pure O2O as the aforementioned organisations are product oriented and not store oriented. We are the ONLY multi-category and first store online platform for MSMEs.”
O2Onow is now aiming to grow its revenue by at least 200% in the light of new strategy that the team has developed and adopted.
While there are no major competitors in the space of B2B online-to-online and online-to-offline small and medium business enabling platforms, except the Indore-based startup ShopKirana, O2Onow faces competition from major software giants like SAP, Oracle and other order management and retail CRM/ERP software that hold sway over the brands.
The FMCG majors, on the other hand, are seeking to cut down on the turnaround time by providing tablets to the mobile sales team, who visit kirana stores to take the orders, so that they could feed it to the company’s systems in real-time.
O2Onow is striving to develop better services to connect more small and medium scale businesses even in the light of many players in the B2C space like Bigbasket, Zopper, Jiffstore that are already present connecting the kirana stores to the end-customers.
Kirana Store Model: Enticing The World To Explore Further Opportunities In Retail
In 2015, during a presentation, Boston Consulting Group’s Senior Partner and Director Abheek Singhi had said that the kirana store model works well in a complex market like India, where small format stores can easily penetrate the length and the breadth of the vast country.
Then in 2017, a major prediction was made by none other than Adi Godrej, the Chairman of Godrej Group. In an interview with Quartz, Adi had said, “Kirana stores and not ecommerce, will fuel FMCG growth in India.”
Also, in late 2017, retail giant Future Group’s founder and CEO Kishore Biyani had announced to launch Retail 3.0 business model in India soon. “It is a model called Tathaastu. This will help you get anything you want,” said Biyani. Biyani is aiming to create a retail chain that will make its presence in every state of India and to achieve this, he has stated that it is essential to have a retail store within the parameter of every two kilometers.
With an estimated 12 Mn kirana stores currently present in the country, translating to 10 stores per 10,000 families, this number is only going to grow to serve the increasing number of families in India.
No wonder this is a huge opportunity for a startup like O2Onow! As part of the roadmap, O2Onow has new product offerings with which it can really strengthen itself in the market. In a city (Hyderabad) that supports startups favourably as evident from the presence of platforms such as the T-Hub that supports various startups by providing mentorship and access to VCs, the road ahead is definitely enlivening for the entrepreneurs.