[Note: This article is part of The Junction Series. We will be covering the EnterpriseTech sector in detail at\u00a0The Junction 2017\u00a0in\u00a0Jaipur. Learn more about\u00a0The Junction here!]\r\n\r\nMom and pop, local kirana stores are the first thing to be found on any Indian street, along with a chemist for the most part. The smell of wheat, rice, and pulses mixed together, the place one nips into to buy a packet of Oreos or break a 500 buck note by buying the cheapest bar of chocolate, calling the shop owner Uncle and Aunty \u2013 every 80s-90s kid has grown up with these experiences.\r\n\r\nAnd the strangest, most fascinating thing about these stores is the way the inventory is stacked \u2013 Maggi noodles packets jostling with Kissan fruit jam and chips packets. The different varieties of bread laid out on a neat table and the different bottles behind the counter that could contain anything \u2013 from dry fruits to spices to condiments.\r\n\r\nAnd yet, unerringly when the customer walks into the store to ask for half a kilo of jaggery, that is exactly what he\u2019ll get, within two minutes or less. Even if the small space is crowded early in the mornings or late in the evenings, the store persons can still somehow locate every single item required by every single customer, every single time.\r\n\r\nThe way they keep it all straight in their head is a marvel.\r\n\r\nBut, what about stocking this inventory? Many a time, when a store owner is juggling to maintain books, recalcitrant customers, and persistent vendors who keep coming back for re-orders, they can keep track of the fast-moving stock, the staples that everyone buys. But what about ALL of the inventory that is kept in a single, small local grocery story?\r\n\u201cDid you know that 80% of all items in the grocery category is routed through mom and pop stores, About 10 Mn of them?\u201d asks Sachin Chhabra, co-founder of enterprise retail solutions platform for local grocery stores, Peel-Works - a Mumbai-based company that is working to connect local grocery stores with brands via technology that can manage sales force beyond distributors through SaaS and big data analytics.\r\nThe Problem: Stock Versus Inventory\r\nHe then goes on to explain the problem of stock versus inventory that is happening pan India in almost all of these stores and ends with, \u201cThis is the reason why most of these businesses are inefficient in their processes. And, if you think about it, this inefficiency gets passed up and down the value chain \u2013 right from where the wholesaler sends the stock to the retailer who sends it to the local store owner who sells it to the customer and the whole process is repeated without anyone understanding the sheer wastage taking place with regards to not-so-fast moving stock. Or indeed ALL the stock.\u201d\r\n\r\n\r\n\r\nThis problem is glocal, to say the least, and with approximately 10 Mn small business and stores up for grabs, Peel-Works has its hands full trying to automate the supply-chain management processes of these businesses.\r\n\u201cThe Grocery Market Is Highly Fragmented And Automation Free\u201d\r\nExpanding further on the existing market, Sachin says, \u201cThe grocery market in India is one of the oldest enterprise sectors, supported largely by small businesses. But this market is definitely fragmented and, for the most part, automation. By fragmented, I mean, there is no one universal system, no one-size-fits-all to the way things are done. There is no clear way to know what works in one shop, one area, one city could have a chance of working in another. Business just goes on the way it always has.\u201d\r\n\r\nAnd then there is automation. Rather, the lack of it.\r\n\u201cNone of the local stores are online in any capacity \u2013 not with PoS systems, they don\u2019t have options to pay by credit card\/debit card,\u201d says Sachin. \u201cAnd not with inventory, the bread-and-butter (literally) of the business,\u201d he adds.\r\nPeel-Works aims to bridge this gap between retailers, their inventories and tech in order to create efficient business processes that will eventually lead to profits for their clients. This idea, though not entirely novel, could only have been birthed in Digital India which has embraced tech adoption wholeheartedly.\r\n\r\n\u201cThe idea is to turn the business cost-efficient at the grassroots level. And doing this with one or two businesses won\u2019t suffice, it has to happen on a large scale among all grocery retailers all over,\u201d says Sachin enthusiastically.\r\n\r\nHe brings up Grofers and BigBasket, who are, actually solving two problems facing the average Indian grocery consumer.\r\n\r\n\u201cWith Grofers, the problem of convenience-buying gets solved,\u201d he says. \u201cYou\u2019re feeling lazy on a Sunday morning. You find shopping for groceries a chore and voila! There is an app that can help you to click-n-buy anything you want within minutes. But bear in mind that Grofers is just an aggregator of local stores and not a direct retailer itself,\u201d he adds.\r\n\r\nBigBasket, on the other hand, is a retailer in and of itself. It carries inventory in its dark stores and warehouses from where the produce\u00a0and other items are shipped off to the customers and delivered on time. BigBasket solves the problem of convenience and takes it a step further by eliminating the middleman \u2013 the retailer by becoming the retailer themselves.\r\n\r\nWhile these two businesses, among many, have come up with a tech-first solution and thus deploying it makes it easy, the notion of using tech from the grassroots level is something that still needs to be explained, over and over again to the businesses.\r\n\u201cEvery store typically stacks about 4K-5K items of inventory. The first thing we do is digitise this entirely,\u201d says Sachin. \u201cThe next thing is to sort the inventory into different categories \u2013 fast-moving, staple, every day requirement etc. Then, based on the analysis we can help the business figure out why certain items are moving fast, others aren\u2019t, where they are overstocking and where they need to be more vigilant."\r\nHe adds, "In essence, we automate the process and analyse it in real-time to give the business an overall view of what is happening in terms of stock at all times, which helps them run their day-to-day operations more efficiently."\r\nOn-boarding Kirana Stores One Store At A Time\r\nPeel-Works was founded in September 2010 in the cities of Delhi and Jaipur by Sachin and Nidhi Ramachandran who also runs 1SF \u2013 the first product launched by the startup. Sunil Natraj handles product and engineering while Ashu is in charge of keeping track of the stores coming onto the platform.\r\n\r\n\r\n\r\n1SF is the inventory-taker product that helps to organise stocks, analyse it according to usage\/movement and then makes recommendations based on the analysis via a simple system \u2013 Into the Store.\r\n\r\nThe 100-odd team is based out of Mumbai, while the product team sits in Pune. One of the basic functions and, indeed, a challenge that the startup faces is to explain the value proposition of the product to stores and help them enroll on the Peel-Works platform \u2013 Ashu and Nidhi work together on this front to ensure the platform is running smoothly and that it is ready to scale.\r\nSo far, it claims to have on-boarded 2,000+ stores online to the 1SF system from Delhi, Mumbai, Pune, Chennai, Kolkata, Jaipur, Bengaluru, and Hyderabad. Its most recent launch was in Mumbai in August 2016.\r\n\u201cYou\u2019d think people would immediately get the intrinsic value of what we are doing by automating a very large part of the value-chain in the largest market in India,\u201d says Sachin. \u201cBut we have met with a lot of resistance, even though we are a B2B business.\u201d\r\nMonetisation, Funding, Competition\r\nOnce the onboarding has been completed on the store level, it moves to the next platform \u2013 Into The Basket. As the term suggests, the thinking behind this move is to increase sale of the product and the platform itself so that it appears in more and more baskets, thereby achieving scale.\r\n\r\n\u201cIt is all about marketing at this level,\u201d says Sachin. \u201cWe have to do a lot of activities to penetrate the market and create a kind of disruption in order to scale at the pace which we see ourselves going.\u201d\r\n\r\nThe startup does not charge the participants at the In The Store level, i.e. the kirana stores who will use the actual technology. Instead, once the automation moves up the value chain, it has customers from \u201cFortune 500 companies\u201d which utilise the platform to move their inventory into more and more stores, and thus, increase their profit margins too.\r\n\r\nThis works on a SaaS model and is a subscription service where the customers are charged on a per player\/per month basis.\r\n\r\nThe company boasts of clients such as HUL, Airtel, Tata Sky, Reckitt Benckiser, Bunger and Glaxo Smith Kline \u2013 across the spectrum of FMCG, pharma, and entertainment.\r\n\r\nIt also raised Seed funding from IAN of about $1 Mn according to Sachin and IDG Ventures and Inventus Capital\u00a0have invested $2 Mn in the company. \u201cWe are not hurting for cash at the moment, but we are always looking to build our presence in the market in order to get \u201cIn The Basket\u201d up and running and for that the money comes in handy.\u201d\r\n\r\nPeel-Works counts Stockin, ShopKirana and others of its ilk as competitors. And Sachin is interested in making the market more digital than in the way other businesses are operating in the space. He says, \u201cWe compete with players in the value chain, with non-digital\/services approach. If the approach of these multiple players, interacting with the grocery channel, got a little more digital than it is today, a massive opportunity presents itself to us.\u201d\r\nWhen asked about growth metrics of the company, he is cagey about revealing actual numbers as the company is too young to start with. \u201cWe have onboarded close to 2,000 stores since starting up. There is still a long, long way to go. But I will say this,\u201d he shares. \u201cBased on what I hear from the VCs, our current growth percent is the top quartile on growth, in the segment we operate in.\u201d\r\nAs an answer it is cryptic, but considering the company\u2019s future plans of \u201clooking to acquire the top segment on mom and pop stores across the top 20 cities in India, as it\u2019s the discovery of digitisation that makes us formidable and a force to reckon with\u201d - it\u2019s fair to think that Peel-Works\u2019 has its work cut out to get to the top.\r\nEditor\u2019s Note\r\nTech is changing the way industries and verticals talk to each other - conduct business as well as easing up in order to create more efficient, cost-saving processes. As per a Boston Consulting Group and Retailers Association of India (RAI) report, titled \u2018Retail 2020: Retrospect, Reinvent, Rewrite\u2019, the retail market is expected to nearly double in five years, touching $1 Tn by 2020 from $600 Bn as of today. The grocery industry has several players such as BigBasket, Grofers, Zopper catering to the end goal needs of the consumer - these startups work very well in the hyperlocal delivery space they have captured for themselves.\r\n\r\nAnd when it comes to solving the deeper issue of supply chain and inventory-taking along with salesforce management it is platforms like Peel-Works\u2019 1SF that has a slight edge in onboarding the little store around the corner and adapting to tech, one step at a time. Whether this business model will work long-term and have the desired impact that the startup aims to have on the fragmented grocery industry remains to be.