Anushruti Singh
Mom-and-Pop retail stores of India are usually legacy businesses. The small retail counters constitute 80 per cent of the country’s retail sector. It roughly implies that more than 15 million shops are part of it. Although the coronavirus outbreak has bruised this segment a little, but these stores have earned livelihood for millions of home during the lockdown.
Undoubtedly, with suspension of non-essential e-commerce functions these small retailers have gained more relevance. On the other hand, this change has spurred a new wave of digital transformation among such stores.
Retailers Transforming into E-Commerce Entities
According to Statista, E-commerce retail sales accounted for 5 per cent of total retail sales in India. The balance still appears to be shifting as consumers now prefer to stay home. A market research by Nielsen reveals that the share of e-commerce sales in fast moving consumer goods (FMCG) grew to 2.8 per cent of the overall sales during the lockdown period. Earlier, 85 per cent of FMCG retail sales came through traditional bricks-and-mortar stores.
However, this little surge in the FMCG segment cannot compensate for the losses of retailers. But, the apparent change in consumer behaviour determines that even the small retailers would require adoption of technological measures to survive in the new normal. Thanks to the new age retail-tech startups, the small retailers are now rapidly embracing the digital transformation and are becoming independent e-commerce entities.
The technology solutions backed by omni-channel strategy and online commerce are powering millions of Kirana stores. Further, local mom-and-pop shops, small merchants, cycle-riding delivery men, distributors on scooters, and farmers are also becoming a part of this bandwagon.
These startups are addressing several short-term challenges such as inventories and supply-chain management, delivery lists, and more. With this, these technological solutions have formed a new trajectory of growth for small retailers. In exchange, fast-tech adoption framework has opened a vast pool of opportunities for tech startups.
Retail a Fertile Ground for Startups
The recent figures by government of India state that retail contributes to approximately 40 per cent of India’s consumption and 10 per cent to India’s GDP. According to the experts of retail, there is a shift in consumer behaviour from offline shopping to online platforms. This is because of the reason that people which were earlier skeptical about buying things online are now being compelled to explore products online.
Tech-startups were already aware of immense opportunity in the sector. Hence, they started attracting investors that poured in money for early stage rounds. According to a research done by research platform CB Insights, retail startups are getting investors’ fund globally. North America, Asia, and Europe saw a combined funding of $50 billion in Q1’20.
“Across growing retail sectors, two main investment themes emerged which were namely digital connection and automation. This includes investments in live-streaming content, digital platforms for wholesale groceries, autonomous delivery robots, and tools for real-time data collection and analytics,” states the research.
One such Hyderabad based tech based start-up, ONGO Framework has extended help to MSMEs and retailers. It also provides them an innovative platform that develops custom built applications by the name of ONGO Retail.
“As COVID-19 sweeps the world, robots, masks, ventilators etc have become essentials for people. Similarly, digital enablement is also a new normal for businesses,” says Rama Kuppa, founder & CEO of the startup as we spoke to him on new retail IT solution.
He further tells that more than 30 million small businesses were impacted due to the wrath of COVID-19 pandemic. Also, traditional business methodologies may wax and wane according to ever-changing economic circumstances. However, the impact of this crisis is primarily dominated by challenges posed for many businesses.
“These businesses were driving the core of the Indian economy and now they need our support. At this time, ONGO and similar IT solutions are trying to reach enterprises to bring back their business back to the new normal from an unprecedented disruption,” he proclaims.
IT solutions Making Small Retailers Self-sufficient
There is a massive spike in demand for household essentials and groceries due to the outbreak of COVID -19. It is compelling retailers and consumers to opt for an unprecedented disruption and hence resolving multiple short-term challenges.
ONGO retail is one such solution which develops custom-built application for local bazaars supermarkets. This assures inculcation of best practices of retail and marketing along with providing end-to-end IT solutions. The solution also provides complete customisation to meet specific business goals of a store.
In a nutshell, this innovation can turn your neighbourhood Kiranawala to an owner of a digital app in just 10 minutes. While they scale up its business operations and through these applications customers can experience a touchless shopping at comfort of their homes.
Rama Kuppa, Founder and CEO opines, “Our firm was pitching in to make the best use of technology and hence came out with an innovation to digitally equip a firm in less than 10 minutes. As a low or no code framework, we would accelerate the digital economy by empowering, enabling, and enriching the businesses digitally.”
Through retail.ongochat.com, small and medium sized retailers can chat with bots or an agent and get themselves enabled for going live within 10 minutes. In addition to this, the combined power of technology, faster delivery, and being local enriches overall customer experience.
Our country is now opening in a phased manner, but the lockdown has tremendously changed the shopping patterns of consumers. It has now shifted to local stores. This trend is providing a boost to IT enabled operations among small stores to become more profitable.
“ONGO Retail is an excellent choice for retailers who are seeking to gain continuous growth in a highly competitive market. We offer innovative new solutions to transact and manage customers in neighborhood digitally. It will empower business with world-class mobile/web technology to receive and manage orders, schedule/real-time delivery, loyalty, wallets, store management, etc”, adds the founder.
Homegrown Tech is Enabling Digital Transformation
As digital transformation mapping trends tell us, the large-sized companies are more prone to change their IT infrastructure according to changes in the customer needs. However, small businesses are reluctant when comes to digital transformation.
A survey done in late 2019 by GoDaddy, a website platform provider, delves into the major roadblocks faced by SMB owners to adapt themselves with technology. According to the survey, 42 per cent of the Indian small businesses surveyed cited their inability to invest sufficiently for a technological upgrade since growth of the business was a major challenge. Other external challenges included societal turbulence (35 per cent), and failure to keep up with the technological advancements (23 per cent).
21 per cent of Indian entrepreneurs cited cyber-attack as a primary concern. 31 per cent of them responded by saying that they lost access to their accounts. 28 per cent said that it costs them money to get it fixed and 23 per cent mentioned that it compromised client information.
Even with these challenges, small business owners are optimistic to use a digital platform for their businesses now and reaching to a suitable solution provider. According to Kuppa, ONGO retail is facilitating MSMEs with the digital change that they need today. He adds, “They are looking for technology providers who can serve with negligible capital expenditure on it.”
The solution can design a digital strategy for businesses that includes a retailer talking to a bot or an agent and developing its own store app and website. It also includes omni-channel retail, stock management services, billing system, supply management, easy-ordering system and organising delivery.
Retailers can even perform functions such as GST compliant operations and accounting through this single platform. “Building technology is never a challenge for ONGO but understanding the market need during this pandemic is a brainstorming thing. At the core of the ONGO framework is our commitment to provide an all-round digital transformation to businesses and build premier digital society,” he tells.
Demand Surge for Tech Solutions Among Small Firms
ONGO Retail is getting a huge response from the retailer community as the start-up claims. Till date, more than 500 enterprises have seeked solutions for their firms. Adding to this, Kuppa says, “We received a massive number of requests in the last month of activity. More than 500 enterprises are requesting us to provide technology solutions.”
Most of the potential customers of the firm come from the segment of grocery, electronics, clothing, accessory, clinic, and distribution vendors. It also includes farmers which are also approaching ONGO for building a digital solution for distributing their products. “At the time of launching, we received responses from tier 1 cities. As the things are progressing, tier 2 and tier 3 businesses are equally looking for digital transformation and are approaching us,”
Further elaborating on the solution, Kuppa informs us that the solution is purely homegrown. However, to provide a wide range of services ONGO framework has opted for other tech partnerships. “We have collaborated with payment gateway companies and cloud companies to provide the entire solution as a retail cloud for MSMEs and enterprises for which we will provide shared and private hosting respectively,” he explains.
Currently, ONGO Retail is following word of mouth strategy for marketing. The goal is to build an empowered digital business and society. “We are following create and sell models so that they don’t have to spend much time in experiencing the technology. Our dedicated technical team works with them to create and deliver. We have a technical support team, customer service support team, content support team who will be active round the clock to respond,” he claims.
Going ahead, the roadmap for ONGO is to make the digital solutions a new normal for businesses and consumers. “In the fight against corona, we are committed to making digital a new normal for every business. We will extend our solutions to health care providers, restaurants, food chains, service providers, teachers, educational institutes, and many other sectors,” Kuppa says concluding the conversation.
