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Bengaluru-based retail technology startup <keyword id="3215798" type="UNKNOWN" weightage="20" keywordseo="SnapBizz">SnapBizz</keyword> on Sunday said it has raised an undisclosed round of funding from veteran industrialist <keyword id="6360722" type="PERSON" weightage="20" keywordseo="ratan-tata">Ratan Tata</keyword>. This is Tata's seventh investment in startups in 2016 so far. Tata, former <keyword id="6355725" type="CITY" weightage="20" keywordseo="Tata-Group">Tata Group</keyword> chairman, has invested over 20 startups so far. In January 2016, SnapBizz had announced a Series A funding of $7.2 million led by <keyword id="969909" type="ORGANIZATION" weightage="20" keywordseo="Jungle-Ventures">Jungle Ventures</keyword>, <keyword id="3215959" type="UNKNOWN" weightage="20" keywordseo="Taurus-Value-Creation">Taurus Value creation</keyword>, Konly Venture and Blume Ventures. 

	With the mission of transforming the unorganised fragmented retail sector in the country, SnapBizz currently works with over a thousand kirana stores across Mumbai, Pune, Delhi, Hyderabad, Chennai and Bangalore and aims to expand its footprint across other tier 1 and 2 cities.
 

	"A visionary of Mr.Tata's stature showing confidence in SnapBizz is is certainly a big boost for our business idea and will continue to accelerate the digital revolution in India's kirana stores. Brands are also seeing this as an opportunity to partner with us in order to be a well wisher of the retailers," SnapBizz Founder and Chief Executive Officer Prem Kumar said in a statement.
 SnapBizz solutions enable smart store management and a digital connection to consumers, <keyword id="34523" type="CITY" weightage="20" keywordseo="fmcg">FMCG</keyword> companies and distributors. SnapBizz was founded in 2013.

Ratan Tata invests in SnapBizz, 7th investment in a startup in 2016 so far

<ul><li><keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword> has acquired <keyword id="80487" type="COMPANY" weightage="20" keywordseo="walmart">Walmart</keyword> India’s business and has announced the launch of Flipkart Wholesale.</li><li>Walmart’s Best Price cash-and-carry business will now come under Flipkart.</li><li>Best Price currently has over 1.5 million members including <keyword id="6513856" type="UNKNOWN" weightage="20" keywordseo="kirana-stores">kirana stores</keyword> and MSMEs. </li></ul>Flipkart has acquired Walmart India’s business and announced the launch of Flipkart Wholesale. With this, the 28 Walmart’s Best Price stores in India will now come under Flipkart. Best Price currently has over 1.5 million members including kirana stores and MSMEs. With the acquisition of Walmart India business, Flipkart hopes to transform the kirana retail ecosystem in India with technology. While Flipkart has been working with kirana store owners since 2019 by bringing them on its platform, it is now entering the business-to-business e-commerce in the kirana stores segment – one that JioMart, Amazon are all betting on as the next big leg of Indian e-retail. Flipkart is going to begin the operations of Flipkart Wholesale in August, with grocery, fashion and general merchandise. Kirana stores regained their popularity during the coronavirus lockdown, as consumers rushed to the nearest grocery store to stock up. Four months later, consumer spending at kirana stores are still 22% higher than pre-Covid levels. “They have been winning the loyalty of the current consumers and acquiring new ones,” said Prem Kumar, Founder &amp; CEO of Snapbizz. “With the launch of Flipkart Wholesale, we will now extend our capabilities across technology, logistics and finance to small businesses across the country. The acquisition of Walmart India adds a strong talent pool with deep expertise in the wholesale business that will strengthen our position to address the needs of kiranas and MSMEs uniquely,” said Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group. Walmart had recently invested $1.2 billion in Flipkart in an equity round, two years after it bought a 77% stake in the Indian retail giant for $16 billion. The round valued Flipkart at $24.9 billion. Flipkart had recently surpassed the mark of 1.5 billion visits per month and reported 45% growth in monthly active customers and 30% growth in transactions per customer for FY20 “For over a decade, we’ve been committed to India’s prosperity by serving kiranas and MSMEs, supporting smallholder farmers and building global sourcing and technology hubs throughout the country. Today marks the next big step as Walmart India’s pioneering cash-and-carry legacy meets Flipkart’s culture of innovation in the launch of Flipkart Wholesale,” said Judith McKenna, President and Chief Executive Officer, Walmart International in a statement. The Walmart India team will now come under Flipkart and Flipkart Wholesale will be headed by Adarsh Menon, a veteran at the e-commerce company. McKenna said that with this new move, the combined team will break “new ground in their shared mission to help Indian businesses grow and succeed”. SEE ALSO: <a href="https://www.businessinsider.in/business/ecommerce/news/google-latest-offering-shoploop-is-similar-to-what-walmart-owned-flipkart-launched-a-week-ago/articleshow/77013646.cms">Google's latest offering Shoploop is similar to what Walmart-owned Flipkart launched a week ago</a> <a href="https://www.businessinsider.in/business/ecommerce/news/walmart-powers-flipkart-with-more-capital-to-battle-google-facebook-and-amazon/articleshow/76960607.cms">Walmart powers Flipkart with an additional $1.2 billion⁠ to help e-tailer battle Google, Facebook, and Amazon</a>

Flipkart buys Walmart’s India business - 'kirana stores' network to bolster e-retail play

The metro cities enjoy the luxury of sitting at home and buying things online. While most of the online sellers claim to reach all customers across the country, there is certainly a big gap that keeps people from smaller towns aloof from the trend. The result is a major loss for online sellers who lose out on the customers who prefer buying from physical stores. Last financial year, Ken <keyword id="15509" type="ORGANIZATION" weightage="20" keywordseo="Research">Research</keyword> has reported, only eight metro cities have generated major sale online besides 3,133 Tier II and Tier III cities including 1,233 rural hubs. This is a clear indication of the potential that smaller towns posses when it comes to online sales. But then there is something that is keeping these places remote from the major sellers. Bengaluru based tech start up <keyword id="3510995" type="UNKNOWN" weightage="20" keywordseo="ShopX">SHOPX</keyword> intends to shift this ecommerce dominance from just a small percentage to the overall retail pie, the Indian mass market. The basic aim of SHOPX is to enable every town in India to shop online. In an exclusive chat with Business Insider Amit Sharma, CEO and Co-Founder of ShopX, said how the market dynamics in smaller towns work. What made them come up with the idea? Research indicates that the middle-income mass market in India is not comfortable speaking in English and majority of them are not comfortable shopping online. The general population of Tier-2 and Tier-3 towns, will consider the suggestions of their kirana store owner before making a purchase. Trust and comfort are two factors that affect buying decisions. Technology and the ‘human touch’ becomes a solution to this problem- small retailer can become the point of contact not just for purchase but also for delivery of products. Since its inception in 2015, SHOPX has grown in reach, distribution, and engagement with retailers across 10 states and 220+ towns in Tier 1, 2, and 3 cities across India. Over the years, SHOPX has grown with 45,000+ retailers across <keyword id="6364822" type="ENTERTAINMENT" weightage="20" keywordseo="South">South</keyword> and West India. Due to the increasing demand of premium brands in Tier-2 and Tier-3 towns, SHOPX has consolidated a wide range of products in various categories, such as <keyword id="34523" type="CITY" weightage="20" keywordseo="fmcg">FMCG</keyword>, mobile phones and accessories. One such example is the launch of <keyword id="6354606" type="COMPANY" weightage="20" keywordseo="iPhone">iPhone</keyword>s on the technology platform in January 2017. They sold more than 300 units of iPhones, out of which 70 percent of the shipment is iPhone 5s. SHOPX is backed by strategic investor, <keyword id="44604" type="PERSON" weightage="20" keywordseo="Nandan-Nilekani">Nandan Nilekani</keyword> and mentors including Jagdish Kini [ex- CEO, <keyword id="15491" type="COMPANY" weightage="20" keywordseo="Airtel">Airtel</keyword> (<keyword id="2465548" type="UNKNOWN" weightage="20" keywordseo="South-Region">South Region</keyword>), Managing Director, Gillette India], and Pramod Varma [former Chief Architect, UIDAI Aadhar Project, CTO Sterling Commerce.] <div type="image" title="uoVLSxCa" msid="58577154" hostid="261"></div>
 Uniqueness The SHOPX app is disrupting the traditional retail ecosystem with a differential approach. It enables the retailer to offer a better experience to their consumers. The benefits for the retailer are low investment, zero stocking, and increase in income opportunities. SHOPX enables retailers to earn 30-40 percent more than the traditional retail model. SHOPX offers various digital services like mobile and DTH recharge, bus and flight booking, utility bill payments, SHOPX Suvidha (lending service only for SHOPX distributors) along with a wide range (more than 50,000) of physical products in categories like FMCG, mobile phone and accessories, fashion etc. Localise Last Mile Delivery We have launched last mile delivery (the last leg of the logistics cycle where parcels are delivered to the end customers) to address the challenges of scaling up logistics and supply chain. Instead of relying on national logistics providers (who tend to be expensive and often slow in last mile), ShopX does its last mile delivery through its local partners. This allows faster speed, lower cost, and more reliable delivery. While there is a stiff competition from market players like Just Buy Live, StoreKing, SnapBizz and Amazon Udaan Sharma is quite confident of the game. Availability 
 Consumers can access the SHOPX app at 45,000 retail outlets who have partnered with us. More than 50,000 products are available on the SHOPX platform along with various digital services like mobile and DTH recharge, and travel ticket booking. We have easy order and return policies to provide consumers and retailers a hassle-free shopping experience.

This startup is enabling online shopping in small towns just like in the metros

Believe it or not, <keyword id="1640900" type="UNKNOWN" weightage="20" keywordseo="Online-grocery">online grocery</keyword> shopping is a fad. In a country where department stores are still booming and people working with <a href="http://www.businessinsider.in/government-defines-the-word-start-up/articleshow/51089062.cms">MNC</a>s considering grocery shopping as their dose of weekend fun, online grocery isn’t something that Indians are really very serious about, unlike cab aggregators and movie ticket booking apps. 
 
Indians are jugaad-friendly. In a market crowded with <a href="http://www.businessinsider.in/government-defines-the-word-start-up/articleshow/51089062.cms">online grocery apps</a>, people tend to download apps, get their first order at maximum discount by using coupons and then simply uninstall the app from the device. They would install other apps for their next use. Unlike cab aggregation, app based grocery shopping is never a necessity to <a href="http://www.businessinsider.in/government-defines-the-word-start-up/articleshow/51089062.cms">urban Indians</a>. In each lane and bylane of any Indian city and suburb there is a grocery store selling the basic needs of bread, rice, pulses, milk and eggs. 
 
The online boom of grocery shopping started in the US some 15 years back and faded out by early 2000. One of the giants in the market Webvan that started in San Francisco met the same fate as their expenses got out of limit. 
 In last few months, there have been numerous deaths of online grocery providers. <keyword id="2809732" type="UNKNOWN" weightage="20" keywordseo="PepperTap">Peppertap</keyword> that raised USD 51 Million shut down after one and a half year of operation citing similar reason. 
 
Prem Kumar, Founder and CEO, SnapBizz has a point to make. “The consumer behaviour in the grocery online space is fairly different from other consumer goods spaces. The driving forces are merchandise and convenience, while the pillars are technology, merchandise and fulfilment.” 
 
“Since the grocery industry runs on a tight value chain, establishing unit metrics and profitability becomes a challenge,” Kumar said. 
There are two basic models in online grocery- a full service model and hyper local model. Full service models are the ones where they control the end to end value chain and deliver a good customer experience. The hyper local model depends on getting goods from local retailer and delivering it. The unit metrics does not stack up in this model. 
 
“The retailer has to pay 5 to 6%, when he hardly makes 8 to 10 % margin. In spite of doing this, the online grocers do not deliver the same customer experience as delivered by the retailer. Hence, the business model may look attractive in the beginning, but unable to sustain and fold,” Kumar added. 
 
We analyse what could have gone wrong with the online grocery start ups and here are the probable reasons. 
 
Marketing siphons a lot of money <keyword id="2057213" type="UNKNOWN" weightage="20" keywordseo="Big-Basket">Big Basket</keyword> has <a href="http://www.businessinsider.in/government-defines-the-word-start-up/articleshow/51089062.cms">Shah Rukh Khan</a> as the brand ambassador. Then other online grocery brands like <keyword id="2466939" type="UNKNOWN" weightage="20" keywordseo="Grofers">Grofers</keyword> and ZopNow invest heavily on marketing, right from digital advertisements to billboards. This is again a hug expense. Firstly marginal profit and then monstrous expenses take a toll on the profit. 
 
Many retailers walk with the cherry of the cake 
Well, if Grofers or Big Basket is giving some benefit to the end consumers, often the small retailers start ordering milk, bread and cold drinks as these are the products where they make nominal profit. So as a result, the retailers re-re-selling the products. 
 
Marginal profits 
It’s a known fact in India that groceries aren’t profitable like gadgets. Selling 5 kg of sugar may give the retailer Rs 100 profit. It’s that tough. And then delivering the product at doorstep would result in more expenses. Before shutting down Peppertap, CEO Navneet Singh admitted that they were operating in negative margins per delivery, confirms a report by business website. 
 
Users look for better offers 
Many users tend to buy through apps only when they get <a href="http://www.businessinsider.in/government-defines-the-word-start-up/articleshow/51089062.cms">discounts</a>. This isn’t something that the buyers are to be blamed for. Indian market has always been price sensitive and this ought to happen. 
 
Price sensitivity 
Indian consumers are quite money minded and sensitive to prices. It’s not they are misers but they love savings, When you buy at department stores you get to scrutinize various brands, quality and of course the prices. But online grocers don’t give the user the luxury to select. 
 
Inventory mismanagement 
 
 
While Big Basket is spending a lot in inventory and Grofers is letting you choose stores. Having an inventory is always the best option provided you have that much cash in hand. What happens when a customer refuses orders? Sellers aren’t taking it back. If you have an inventory and if the item isn’t perishable, you can still keep it in stock for next order. 
 
Last mile glitch 
The <a href="http://www.businessinsider.in/government-defines-the-word-start-up/articleshow/51089062.cms">warehouse</a> is super responsive and the pick up is superfast, but then the delivery guys slip and the whole smoothness are hampered. Generally the delivery guys get Rs 300 per day for working from 9 in the morning till 10 at night. No work results in no pay. You don’t really expect a 10 inch wide smile at 9PM carrying your 10 Kg of monthly grocery item. 
 
Moreover unlike Gurgaon, Greater Noida where the real estate boom has given rise to skyscrapers, it’s not everywhere in India where an address is easy to locate and deliver. Naturally the delivery get delayed. 
 
Arsh Singh, COO at Tookan suggests that routing optimization, real-time tracking, keeping customer notified make the grocery delivery management a lot better.

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Ratan Tata invests in SnapBizz, 7th investment in a startup in 2016 so far

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This startup is enabling online shopping in small towns just like in the metros

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The truth behind why online grocery start ups are failing

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