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FMCG: App based distribution for kirana stores through new age distributors
Posted On: 29-02-2016 05:32:19 AM

As per an article in Business Standard:

It was during the 2014 Diwali that most e-commerce players in India unleashed a torrent of discounts and promotions for consumers, enticing buyers away from traditional retail, towards e-tail. Brick-and-mortar retailers could only watch.

That's when Sahil Sani, a Boston College graduate into distribution of entertainment electronics products in India for 16 years, and Bharat Balachandran, an aggregator of loan products, had the epiphany that the pricing models relevant for many decades were getting replaced with instant price discovery.

"It was technology, not the unnatural discounts that were the primary driver for this shift in consumer preference. We asked ourselves how we can use this same technology to give power back to the aam dukandaar (neighborhood kirana stores)? This led to the Just Buy Live system," Sani, co-founder, chief executive officer (CEO) and chairman, explains as the reason for starting Just Buy Live. A platform that provides traditional retailers and institutional buyers unfettered access to consumer brands.

The concept: a mobile app-only service available on the Android and iOS platforms, that was incepted in November 2015 and went live in January 2016. It operates like any other distributor. It takes goods from the manufacturers, or their warehouses, and transports these to the retailer's doorstep through 3PL (third-party logistics) partners. Claiming the platform to be the world's first multi-category distributor, co-founder and managing director Balachandran says unlike conventional distributors, they stock products from competing companies like Pepsi, Coke, Hindustan Unilever and ITC.

The platform provides an added advantage to retailers, too. "We have a structured and unsecured credit offering -Udhaar by Just Pay - which is powered by financial services firm Religare. In essence, we will be providing Udhaar (credit) upwards of Rs 2 lakh to retailers to use the app, sans any collateral or unnecessary paperwork," he adds. In India, an estimated 98 per cent of retailers have not borrowed a single rupee from a bank or lending institution. Therefore, we have deprived them of the fundamental freedom to trade. Credit by Just Pay is a service that addresses the problem of fund scarcity, according to him.

Under the Udhaar, a retailer can avail a 30-day interest-free credit, which frees the working capital of the retailer and allows him to repay the amount later. The firm aims to provide Rs 1,000 crore in credit by the end of 2016.

The firm operates across 15 cities in 10 states and aims to expand to 500 cities and towns by the end of 2016-17. The firm has 25,000 registered retailers on its platform. From 1,000 brands and 300,000 products in January 2016, it aims to have 10,000 brands and one million products by the end of this calendar year. They expect to be operational for 10 million retailers, of which they expect 10% to buy twice a month, at an average buy box of $250.

It raised $20 million in December 2015, in a Series-A funding from Mumbai-based private equity investment management firm Alpha Capital Advisors, for growth and expansion.


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