Assisted e-Commerce Players To Tap Huge Offline Market

By siliconindia | Friday, 20 November 2015, 11:38 Hrs

In a short span of 18 months iPay has emerged as the most powerful leader in this space with 7,000 retailers in Andhra Pradesh, Telangana and Karnataka, serving about five million customers and offering over 4,000 products and also various services.

"Every second, eight customers walk into our stores and one purchase happens. We acquire a new customer every four seconds," said Krishna, who was associated with an e-commerce company in the US before returning to India to try something different.

"I invested my personal money of $3 million. Today our Gross Merchandise Value (GMV) has touched 120 crore per month," said Krishna, who has set a target of reaching 400 crore to 500 crore GMV.

Krishna explained how iPay is helping create new distribution network for products. "A retailer in Srikakulam (Andhra Pradesh) doesn't come to Hyderabad to pick up Karachi Bakery biscuits nor Karachi Bakery has distribution network in Srikakulam, but we help him get the product there," said Krishna.

The company pays a commission of 2 to 14 percent on the products to retailers, depending on the category of products.

He believes everyone has to take the offline route. Alibaba launched offline commerce last year while Amazon made an announcement recently. Flipkart and Snapdeal are also going offline.

"We are helping customers go online indirectly if not directly. We are there in the last mile," Kiran Gali, founder and chief executive officer of NumberMall, told IANS.

Kiran believes this model offers a huge opportunity to take e-commerce to masses. "There are 14 million small merchants in India who touch every one of us every day. They could be kirana shops, medical stores, fancy, stationery or pan shops."

"E-commerce is only for the top pyramid. Only 50 million people in India buy online. Even in an advanced country like the US it is hardly 20 percent," he said.

What is hindering e-commerce penetration is the difficulty in reaching pin codes in small towns and villages and with their network, players like ipay and NumberMall can reach the unreached.

Started in 2011, NumberMall is a pioneer in the space with its technology platform. Today it has 16,000 small merchants on its platform in 10 districts. What sets it apart from others is that a merchant doesn't have to buy its software. The free app can be used from mobile, laptop or PC for transactions.

NumberMall is offering eight services, but recharges account for 40 to 45 percent of the transactions. With GMV of 15 crore a month, it plans to bring a wide range of products on its platform within a month.

Bootstrapped by Kiran, the company raised $1 million and plans to raise $10 million more this financial year to fund its expansion.

Source: IANS