Shotang - Aims to Organize the Unorganized Retail Distribution Channel in the Mobile Handsets & Accessories Space
India presents a curious case when it comes to retail. At $630 bn in size, India is among the top 10 retail markets in the world. However, this huge market is still largely unorganised with organized retail commanding a rather small market share of 10%. The back end of retail is the actual backbone of the industry and is also the unsung hero, which is neglected and in dire need of structured organization.
In the mobile handset and accessories space, stakeholders of the channel face multiple challenges. From a manufacturer’s perspective, this would include having to build an infrastructure from scratch, lack of market reach and not having access to insights/data on how the product is faring at the retailers. Whilst retailers face their own set of challenges. They don’t get to choose from a wide selection when it comes to stocks, most of them lack the ability to secure credit and they don’t have access to brands directly. Enter Shotang, a startup that is aiming to organize the unorganized retail distribution channel in the mobile handsets and accessories space and transform the way the channel operates. The start-up, which is currently present in seven markets, is deploying technology to fix the back end of retail and create a seamless distribution channel. Shotang offers significant business benefits to all three stakeholders of the supply chain in the mobile handset space: manufacturers, wholesalers and retailers.
In an interaction with BW Disrupt, Anish Basu Roy, Co-Founder & CEO, Shotang shared details about his venture.
Excerpts:
Genesis & Description
The founding team at Shotang comes with over 3 decades of expertise in the retail distribution industry having worked in companies such as Coca-Cola, Nokia, and Britannia. During the course of our professional careers, we worked with traditional retailers across the country and were aware of the inefficiencies that exist in the traditional distribution ecosystem. Processes in the traditional distribution channel are manually intensive, high cost and lead to massive information asymmetry. We always believed that technology could solve all these 3 problems. Hence, we started Shotang with the vision of tech-transforming the traditional distribution channel with an on-cloud platform.
Shotang potentially stands to empower millions of traditional retailers by helping them procure their inventory at better margins and higher operational convenience. We also improve their working capital efficiencies by enabling access to credit from banks/NBFCs and cutting-edge payment solutions such as UPI.
Manufacturers benefit by selling to retailers directly on our platform because of the rapid market access, lower cost of sales & distribution and better access to sales/inventory data.
Here is how it works:
1. The retailer uses the Shotang mobile app to order inventory across all the brands that he resells from his store.
2. The orders are processed by the most price competitive suppliers (wholesalers, distributors and manufacturers) in that city and kept ready for dispatch.
3. Our best-in-class logistics operation using our in-house logistics tool, Falcon, ships these products in a single consignment to the retailer within 24 hours.
4. Payments are collected using our digital payment platforms or utilizing the credit offered by NBFCs on the basis of transactions vintage of the retailer on Shotang.
Special Key Features
Firstly, Shotang is solving deep, complex and massive India-specific problems and not simply replicating something that has been done elsewhere. That in itself is something unique.
Due to our deep subject matter expertise in the retail distribution space, we have been able to build our technology infrastructure and business processes with utmost simplicity for the traditional retailer and supplier. This helps them adopt our platform with tremendous ease and the best user experience.
Partnering with the ecosystem is deeply embedded in our DNA. Hence, we have been able to forge strong partnerships with several brands, digital lenders and payment platforms which make our business highly scalable.
Lastly, we have built a team with a unique cultural DNA with a deep focus on customer experience and commitment. This goes a long way in transforming and hand-holding a massive traditional market and educating users at all stages.
Differentiation Factors
The biggest difference between us all our other competitors is that we are a platform, which helps the brand and retailer transact directly through suppliers who hold inventory in the channel. All our competitors are stock-and-sell marketplaces who hold their own inventory.
We have a deep focus on our warehousing and logistics capabilities, which we believe is a critical component of the retailer’s experience. We offer 24-hour delivery timelines and reverse logistics capabilities which are unique to us.
Also, our technology is another major differentiator. All our retailer and supplier interfaces, our workflows and business rules are designed keeping in mind the way business gets transacted offline. This helps our users migrate easily to our tech platform with minimum dissonance.
Funding Raised & Revenue Model
Shotang raised $5 million from Exfinity Ventures and Unitus Impact in 2015. It had raised $300,000 in a seed round earlier from Bitchemy Ventures .
The revenue model is a transaction based fee model, where there is a fee that is charged for the supplier/manufacturer for every order that is undertaken by them.
Traction Details
Shotang helps more than 15,000 retailers and over 200 suppliers across 7 cities on our robust technology platform by improving operational efficiencies, reducing costs and providing them with wider market access.
Expansion Plans
We are looking at increasing our presence across the top 100 cities. Currently, we operate in the mobile and handset accessories space. In the near future, we want to enable the stakeholders of retail distribution across 4-6 categories.
Market Size & Opportunity
The retail distribution in India is a $630 billion industry and there are about 15 million retailers in India. The problem that Shotang is solving is an India specific problem, which is unique to the B2R space only in this country. There is a huge opportunity in solving the challenges faced by the retailers in the area of last mile logistics, payments and providing access to credit.
We are clearly building a platform for millions of traditional retailers to run their entire business on. In a country where 90% of the retail distribution industry in run by them – the power of such a platform is phenomenal.
