Store king

Founded by serial techpreneurs in 2012, StoreKing is a technology-driven platform

focused on identifying & fulfilling the demands of the rural market – a large, fast growing &
under-served segment in India. Yes, they are talking about 850 million aspirational
consumers, with an annual retail spend in excess of $370 Bn!

StoreKing leverages the existing retailer network of trusted neighborhood stores in

under-penetrated semi-urban and rural areas, turning them into digital touchpoints to
effectively address the challenges of serving this market, in the process boosting rural
entrepreneurship. Through their innovative offline-online business model, they are solving
the pain points of linguistic barriers, logistics and payments, and enabling multiple brands to
extend their reach to rural India.

They have a data driven approach to providing a variety of Physical Products

(electronics, FMCG, fashion, etc.), Digital Services (content, recharges, etc.) and Financial
Inclusion products (lending, insurance, Gold SIPs, money transfer, payments, etc.), based on
the unique needs of the rural populace. Their network currently consists of more than 39,000
retailers across 2,600+ towns & 1.2 lakh villages in 10 states in India. They have recently
forayed into the Indonesian market and plan to expand our presence in other Asian countries
as well. Their investors include Luxembourg-based Mangrove Capital Partners & Malaysia-
based Axiata Digital.

A large pie to India’s economy, the FMCG sector in rural and semi-urban India is
estimated to cross $100 billion by 2025. With a growing consumption demand in small towns
and villages, rural consumer markets are expected to grow faster than urban consumer
markets. Despite rural market growth, popular e-commerce firms and payment companies
still cater to a largely urban audience.

The gap that exists between urban and rural India is never more evident than when
looking at how far we have grown as a global economy. While the former has made great
strides towards smart cities and state-of-the art services, pockets of the hinterland have
limited access to even the most basic amenities and products. This is largely because of poor
connectivity, language barriers and lack of a logistics services that go that last mile.
StoreKing, an e-commerce platform aimed squarely at India's 800 million rural residents.
Unlike typical online retailers that deal directly with consumers, StoreKing sells through a
vast network of local mom-and-pop shops - a business model that has attracted the likes of
Amazon.com to forge tie-ups.

Even though there is market opportunity, serving the rural consumers comes with
various challenges. Their consumption patterns are increasingly mirroring that of urban
consumers. Rural consumers span across the spectrum of those who are brand conscious,
experimenters and brand loyalists. A large number of rural purchases are influenced by brand
image, aesthetics and functionality.

As the rural consumers and their environment evolves, these factors will be primary drivers
for fueling growth in rural consumption behaviour.

1. Increasing Penetration of DTH, Content Consumption on Mobile

2. Rising Income Levels & Growing Disposable Incomes
3. Demand Replication due to nuclearization of Families

Every brand wants to connect to rural markets and consumers but are unable to due to the
following factors:

 Broken rural distribution channel: Large format stores do not exist in the
ecosystem and brands’ access to kirana stores is limited.
 Limited product availability: Since distribution is broken, making the latest and
promoted products available to consumers becomes a challenge
 No customized offerings: Due to lack of systems, brands cannot capture consumer
data like preferences and buying patterns, leading to generic offerings.

Reasons for StoreKing to enter in Rural Market

The friendly neighbourhood store owner is the most important touchpoint to access rural
consumers. He faces no linguistic barriers, understands consumers’ needs and is familiar with
their cash-first behaviour. His relationship with consumers goes beyond transactions, as he
also serves as a point for social conversations. StoreKing understands the power of a kirana
owner’s reach and his consumer understanding. We work with kirana store owners and tap
into their market potential.
  Owns physical real estate
 Is the primary source of purchase for about 120-150 households
 Enjoys 300K transactions per month
 Enjoys an established social and commercial relationship with consumers
 Has deep knowledge of consumers’ preferences
 Has a bank account and access to digital payments
 Is a point-of-sale for transactions and drop shipment

Rural India - Retail Ecosystem design

StoreKing Reach
They are the biggest and the only player in the technologically-driven rural distribution
network space. At StoreKing, they are redefining rural commerce, one kirana store at a time.

Supply Chain of StoreKing

They are the only rural retail ecosystem which connects suppliers and financial institutions to
rural consumers. We make previously inaccessible rural consumers connect seamlessly with
brands.

How do they do it? With their technology platform, they empower 6 million+ kirana stores in
rural India to become assisted touchpoints, driving transactions of walk-in consumers. Based
on the below four robust pillars, we are fueling the next level of growth in rural India.

Operation:

 The shopkeepers are provided tablets with a catalogue of mostly discounted products.
Customers come into a shop, choose from the catalogue and pay the merchant.

 The merchant then places the order through StoreKing's app. A few days later, the
products are delivered to the shop, ready for pickup. The retailer receives a
commission for facilitating the purchase.
  System saves StoreKing money on shipping and marketing. The start-up also uses
artificial intelligence and on-the-ground observations from the retailers to predict
buying patterns in specific regions, which helps avoid overstocking.

Challenges:

 Logistics challenges

 Language barriers

 Insufficient infrastructure

 Limited access to smartphones

 high delivery costs

These are all factors that make it difficult to cover the "last mile" to doorsteps.
Though, StoreKing seems capable of sidestepping many of these issues. Language is
one. They have pushed tech to another level because the app that they have given to
the end retailers is available in vernacular languages - Tamil, Telegu, Kannada and
Hindi to ensure retailers can understand

The partnership with Amazon includes 350 to 400 stores, which are little more than shops
with desktop computers and fitting rooms. Customers use the PCs to choose products online.
The orders are shipped to the shops, where they can be tried on and returned if the customer
is not satisfied. StoreKing and Amazon are running hundreds of stores like this one near
Bangalore, where customers can place orders online, try on clothes and return items
.

Even in this arrangement, the parcels do not go directly to the end customer, allowing
Amazon and StoreKing to avoid expensive deliveries. Amazon pays StoreKing a commission
for the leads it generates, and StoreKing gives the store operators a cut of the fee. Joint stores
make 30,000 to 35,000 rupees ($425 to $496) a month, respectable sums for rural India.
StoreKing retail store owners transfer money from their accounts to the wallets of the
customers and take cash in return." The funds can be used anywhere Paytm is accepted not
just the store where they are loaded. StoreKing helps rural retailers secure working capital
from microlenders such as Capital Float and Cash Suvidha. It aims to help around 75,000
merchants obtain 10 billion rupees worth of funding by the year ending this March.
How it works

StoreKing’s main focus is on being the digital touch point for rural India, and to
strengthen the Indian growth story by connecting brands and services to fill rural
consumption demand. With over 47,000 stores across 10 states, enabling retailers to sell more
products and services to the walk-in customers. StoreKing works with all major brands of
FMCG, mobiles, household appliances and also offers services like insurance, domestics
money transfer, investments, etc. They onboard retailers as our franchisees and empower
them with the StoreKing app. So then, the retailer is able to fulfil transactions on behalf of a
customer for products as well as services. Payment is made upfront (prepaid) by the
customer.

The retailer maintains a wallet with StoreKing consistently and on confirmation of the

order and the payment, the product gets delivered to the retailer for the customer. StoreKing
operates a fulfillment centre and handles end–to-end logistics, which includes delivering and
reverse logistics to and from 2,800 odd small towns. This is achieved using unique transport
and logistics model. They also provide sales and after-sales service to the retailer by means of
our feet on the street as well as through call center support.

Funding:

In the beginning he relied on seed money from Luxembourg-based Mangrove Capital

Partners. Malaysia's Axiata Group invested $16 million in the venture in 2016, and the two
backers now own a combined 57% to 58% of StoreKing.

The voice of rural India

StoreKing bridges the gap where the contemporary e-commerce companies miss out. They’ve
even captured data points to analyse customer consumption behavior and rural demand to
predict demand, and in turn help retailers to sell more relevant products to their walk-in
customers. Today, established players like Amazon and Xiaomi are partnering with
StoreKing to achieve engagement with rural customers. This engagement includes building
experience zones for these brands in rural India. While categories like food & FMCG form
more than 60 percent of the current rural consumption basket, the trend is changing rapidly.
With the penetration of DTH increasing in rural areas, a rural consumer watches the same
type of advertisements and is exposed to the same type of brands as their urban counterparts
and their aspirations are rising. Smartphones, televisions and home appliances are the fast
growing categories for this market.
Peeking ahead:

StoreKing’s effort to power the economy and digitise rural regions has led their sales to rise
close to $300 million annually. But their business requires them to constantly innovate and
come up with non-linear models of scaling up operations as they grow their presence across
different geographies. One of the challenges is to educate the customer and retailers about our
new offerings – especially with regards to the new age payments and financial services
solutions. They are solving this by means of technology, using various mediums such as
videos, chat, etc., thereby reducing the dependence.

StoreKing takes pride in introducing new digital products such as UPI payments and mobile
wallets to help customers complete digital payments. It aspires to be India’s largest
distribution platform, reaching out to 70 percent of India’s population and a network of half a
million retailers by 2022. The startup is also on its way to becoming India's largest rural
fintech company, with over INR. 22 crore MSME loans being disbursed to rural retailers
through their partners. StoreKing also aspires to plug the gap of financial services by offering
consumers to transact and invest in insurance, mutual funds and many other products in
coming years.