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Sales came to a grinding halt for Srijee Decors, a family-run home textiles and bedding store in Kolkata, during the Covid lockdown period. But the next generation at the over four-decade old store realised that even small businesses like theirs need to get online.
The young bahu in the family, Urvashi Maheshwari, was the prime moving force in taking the store direct to the customer online. There were several pain points, she discovered. Cash management was the biggest, followed by shipping logistics, she says. Ninety per cent of the customers placed COD (cash on delivery).
Enter Shiprocket, the Zomato-Temasek-Lightrock-backed logistics technology player. “I started with 10 orders a month online but today we are doing 8,000 orders a month,” says Maheshwari, as the pain points got addressed with tools from Shiprocket. During the journey of moving online, she discovered that there had to be some big differentiator in their products. This is when Srijee Decors started offering elastic-fitted bedsheets, which were a big hit. Now nearly 50 per cent of Srijee’s business comes from its online store.
It’s businesses like Srijee with annual revenues of some ₹10 to ₹20 crore, that Shiprocket is targeting. Saahil Goel, Co-Founder and CEO of Shiprocket calls these SMBs the heartbeat of India. “We went after, and continue to go after, this direct commerce piece of the market, which used to be less than 1 per cent of the total market, 5-6 years ago. Today, it is 15-20 per cent of the total online market,” says Goel.
Key driver
“If you look at the overall e-commerce landscape today, it is probably at $90 billion in India and poised to be $250-300 billion in the next few years. Of this, $90 billion, $15-odd billion today comes from direct commerce,” says Goel.
While the Unilevers of the world are doing direct commerce, there are some digital-only start-ups and a long tail of over 1,00,000 merchants who are just starting their online journey. This is the segment that excites Goel. And Shiprocket, which turned Unicorn last year, is going all out to create awareness among them, and even help them with financing for their online journey. In addition there are the traders who are moving online.
In November, it announced Shiprocket Capital, through which it said it aims to disburse around ₹100 crore to SMBs in the next 12 months. Around ₹35 crore has already been disbursed to enable around 150 SMBs to scale their business.
The idea behind launching the capital arm of Shiprocket, says Goel, is to help the small players servicing all kinds of unique niches to grow their business. “Right now they’re limited and saying I can put only X amount in marketing, X in sourcing and that’s it. I’m going to make one lakh a month. I can’t do anything else. Until you show them the view that you can actually use the capital to be able to run more ads and buy more goods and we can help you scale your business.”
Interestingly enough, Shiprocket, which started life as Kartrocket in 2012, doing all sorts of things to enable small businesses, pivoted to focus solely on shipping. It became an aggregator of courier brands. But now it has expanded, offering all sorts of solutions from payments to tech support to financing.
“Today our payments business is processing about ₹1,000 crore. It’s only like a year plus old,” says Goel. “We only scaled up shipping initially because that was the largest problem when we started, but the vision has always been to say I’m going to enable an alternate channel for the heartbeat of India, which is small businesses.”
But doesn’t ONDC have the same vision and mission? “The difference is that ONDC is much more broad. And ONDC will enable commerce where it has not happened at all,” responds Goel, adding that Shiprocket is working with the disruptive platform too. “We were the first inter-city logistics player on the network and the largest even today. We are a seller app as well. We help our merchants at one click to import their catalogue into Shiprocket and then in another click it gets published on the ONDC buyer network.”
A recent report by Bain & Company, in collaboration with Flipkart, says that three key drivers of e-retail growth that have played out in India, include improved physical and digital access, enhanced affordability and convenience, and emergence of digital ecosystems. It also describes how the seller ecosystem in India is expanding rapidly, with two-third of new sellers coming from Tier-2 cities. With stories like Srijee’s, the 25 per cent annual growth levels of e-tailing forecast by Bain& Co does seem achievable.
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