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Shweta Upadhai, a resident of North India, in July last year, had a problem trying to buy a smart TV for her mother. Prices. She could not live either way.
The closest thing she got was from Reliance Digital, a chain of electronics stores run by India’s largest real estate industry.
“When I asked the store manager to reduce the price of Flipkart, he mentioned the new price, which is still a few thousand rubles more expensive. CASIA.
Although Upadhai made the purchase at that time, other consumers in India developed the experience of scanning stores to find out what the products looked and felt and then saved a little money in the process by buying online.
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Kushnud Khan, co-founder of Benzouer-based B2B e-commerce startup Arzou, is looking to boost its trend in India — offering fast-moving shopping in stores and discounts related to online market offers.
“We are equipping offline sellers with the tools to compete with pocket-sized online sellers,” he said. CASIA In an interview.
Interestingly, when Philippart began selling large items in 2016, it was Khan who built it from scratch. Three times in it–During FlipCart’s year-long, Khan said, he learned a lot about how online shopping platforms — with great deals and special connections with manufacturers — remove customers from physical stores.
I was part of something that hurt offline retailers, one of the major business communities in India. At Flipkart, I started a major electronics category for devices, and by 2017 I would have increased it from zero to $ 500 million, ”said Khan.
Rousseau Ratore, another founder of Arzoo, is also a student of Philipppart. He was responsible for delivering the last mile supply to Flipkart Grocery.
Together, Khan and Ratore Arzooo launched retail stores in 2018 with a large number of SKUs — a little over 5,000 — far more than the 300 to 500 products they can store in their own store. The company has partnered with manufacturers of white goods such as washing machines, refrigerators, televisions and air conditioners so customers can buy them on their own without having to store them in their own stores.
Offline sellers can only sell what suits their store, Khan said. By comparison, online marketplaces are building millions of square feet of warehouses that can make special deals with manufacturers.
“Since e-commerce has grown in India, there has been no playground in the retail sector. Due to capital and space constraints, a neighboring store cannot buy in bulk. We can only afford them with virtual stock,” Khan said.
Bodybuilders use this virtual machine to find products that their stores do not carry. Arzooo delivers the goods in two to four days. This lead time is the same as Amazon and Flipkart.
Khan argues that consumers who buy electronics prefer to buy after seeing the products they follow. In addition, due to the uproar between brick-and-mortar retailers and online marketplaces and the government’s e-commerce regulations, the manufacturers of the first-of-its-kind equipment are now offering huge prices online from Arzoun.
“When we work with major and some small white goods manufacturers, our customers are now equal to what Amazon and FlipCart offer in terms of product selection and price.”
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Over the past three years, a number of offline retailers — the Confederation of All Indian Traders, the All India Mobile Retailers Association and the All India Consumer Products Distributors Federation — have lodged official complaints with the Indian government in response to overseas prices. Owned by e-commerce companies. This has forced the government to change the country’s laws on foreign direct investment in 2019.
The laws now prohibit foreign-funded online marketplaces from affecting product prices on platforms. However, Amazon and Flipkart have found a way around the rules. In order to comply with the rules that marketplaces may not hold the majority of sellers on their platforms, Amazon has adjusted its stake in Cloudtail, one of the largest sellers. Big deals are still available in both FlipCart and Amazon, and local retailers are not the ones to reduce prices, he said.
Brick and mortar stores have to contend with these market conditions as online marketplaces continue to be priced. “Store owners often use the platform to counter products. For example, a customer comes to their store to buy a washing machine. The store manager tries to sell that customer a modified washing machine model from our app, which is not available in the store.
More than 15,000 physical stores currently use the ARzoO app to acquire electronics. So far, US-based 3 Lines Venture Capital, Jabar Internet and Zum Video founder Eric Yuan have raised a total of $ 15 million.
Like other Indian technology startups, they will digitalize retail stores and eventually lend, Arzooo plans to do the same. The company will soon launch the “Buy Now, Pay Later” option for sellers and is working to offer a short-term loan. It has launched the BNPL pilot in Bengalgu and will expand the program to vendors in the next quarter.
This article is part of KrASIA’s “Startup Stories” series, where KrASIA writers talk to the founders of technology companies in South and Southeast Asia.
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