ApnaKlub is a young, fast-growing start-up aims to recalibrate India’s retail ecosystem and is headquartered in the southern Indian city of Bangalore. The B2B wholesale platform has an intent to disrupt the FMCG landscape through resellers and wholesalers based in the country’s semi-urban and quasi-rural regions.
“We saw a lot of pull from small-town traders and retailers wanting to buy at our prices. We gradually pivoted to supply them sustainably and cut focus from other target groups,” explained Shruti, who goes by a single name.
“ApnaKlub also received word-of-mouth growth in the Hindi-speaking states. We’re doubling down on improving store incomes and consumer choice in these areas now,” she added.
ApnaKlub, the start-up
This May alone, the two-year-old firm raised US$10 million ($14.5 million) in a funding round led by American investment giant Tiger Global Management. This is amid a severe slowdown in funding for the start-up ecosystem in India.
“Indian CPG [consumer-packaged goods] retail is a $100 billion opportunity and Kirana stores own the majority of current distribution channels,” Tiger Global partner John Curtis said. “ApnaKlub is arming retailers and brands with the digital supply chain and credit tools to win across online and offline channels. Shruti and [co-founder] Manish Kumar have built a rapidly growing platform based on deep customer insights.” The two founders have a complementary background in strategy, product and FMCG distribution.
It’s a surprising move from Tiger, considering that it is known to bet on late-stage start-ups more than the ones in the seed and early stages.
Marquee investment firms like Sequoia India’s Surge, Blume Ventures, Whiteboard Capital, and Flourish Ventures injected over US$4 million into ApnaKlub in August last year. And, it is among the 20 startups of various stages selected for the Google Accelerator program from over 700 Indian emerging companies.
India’s rural retail landscape
Industry estimates suggest there are about 50 million people engaged in sales and commission-based jobs in the FMCG sector across India’s hinterlands. ApnaKlub essentially aims to address them by bringing rural retail into the mainstream digital marketplace.
Through ApnaKlub’s platform, a user can digitise their wholesale business as a rural wholesaler or expand their business as a shopkeeper.
Additionally, the system allows users to set up hyperlocal micro-distribution businesses to ensure better profits, access to a large assortment of brands, and access to stock for a steady supply of goods.
“A potential market worth $40 billion can be connected digitally. ApnaKlub allows anyone with a smartphone and a highly entrepreneurial drive to earn supplemental income by aggregating demand and supplying FMCG goods to retail (Kirana) stores in their local community. ApnaKlub takes care of order aggregation, transport, and inventory handling, and provides a zero-capital model,” Shruti explained.
ApnaKlub’s platform has come up with asset-light and zero-investment models – something to suit India’s rural requirements. Options like credit and supply-chain finance – in collaboration with non-banking financial operators – are also being rolled out, to attract more users.
Currently, over 5,000 merchant partners have enrolled on the start-up’s digital marketplace and the latest funding round will help the number reach 20,000.
In India, there are over 63 million micro-, small- and medium-sized enterprises, and the pandemic has forced a large number of them to pivot into digital platforms and other business models.
While most Indian start-ups and corporates are heavily tilted towards the urban centres, it is the semi-urban regions of the country that have the most business potential, and less cutthroat competition.
“We help retailers and traders in Tier 2 and 3 cities of India leverage their collective demand and geographic presence into a flourishing retail business, which provides greater consumer choice and delight, by providing access to a wider range of products at comparable margins, along with better credit and logistics terms than status quo,” Shruti concluded.