Changing How Rural India Shops

Supply Chain Management plays a key role in the economy of any country. This contributes to improving the relationship with customers, suppliers, income generation, and most importantly, the availability of products in the remotest of places. But, there are many challenges that a country like ours is highly susceptible to because of its vastness and diversity.

We interviewed Ms. Ajaita Shah — CEO of Frontier Markets, one of our cohort companies in Supply Chain Labs, to have a closer look at how her enterprise, which focuses on rural India, is carving a new path for rural outreach with innovative supply chain management via assisted e-commerce.

She has vast experience in this particular field and she has been constantly working with social enterprises, microfinance, rural distribution and marketing to ensure that companies get a never-before rural inlet; while also empowering rural women.

Here are the notable key points taken from the interview:

Frontier Markets: Their Role and Responsibility in Supply Chain

Frontier Markets, essentially, are the suppliers to rural customers. What they do is bridge the gap between access and help brands to reach rural customers and remote villages, especially rural women. The entire model is based on assisted commerce that is fully run by women entrepreneurs known as Sahelis.

Shah says, “We essentially work with three critical things:

  • One, generating demand for products and services — helping rural customers actually know what the products are and what the services are.
  • Second, we do physical fulfilment. We take the products and deliver them to the doorstep of where the actual customer lives.
  • And third, we’re collecting data to help companies understand better details and insights about rural customers.

We do this through a physical and a digital platform. Our supply chain essentially is a group of rural women who we invest in and who are connecting us to the customer.”

Challenges faced by Companies: How can they overcome them?

Well, it is because of the massive market demand. In the last couple of years, rural customers are growing rapidly. They have access to the Internet, improved infrastructure, the desire to actually buy white goods and products and the money to make it happen. Almost a 2.2 trillion rupee market is untapped today.

“The reason why it’s not tapped is not because of demand, but it’s actually product and service companies’ lack of efficiency to reach this customer base. This rural customer is one hundred million households or seven hundred million people, but they’re scattered in seven hundred thousand villages,” says Ajaita.

Another challenge is digital disconnection. E-commerce platforms today have no outreach to the digitally-challenged rural customers.

Bridging the Gap!

Frontier Markets has designed its model in such a way that it’ll be helpful to connect to rural customers, who actually want genuine products and services. Frontier Markets partnered with companies like Samsung, Philips, Crompton, Bajaj, as well as even social enterprises that are coming up with innovative solutions. This assistance between the companies and the people helps the total ecosystem to work fluidly.

Rural customers get the confidence to buy online and the companies get better access through know-how. So, the companies can essentially bridge the gap between rural customers and their infrastructure limitations. They can continue their services even if they don’t have any sort of infrastructure present in that particular place.

Tech won’t solve all approaches!

This is one unique way to handle the customers in a rural scenario with Sahelis.

According to Ajaita, this market has a customer base of half a million households and Frontier Markets has a network of 10000 Sahelis. They are the women entrepreneurs who are best at getting customer insights because they go into the hearts and minds of where the rural customer lives. Every data point is looked at with exclusivity. This data point can inform product companies about the actual demand for the product and then deliver the products.

What makes this system really unique in terms of services is that consumers can directly communicate about not what they want to buy but what they actually need on this platform. The model has been designed to look at the rural customer as a lifetime value solution. So, the customers trust their Sahelis in a way that they will intentionally buy everything from them, forever.

The rural market is not always a tech-centric market. Tech won’t solve all. Consumers here are more inclined towards a trusted face with a digital look — assistance is a significant factor here.

The vision of Frontier Markets

Ajaita, with her experience of 17 years, informs us that they do have some strong visions in place. They do value their rural customers, especially the rural women.

They believe that a woman is the most trustworthy, opportunistic service provider in the village. She can go into any house; she can have any conversation. Thus, she can become a very valuable asset in the entire system.

They also believe in a shared value principle. Like all the stakeholders in this system, from the suppliers, the field staff, the Sahelis and finally, the consumers — should all have an economic impact. Any product or service that they introduce, ensures that they track whether their rural customer is able to save money, make money or have a better life. That’s a very strong philosophy that they’ve always built on.

The Impact on Growth in the Rural Scenario in this Pandemic

Everything revolves around social commerce today. E-Commerce is based on online social data, that is curated from specific data points along the way. Frontier Markets has taken this concept and customised it in their own way and have modified the supply chain according to the demands of the rural consumers.

So, the influencers here are the Sahelis and they have strategic tools to assist the rural consumer, collect data points and help product companies assess the demand. It is a hybrid solution for social commerce — ideal for rural India.

“We understood our value very differently last year when the pandemic started; we realized that as a rural access company, our role in the ecosystem was going to be more critical than ever on a job creation perspective, on an essential delivery’s perspective, supply chain perspective, scale perspective and insights perspective. That’s really what encouraged us to grow. Even though the pandemic would have told most companies to slow down, we actually ramped up in a very significant way.

When it comes to pandemic response, we’re critically positioned to continuously help protect the rural customers. So, we’re looking forward to enabling jobs. We’re looking forward to continuing to bridge that essential delivery gap. Now, we will also play a significant role when it comes to health care and get involved in health education, insurance deliveries; Covid crisis response.”

The creativity and the tailor-made strategies make this women-led platform — Frontier Markets, one of the most robust end-to-end commerce platforms that provide products and services delivered at consumers’ doorsteps in villages and helps brands fulfil and curate their products in a marketplace easily.

How Machine Learning Can Help Save Overflowing Landfills #MeetTheCohort

Today, an increasing number of businesses are taking a technology-first approach to run their businesses and are looking to transform digitally — back end to front end, but the fashion industry’s back end is still run the same way it has been for decades.

The global retail fashion market is worth trillion dollars, with just under half of that being spent in China and the USA. The world produced 150 billion garments in 2018 alone, of which 50 billion garments or one-third remained unsold! A greater cause for concern is that the $3 trillion Global Fashion & Apparel industry is the second most polluting industry after oil, contributing to water pollution, air pollution and solid waste pollution.

With technologies helping in demand sensing, retail challenges across the industry can be reduced and ample potential and value in the fashion industry can be unleashed. It’s time for fashion businesses to adopt technology and redefine quickly.

Supply Chain Labs with Stylumia is trying to tackle some challenges that lie in the fashion industry — fashion trend forecasting, demand forecasting and prediction systems. Stylumia is an AI-led fashion intelligence start-up founded by former Myntra COO, Ganesh Subramanian in December 2015 with the goal of reducing waste in the fashion and lifestyle industries. Through its suite of proprietary solutions powered by ML-based prediction algorithms and demand science, the startup serves over 100 customers in India, the United States, Europe, Hong Kong, and Japan, ranging from Fortune 100 to small and medium fashion and lifestyle brands/retailers, as opposed to the intuitive fashion prediction and forecasting systems available in the market globally.

Stylumia uses machine learning to improve product assortments, optimize inventory management, and provide consumer-driven fashion forecasts, resulting in revenue growth, inventory reduction, and increased profitability of 30–50 per cent in under a year for its customers, with a 10x return on investment.

This is the time to expand and strengthen your online business.”

Stylumia sees an opportunity to help fashion firms, manufacturers, and exporters scale their digital businesses through the start-up’s top three products: Stylumia MIT (market intelligence tool) Stylumia FIT (fashion intelligence tool) and Stylumia Apollo (fashion predictor bot), which assist in forecasting fashion trends and predict demand in the constantly changing fashion business from the design and creation stage to the pre-season commit level to in-season demand and store distribution inventory with 80 per cent accuracy — helping clients scale their e-commerce businesses on a 360-degree basis.

A startup on the mission to help farmers increase their income

Rajendra Lora is a farmer’s son who has seen the struggles and challenges faced by a farming family. He is driven by the mission of helping farmers increase their income and help them manage their businesses better. As Rajendra puts it “I am not helping them earn more. What I am giving them extra is their own money, which is lost due to inefficiencies of the country”.

Agriculture is the primary source of 70% of Indian households. And more than 80% of these farming families are small or marginal, facing the maximum challenges and are most vulnerable.

To remedy this and address the pain points in a regular Indian farmer’s life, Rajendra Lora, along with his wife Chandrakanta Sahu, founded FreshoKartz in 2016. Coming from an agricultural background themselves, Rajendra and Chandrakanta have been able to build a strong value proposition that is practical to execute in the Indian rural landscape.

Focused approach: Freshokartz is currently focused on helping farmers buy Agri inputs more efficiently.

An average small & mid-sized farmer buys Agri inputs worth Rs.1 lacs a year, and equipment worth Rs.1 lac over a three year period. These purchases are riddled with issues — the retailers are far away from the farmers’ village, thus requiring the farmer to make the long journey on a working day to buy these inputs like seeds, fertilizers, etc. These frequent trips cost the farmer a lot of money.

Moreover, the quality of the seeds is unpredictable and availability too is erratic. Additionally, there is a 10% — 30% price fluctuation due to a lack of transparency.

In this scenario, Freshokartz offers farmers a strong value proposition and makes their agri-input purchases very efficient.

  • Door-step delivery on the same day
  • Wider choice
  • Predictability of quality and supply
  • Easy return policy

To help farmers make better-informed decisions, Freshokarz also provides farmers advice on what to grow, when to grow, how much fertilizer to use, etc. It also makes it easier for farmers to obtain financial assistance or insurance through its partners.

Freshokartz uses agronomists and contact centers to assist farmers with soil-based crop and fertilizer recommendations.

Unique business model

Freshokartz has built a comprehensive tech platform and app via which they deliver these services to farmers. However, knowing that most farmers may not be familiar with using a tech platform, Freshokartz has created a unique model of Village Level Entrepreneurs (VLEs). These VLEs, called Saarthis, are Freshokatrz’ representatives who help farmers buy the inputs they need and provide them with the advice.

Encouraging traction with inspiring long-term plans

Freshokartz currently serves 10,000 farmers across 100 villages via 100 VLEs. They are currently focused on Rajasthan and will continue to do so this year.

As the community of farmers connected with Freshokartz grows, it plans to help farmers also sell their products better by connecting them to buyers that can offer better rates, and support them with logistics and warehousing support to make the selling process more efficient.

In 3 years’ time, Freshokartz aims to serve a million farmers via 100,000 VLEs.

Supply Chain Labs is excited to support Freshokartz in their journey where they have dedicated themselves to reengineering and reinventing Indian agriculture to support Indian farmers and boost their productivity with products, agri-specialists, and education platforms.

A startup redefining intra-city logistics for perishables

Every year, nearly 70 million tonnes of food is wasted in India. This is largely because the cold supply chain for perishables is inadequate and broken. While large brands like Starbucks and KFCs of India have well-organised logistics services, smaller businesses do not. This area is extremely unorganised, with all kinds of vehicles, from vans to scooters, being used in the delivery of food cartons. In order to be able to save costs, hygiene is sacrificed, and jugaad logistical practices are employed.

Many small and medium-sized food and beverage businesses require assistance with everyday food logistics. In the absence of such services, they are not able to replenish stock often, as they are unable to service sales outlets frequently enough in a day. (How often have you noticed that the pastry in a bakery is stale by evening because the manufacturer delivers it only once in the morning?)

With the growth of cloud kitchens, artisanal brands, and an explosion of retail points (like modern trade stores, dark stores, and DC hubs), the need for efficient intra-city logistics for perishables is even more accentuated.

That’s where Just Deliveries (JD) comes in. JD is a startup focused on intra-city logistics for perishables. By offering a shared cold logistics service, JD is able to help brands put fresher stock of perishable items on store shelves and food-service outlets.

Just Deliveries aggregates service providers like delivery vans and ensures compliance with SLAs like temperature control, hygiene, cleanliness, punctuality, etc. Moreover, JD optimises capacity utilisation by sharing the van with several brands. As a result, JD is able to offer cost-effective, efficient, and timely service to brands. The tech platform and app provide visibility to all stakeholders and synchronise processes amongst them.

“At Just Deliveries, our goal is to assist brand owners with the cumbersome logistics process, allowing them to focus their energy entirely on scaling their geographical presence and core business,’’ said Mansi Mahansaria, Founder, Just Deliveries.

Supply Chain Labs is excited to support Just Deliveries in providing last-mile inter-city logistics for perishables. By providing more efficient and more frequent milk runs, it allows brands of perishable products to service retail outlets more frequently, thus helping keep fresher stock on shelves.

“Services like JD not only prevent food wastage but also directly impact the profitability of brands of perishable goods through lower returns of expired products and increased sales points. Can a brand selling paneer, for example, deliver fresh stock to 500 retailers every day by itself? By taking care of the entire logistics piece, JD is also enabling more individuals to become food entrepreneurs and enabling existing food entrepreneurs to expand much faster than they would otherwise be able to do on their own.

It is also a very large market. According to Redseer, food services is a $65 billion market opportunity in India, growing at 9% per annum and likely to reach $110 billion by 2025. Within the food services market of $65 billion, online delivery accounts for a market size of $4.2 billion, growing at 6–7%,” Prajakt Raut, Managing Partner, Supply Chain Labs.