The Opportunity #
Traditional wholesale FMCG distribution in Tier 2, 3 India is an extremely large market (100 billion dollars). But a large portion of this actually flows through the indirect distribution channels and is plagued by several inefficiencies — ranging from lack of transparency and parity in pricing due to layers of intermediaries, non-availability of a wider assortment of products, and a lack of convenience for the small kirana store owner, which negatively affects revenues and profitability.
Further, smaller challenger brands in India who are unable to service these rural kirana stores directly find it extremely difficult and prohibitively expensive to access customers in these markets.
These inefficiencies / challenges are partly created by the structures and markets that exist, and are partly a creation of the perverse incentives that enables a few participants. For example, wholesalers need significantly higher capital in order to grow and break out. The constraint of capital inadvertently forces them to limit their range of SKUs to brands that are moving faster, with hardly any consideration to the retailers. This is compounded by the brands also having inaccurate cost and resource allocation measures in place. Above all else – the support system required to support the smaller challenger brands are virtually non-existent in the market today.
There is another piece of the puzzle that is seldom discussed (and is perhaps the most crucial factor of them all). The dependence on limited resources and margins, and the need to be at the mercy of other larger players — all of which creates significant opaqueness in the system and compromises on-ground visibility.
The ApnaKlub Model #
ApnaKlub’s differentiated model of using a scalable network of highly motivated entrepreneurs to aggregate demand and deliver FMCG products to these kiranas is an elegant solution to solve these challenges, while simultaneously unleashing the latent potential for micro-entrepreneurship across the country.
ApnaKlub is looking to disrupt the traditional wholesale FMCG distribution landscape in India through its reseller led B2B platform for retailers and wholesalers based in Tier 2,3 areas in India. Founded by HBS Alumna Shruti and Manish Kumar, Ex-Zonal Business Head, METRO Cash & Carry India in 2020, ApnaKlub has built an independent sales network for brands that want to penetrate new markets.
ApnaKlub’s asset-light model 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. The platform provides these unorganised ground-level wholesalers with an organised supply infrastructure with the best pricing and consistent product availability. Within 7 months of the inception, ApnaKlub has serviced 2500+ partners across 4500 pin codes.
Commenting on how they are looking to solve for inefficiencies that exist in the market, Shruti says:
“ApnaKlub empowers its partners in semi-urban and rural areas, by providing organised supply and digital tools so that they can build an efficient micro-business catering to the needs of shopkeepers and large families around them. Their hard work and understanding of local needs coupled with our digital tools and learning modules makes for a winning micro-business.”
ApnaKlub’s mission to improve outcomes for the smaller MSME retailers across non-metro India through the innovative, tech-enabled and agent-led model is proving to be a deep-impact and profitable business model. Among its many offerings, ApnaKlub also offers a very unique direct-to-partner customer delivery service, wherein an ApnaKlub partner can get the products delivered directly to their customers at a predetermined price.
Krishna (ApnaKlub wholesaler) from Gaya, Bihar has this to say on the impact ApnaKlub has had on his business and work life:
“ApnaKlub ke saath business karna aasan hai, kyunki isme zyada paisa / investment nai lagana / karna padta hai. Chote traders, jinke bade khwab hai business ko aage badhane ke, unke liye ApnaKlub hamesha madat karne ko taiyaar rehta hai. Maine isi mahine 2 lacs tak ka business kiya hai ApnaKlub ke saath aur main inke saath jud k bahot khush hun.”
(translation: Doing business with ApnaKlub is very easy because one does not have to invest a lot of money. Small traders who have big dreams of starting and growing their own business will benefit a lot from ApnaKlub. Just this month, I earned revenues of upto INR 2 lacs and am extremely happy partnering with ApnaKlub.”)
The team behind ApnaKlub #
Shruti and Manish bring complementary skill sets and approach to ApnaKlub.
Shruti, with her orientation to product strategy, strategic thinking and problem solving skills, is no newcomer to the Indian startup ecosystem, as she was already running a business before it evolved to ApnaKlub. Manish understands the ground realities on the FMCG distribution side of things very well, given his rich experience with retail and wholesale organizations.
Between the both of them, we found the right balance between strategy and execution, understanding of market knowledge, and the build-against-all-odds mindset required to build a startup in this space.
We at Blume are very excited to help Shruti and Manish disrupt the legacy FMCG distribution model in India and create a new generation of micro-entrepreneurs.
Ashish FafadiaAshish manages Blume’s growth stage portfolio companies, as well as portfolio headed for exits. In addition he supports fundraising activities for our portfolio companies as well as the Fund. An early member of Blume since 2012,…
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