How is ShopG transforming the unorganised retail e-commerce sector?

ShopG, a social e-commerce platform, powered by micro-entrepreneurs aims to change the way the next 500Mn customers shop from Tier II and III cities. These customers, who have a household income of 25-35K, prefer assisted buying from someone they trust. But they have to settle with low-quality unbranded products since they can’t afford costly branded products. The company aims to a network of entrepreneurs who instil trust amongst these customers; who belong to the same social network and offer them great quality small branded products.

The company, in a short span, has disrupted the market with a network of 1000+ women entrepreneurs serving over 1 lakh customers. With CiOL, Ankur Arora, CoFounder, ShopG, outlines the Success Story of the startup, and how the business helped women micro-entrepreneurs.

What was the problem statement behind the idea?

The problem that really intrigued us, when we started ShopG was that there are 700 Mn Internet/WhatsApp users in India. Only 8% of them shop online today. For people like us, e-commerce has solved problems of assortment, availability & convenience. We started exploring why the majority of Bharat customers were not buying online. We found 2 major challenges:

1. Lack of trust w.r.t. Online shopping: These customers, living in Tier III cities and below, prefered assisted buying from someone they trusted. However, enabled by the lowest ever data tariffs, these customers spend 2-3 hours a day on social platforms like WhatsApp, Facebook, etc. This is being leveraged by resellers who influence those within their social network making them more receptive to online shopping.

2. Unaffordability: These customers cannot afford high quality branded products. Hence, they have to settle with low-quality unbranded products. Thousands of small brands that offer good quality products have limited distribution reach in the traditional retail channels. The latter also have low margins to advertise, but can be made available and aware to customers via resellers at great bargains.

What are the changes you are bringing into the market?

We address the unfulfilled aspirations of the next 500 Mn Bharat customers living in Tier 3 cities. Number one, we are creating an interactive and social shopping experience online. In the physical world, shopping means “interactive and fun” and friends and family influence a purchase. We have replicated the offline shopping experience, in the online world through community buying via experts, peers and friends, on the same platform.

This creates an enriching experience via fun, gamified features, videos & rewards. We also offer a personalized experience via recommendations. Secondly, today, the market is flooded with thousands of subscale brands that are rudimentary, non-aspirational and have poor product formulation.

Just to give you a perspective, in the category of Beauty and Personal Care itself, there are approx 20K+ subscale brands. Tier II-III customers aspire for good quality products at affordable prices, but branded quality products have always been out of reach for them. Hence, the platform introduces 100+ small brands at affordable prices and have set up intelligent curation of products by setting up scalable processes and product features that ensure quality checks, to gain the trust of the micro -entrepreneurs and deliver on the unfulfilled aspirations of their customers.

Lastly, we have a deep customer analytics engine to enhance the reward-to-effort ratio for micro-entrepreneurs. The platform offers a seamless personalized experience for customers and data-led insights combine social behaviour-as well as user behavior to deliver personalised shopping experience to customers. With the help of this data, ShopG provides actionable steps for micro-entrepreneurs (community leaders) to generate more business with reduced effort.

What are the opportunities in the segment? What has 2020 changed for you? How are things now?

We believe that India is at the cusp of a social commerce revolution. The new age social commerce platforms that are designed with such innovations, will empower the next 40mn community leaders. They will also establish an efficient community social e-commerce system for the next 500 mn e-commerce customer.

I believe there are a few “Flipkarts” of Social commerce in the making. As per Bain’s report, “India’s social commerce sector will be double the size of the current e-commerce market within ten years. Social commerce is worth $1.5 to $2 billion GMV market today, and will likely hit $60 billion to $70 billion by 2030.”

But for us, our entire growth has come in 2020. We have seen huge adoption of online shopping from Tier cities. We also launched our own skincare brand “Ohayo Natural” by identifying a quality-price gap in the skincare segment. 15K women adopted this range of products over the last 2 months. Now, we are looking forward to expanding ShopG in the next 100 Tier cities. We are also aiming at the creation of a network of 50K women entrepreneurs to serve 5 Mn customers. Further, we aim to partner with 600+ small brands and also launch 30+ D2C owned branded products. We aim to address the unfulfilled aspirations of our potential customers.

Funding

We have raised $1.5 Mn. Backed by Orios Venture Partners & RPSG Ventures, India’s leading early-stage venture capital funds and Angel investors like Rajesh Yabaji - CEO Blackbuck, Raghunandan G - Ex CEO Taxi for Sure, Prasanth Nair- Ex Flipkart, Alibaba.