How Shotang aims to revolutionize the traditional retail distribution?

Founded by three colleagues at the sales team in Noida, Shotang aims to revolutionize the traditional retail. As told by Anish Basu Roy, CEO & Co-Founder, Shotang was a self-coined adjective by him along with other two co-founders Anter, Vishal to describe any person or idea that was absolutely rocking!                                                                                                                           In an interaction with Retailer, Roy shared how he plans expansion in the times when traditional retailer are not much into technology.

How was the idea of Shotang conceptualized?

The idea for Shotang was conceptualized since most of the problems that we are solving have been experienced by us during the course of our corporate careers. The core team at Shotang has spent over 3 decades in the retail distribution space with some of finest global companies such as Nokia, Coca Cola and Britannia.

Hence we have a deep understanding of the nuances of this business and the challenges involved. As a result of this, it was fairly natural for us to evolve a business model to address the various challenges in this ecosystem. Our subject matter expertise is also one of the biggest strengths as a company, since we understand the traditional retailer very deeply.

What is the need you are addressing in the market?

The retail distribution industry in India is pegged at about 630 billion USD and has about 15 million retailers. Shotang intends to play a critical role in helping this industry scale up with strong double-digit growth in the next decade. 

We believe our technology will drive significant operational and working capital efficiencies in the entire distribution channel. Being an open marketplace, Shotang will help manufacturers with rapid market access. Retailers benefit from higher access to more suppliers, more products, better prices and structured credit.

How is Shotang creating a difference in the retail ecosystem?

The business model of the company doesn’t disadvantage anyone and mirrors the business rules of the industry. We are bringing together all critical elements of the ecosystem on the same platform. This creates significant synergies of convergence for retailers, lenders, distributors, manufacturers, and logistics services.

Please share the current Business size.

Currently we have over 5,000 retailers transacting on our platform every week. Our selection comprises of over 15,000 products that get transacted by these retailers across multiple cities. Our average transaction values are over INR 22,000. We are rapidly expanding into the top 5 cities of the country and launching several brands exclusively on our platform.

Who is your target consumer? Could you please share how you have detailed your consumer?

At Shotang, we are aggregating resellers and consumer brands. Any company looking to fast-track and digitalize their order fulfillment process and sellers aiming to better serve their clients would eventually be our target consumer.

Talk to us about the ongoing trends of cloud-based eComm industry?

The smartphone penetration in the country has been rising rapidly. This has proven to be the biggest enabler for the growth of cloud-based B2B ecommerce. Traditionally, small retailers have not been able to adopt technology due to the high costs involved. However mobile-based and cloud-based technologies are much more affordable and easier to adopt.

It is clearly the next big wave for ecommerce in the country. We are country of traders and small businesses and that presents immense opportunities for B2B ecommerce companies, which can enable better market access and efficiencies. As more and more small businesses begin selling to consumers online, there will also be a strong need for them to do their upstream procurement online. Shotang will continue to play a pivotal role in enabling that.

Have you raised any funding so far. What are your plans to use this funding for?

We recently raised USD 5 million from Exfinity Venture Partners and Unitus Impact Livelihood Funds. We would be utilizing these funds in expanding our service offering to the top 10 cities, whilst strengthening our current technology infrastructure.

We are very clear about our choice of investors. It is important to us that funds that choose to invest in our company understand our business and long term vision well. Even now if you observe, both our investor funds have a deep focus on businesses like ours. Exfinity is focused on B2B technology companies and Unitus Impact looks at supply chain/ distribution oriented businesses globally. It helps us align on business objectives and milestones much more easily, since we are on the same level of understanding of business imperatives.

Share your plans towards expansion into tier II and III cities of the country?

We eventually want Shotang to be the most preferred sourcing channel for all the 15 million retailers across the country for all their inventory needs. Beyond that we wish to enable them to run their businesses much more productively and efficiently. 

Aggressive, yet calibrated, expansion is a priority for us in the near future, as we look to expand our operations into 10 cities across India. We will additionally be looking to consolidate our presence across the top five product categories as a major industry player.

We are working on solving various last mile logistical challenges in semi-urban and rural geographies as well. We believe it will help us expand to the Tier II and III towns as well aggressively in the future.

What has been your biggest challenge so far? How are you addressing it?

Being a digitally underserved market and since not all retailers are very technology savvy, it has always been a challenge to help them adopt our platform. But our biggest learning is that if your proposition to the user is valuable enough, the user will always adopt it even if it involves learning new technology.

That has been the case with us as well. We observe a rapid uptake of our mobile app –based technology by the retailers. This is because the retailer gets the best pricing, widest selection of products and significant convenience on ordering, payments and delivery.

 Today our primary challenges are around offering working capital credit to the retailers and innovative-yet-inexpensive mobile-based payment solutions. We are working on the same and you will shortly hear about our innovative models on providing structured credit lines and mobile-based payment solutions.