Expanding Social Commerce in Tier 3 and 4 Cities
Expanding Social Commerce in Tier 3 and 4 Cities

ShopG, a social commerce platform, announced the closure of its seed round of $1.5 million from Orios Venture Partners & RPSG Ventures, India’s leading early-stage venture capital funds. Angel investors like Rajesh Yabaji - CEO Blackbuck, Raghunandan G - Ex CEO Taxi for Sure, Prasanth Nair- Ex Flipkart, Alibaba also participated in the round.

Started in Nov 2019, ShopG has built a social commerce- platform powered by micro-entrepreneur community leaders that are changing the way the next 500 mn customers beyond India's top cities shop for their daily household needs. ShopG was founded by Ankur Arora, Abhishek Mishra, Pranay Suwalka, and Yogesh Nehra, alumni of IIT Delhi, IIT Kharagpur & ISB with past experience in building & scaling startups like Cleartax, OLA, Rivigo, Delhivery.

The infusion of new funds will be used for expanding the Community leader network in Tier 3/4 cities, scaling technology, building a supply of small regional brands & creating a suite of D2C branded products. Today, ShopG has 1,000+ community leaders serving over 1 lakh customers in a single Tier 3 city & the business has proven profitability in the city.

Commenting on the fund-raise, Ankur Arora & Abhishek Mishra, Co-Founders, ShopG, said, "Next 500 mn internet customers, from Tier 3/4 cities of India, who earn an average household income of Rs. 25000-30000 per month, prefer assisted buying from someone they trust and have low Average Order Values (AOV) < Rs 250; making it impossible for existing E-commerce 1.0 players like Amazon, Flipkart, etc to service them with high customer acquisition and supply chain costs."

ShopG Secures $1.5M Funds to Expand its Community Leader Network in Tier 3/4 Cities

"Our network of community leaders who are mostly women, inspire trust as well as serve them at Zero Customer Acquisition Cost and 10X better supply chain. ShopG partners with regional/small brands that offer good quality products, but have had limited distribution reach. These products are made available and aware to customers via the community leaders at great bargains," he added.

Anup Jain, Managing Partner, Orios Venture Partners, stated, "Social commerce is currently at $1.5 bn - $2 bn in India and will scale to $25 bn by 2025 or earlier on the back of smartphone ownership that has crossed 500 mn in 2020 accelerated by COVID. Most of this growth has come in Tier 3 cities like Solapur, Bareilly, or a Tumkur. In China, social commerce makes up nearly 12 percent of retail and has created 4 unicorns over the last 5 years with more than 20 funded companies. The growth took off with growing smartphone penetration which is bound to happen in India as well. Daily household needs comprise the largest chunk of this. We are excited to partner with the ShopG team which has developed a profitable model bringing the power of micro-entrepreneurs, digital-ready customers, and tailored set of small brands including their own, on a common tech platform."

Abhishek Goenka, Head & CIO, RPSG Ventures said, "We are very confident about the growth potential of social commerce in India. With smartphones and the internet penetrating the smaller cities in India, this TAM is now more receptive to transacting online and buying branded products provided the platform is able to instill trust and authenticity. ShopG’s business model offers a unique way of providing this and service the low AOV Tier 3/4 customers with industry-leading CACs and logistics cost. We are thrilled to partner with the ShopG team who has created a sustainable business model utilising a strong network of community leaders. We are also very excited about the opportunity for ShopG to leverage their reach and understanding of what customers want in Tier 3/ 4 cities of India to launch a number of private-label brands such as Ohayo."

ShopG has been built with a deep customer analytics engine that defines clear actionable next steps to help grow CL’s businesses with minimal effort. The CL lifecycle from onboarding to managing orders, delivery & earnings is gamified which results in CL loyalty and stickiness. ShopG has also identified a price-quality gap in the skincare segment and launched a D2C owned brand named “Ohayo Natural”. With industry-leading unit economics, ShopG is now looking at an aggressive scale in 300+ cities in the next 3 years.

Stay on top – Get the daily news from Indian Retailer in your inbox
Also Worth Reading