Online industry is growing in India with increasing interest and faith of entrepreneurs in online medium. Etail is catching up slowly along with healthcare, education and entertainment. While industry experts say that availability of FMCG and CPG goods will drive the growth of etail in time to come. Recently Iamwire caught up with Vijay Singh, CEO- Aaramshop. Aramshop is an online service platform that operates in NCR and offers FMCG and CPG goods. Speaking about his venture Vijay pointed out that AaramShop is not a retailer, but rather a hybrid retail platform for independent neighbourhood retailers, where they can connect with their consumers who have the option to select from a comprehensive range of brands.
1. What exactly motivated you to come with the business model which is rare in India?
The Consumer Packaged Goods (CPG), Fast Moving Consumer Goods (FMCG) brands currently focus on traditional marketing to reach their consumers and their budget allocations towards new media, while increasing, are still very limited.
While we understand their compulsions and the limitations of the current digital media options, we wanted to create a unique marketing platform that enables these brands to actually “sell” their products to the modern consumer and do so without re-creating complex distribution & sales infrastructure.
Also we believe that the consumers’ lifestyle changes make online retailing of CPG / FMCG brands a viable business today, so long as the costs of the involved logistics are kept realist and we reckon our unique hybrid-retailing model is a possible solution.
While there has been a lot of focus on the modern retail formats / chains and no one has really leveraged the strengths of the independent neighborhood retailers. We wanted to create a platform that enables these retailers to become competitive, rather than be a competition to them.
So we created AaramShop – which is not a retailer, but rather a hybrid retail platform for independent neighborhood retailers, where they can connect with their consumers who have the option to select from a comprehensive range of brands.
2. What are the initial challenges you faced during ideation and execution of it (ideation) in to virtual Aaramshop?
We are still in our “initial” stages (we are in our 2nd month only) and are on a high-learning curve. The initial focus is to get the technology to work seamlessly on all connected devices for the consumer. In time as we add features, I am sure we will have our hands full with challenges.
At the ideation stage the tough bit was to move our thinking away from the generic and tried (and tired) models. Eventually it helped us create unique models and processes, including a few that we have filed patents for.
3. How it is difficult to integrate your online service with hardcore offline retailers?
This is the tough bit but this is where we had the best learning. The neighborhood independent retailer has never had a reason to be digital and only a handful of them actually have PCs in the store (predominantly to do stock management), now with AaramShop these guys are suddenly starting to get orders on their emails.
Once they retailers actually see what all they stand to gain when they join AaramShop, for them to activate the email on their phone or to get a PC in the store is a non-issue. We are also experimenting with a web-printer to try and make the process seamless – but that is still some time away.
So while we do not see an issue on the integration with the 1st tier of independent retailers, maybe as we move to the next level there might be some variations.
4. As you are giving free service at both ends — consumers and retailers. What is your revenue model apart from advertising?
You put it correctly, AaramShop does not make any monies from either fee or commissions from retailers for transactions. The retailers are given not just access to AaramShop absolutely free of costs, but they also get an embedded permanent presence free of charge. The usage is also completely free for the consumers.
AaramShop’s revenue models are based on brands that are interested in using the multiple advertising and marketing options, which are available on the site (and some that can be logically extended beyond the site) in order to ensure that their brands sell better online. Analytics and targeted marketing would be large revenue options for AaramShop.
While some aspects like embeddable QR codes, brand widgets etc. are free, the recently launched Value@Home Voucher Program is a paid initiative.
CPG / FMCG brands have been struggling with online sales not just in India, but across the world – if we can demonstrate a solution that addresses that pain point, revenues will follow.
5. What amount of traffic you are getting at present and what numbers (traffic) you want to achieve in near future?
Our current traffic is fairly limited; however, the quality of WoM is awesome. We are addressing a crying need of the “short on time – high on stress” TG, and once we initiate our marketing initiatives we will see a relevant increase.
Our thrust is equally on the co-marketing initiatives that we are running with the retailers to reach out to their consumers within their catchment areas.
6. As of now you have operation in five cities under NCR. What is your expansion plan?
We started with the NCR region and about 70 retailers have joined us in the last 45 days. This month we would open it up for retailers from other cities as well and this would be an ongoing process. We are keen to ensure that every household in the major urban centers has an option to choose an AaramShop – for that we would need to have thousands of partner retailers and we hope to do it over time.
We will roll-out the platform to a couple of countries sometime next year. However, “aaram” is our middle name so we are not really working against any clock.
7. What is the seed capital needed to foray in to business model like AaramShop? Are you looking to raise fund to spread your wings to other cities?
I have enough experience on building organizations to know that it really depends on how one looks at things – there is never enough money for a complex business model and there is always enough money for it.
We have adequate seed capital to grow the business and our intent is to make a commercially viable business at the earliest. I believe that there are enough resources available for a sensible business if one was to try and raise it.
Importantly, our model has been designed not to be asset heavy as we are not doing investments in warehouses and logistics – we are leveraging the AaramShops with their proven expertise.
8. What is your suggestion for likeminded entrepreneurs who want to begin with AaramShop’s business model?
It is a fresh model, it is unique, it is untested, it home grown and hence it is going be a tough ride with not too many existing benchmarks. So there is going to be lots to learn and is bound to be a lot of fun. Think through and jump in.