Unorganized Retail in India
As of 2012, India’s $455 billion retail market was dominated by the unorganized retail sector. The organized segment had accounted for 8% of the overall retail market in India, according to a Booz and Co and Retailers Association of India (RAI) February 2012 study.
For small retailers such as Gulab Chand in Bangalore’s HSR Layout, a residential pocket, the main challenges were
- to keep a tab on inventories across several dozens of categories of products
- manage vendors and working capital
- to ensure that his loyal customers do not switch to the newer large format retail shops in the locality just because his shop does not stock what the customers are looking for
“I don’t need a computer; it will take a lot of space. If I could track all of this on their mobile handset, that would be great,” said Chand, who migrated from Rajasthan around ten years ago and dealt mainly in grocery items.
Khoslalabs was a technology product incubator founded by Vinod Khosla and Srikanth Nadhamuni to impact the financial sector at scale by rapidly prototyping product ideas. One of their first product ideas was an attempt to help small-scale traders become more efficient. This was because India fundamentally has been a shop-keeping country and a lot of retail is still in that mom-and-pop format.
We worked with them in 2012 to prototype multiple mobile fintech products and bring them to market. This involved working with Aaadhaar and bank APIs, integrating with fingerprint and iris-based biometric devices, and developing products for new internet users. Some of the first things we prototyped were Kirana-based bill payment solutions, money deposit, transfer and withdrawal solutions, and various POS products.
The products that we prototyped and tested with users over two years were eventually launched formally as Novopay. Today, Novopay has over 100 employees, has a presence in over 140,000 retail outlets, and processes over 5 million retail transactions every month. Novopay is silently working with the entire Indian Kirana system to reach banking to those who have not yet experienced banking services.
Today, Novopay has over 100 employees, has a presence in over 140,000 retail outlets, and processes over 5 million retail transactions every month.