Our Villkart Model Provides sourcing logistic and marketing support to kirana stores

Villkart provides sourcing, logistic and marketing support to Kirana stores

“We observed to see the village Kirana shop owners struggle in sourcing their weekly or fortnightly supplies. They would travel in the morning bus to the Local town, spend the whole day purchasing their stocks and return in the evening. Of course, these days private transport is available, but the model of operations remains the same. Kirana shop owners have to depend on wholesale markets in cities for their supplies.

The urge to do something connected with the rural economy, the idea behind that to build a rural grocery supply chain. “We studied the rural supply chain and consumer behaviour for serval years, before starting Villkart – an inventory-based model that connects village Kirana shops ensuring regular supplies. Thus Villkart (An initiative of SAI INNOVATIVE EDUCATION AND TECHNOLOGY SOLUTIONS PRIVATE LIMITED) came into existence.

“We procure staples and other items, repack and sell to Kirana stores in rural areas. The Kirana stores in rural areas cannot afford to buy in large quantities. They buy multiple times and in lower volumes. We repack according to their requirements in smaller quantities and deliver thrice every week at their doorsteps,”.

On average, there is a small Kirana shop for every 250 members in a village. “Our reach extends from district to smaller towns and villages. We deliver even if there is a single shop in a village and all categories of items that are supposed to be in a Kirana shop.

The business model

Villkart’s business model is something like this. Grocery shop owners in villages, who are enrolled with the company, can place their orders through the Villkart mobile app or through telecalling/Whats apps and their orders are delivered within a day or two. The Villkart app is available for registered customers only.

“We are going to start from Nawada district and going to reach grocery stores in around 189 Panchyat or approx 1000+ villages. Targeting over 500+ billable customers. “We are also looking at expanding in two more nearby districts Nalanda and Gaya.

Local sourcing

The company follows a local sourcing strategy. Villkart sources products such as atta, sooji and other flours from mills in the districts. Some of the FMCG items are sourced directly from factories and from local distributors.

Presently the shop owners in villages used to go to the nearest towns or taluk headquarters to source their supplies, incurring additional logistics costs. They wouldn’t get all the items in one place. They used to buy from four or six of the wholesalers and arrange their own transport or even on their two-wheelers to take the goods to their villages. Such risks of transportation and the distribution layers in between are going to be reduced After Villkart reach out to the Kirana stores.

Depending on their purchase cycle, they will buy it every 10–15 days. Once, we are delivering them weekly/every three days. As a result, they can buy now for their weekly requirement. Our model will help them reduce their working capital investments on inventory, which they are investing in buying additional products or trying new products. Villkart will operate on a cash delivery model.

To address the issues of the credit cycle, Villkart is in talks with fintech companies and financial institutions to provide credit linkages to retail shop owners.

Villkart will start to sell more SKUs, 60 to 70 per cent of which is sourced from local players. We plan to add more categories like stationery and cattle feed to the SKUs.

Company Villkart Expect The average monthly billing for each registered Kirana shop with Villkart will be around ₹22,000, which can go up to ₹60-70,000.

“The Villkart model will help to expand my market reach while eliminating middlemen, The farmer, from whom will purchase directly and rural consumers are benefited. Villkart’s model will help take a small brand of products to the interiors while reducing marketing costs.

The rural market in India is dominated by local brands. “About 48 per cent of the brands sold in rural areas are from local producers, adding that in a category like detergents, about 92 per cent of the sales are local brands.