Empowering local ‘kiranas’ to modernise and thrive: Why We Invested in PepperTap

^{"By creating a network of branded,tech-enabled stores that procure quality products through their marketplace, PepperTap is upgrading local ‘kiranas’ with smart technology, reducing procurement costs and increasing their incomes through more footfalls. By allowing the kirana store owner to offer everyday low prices to their consumers, it enables them to compete successfully with modern retail"}

Krishna has been running his ‘kirana’ store in Kalkaji area of Delhi for the past three decades and locals here swore by this store. From daily groceries to FMCG products, Krishna was always well-stocked. However, with time, the store had lost its sheen. The dimly lit aisles, disorganized shelves, and dingy, rat-infested storage were becoming a deal-breaker for Krishna, and even the most trusted customers started looking for alternatives. Non-availability of home delivery options added to the chaos. The outcome: fading customer footfall and dwindling business. To think of it, stores like Krishna’s is a reality in India and account for more than 90% of the market.

With changing times and the availability of multiple grocery-ordering platforms, these kiranas have seen a steady drop in business despite being a trusted channel for customers for years. In addition, the well-organized glow of modern retail has been gaining consumer attention with attractive discounts and a diverse product range. So, where do people like Krishna head from here, and what steps can they take to bring the loyal customers back to their stores? PepperTap found an easy and viable solution for them with its unique business model.

Digital makeover to make a remarkable difference

Based on a franchisee-owned, franchisee-operated (FOFO) model, PepperTap set out on a mission to get these kirana stores back to the spotlight by giving them a facelift, optimal product availability, better pricing, and substantial profitability. The motto was to empower the store owners to the extent that they can thrive despite the challenges of modern retail stores.

With an eye on leveraging the wide network of such stores, PepperTap teams up with their entrepreneurial owners and assists them in stepping up their game. The stores become their franchise model partners, who invest a basic amount to renovate the store and optimize inventory and product mix. Besides renovation, PepperTap collaborates with the store owners on digitizing the entire operation, often for the first time.

Instead of the stores having to procure their stocks from a chain of middlemen, often resulting in inconsistent availability of products and no scope for discounts, PepperTap directly procures from brands and supplies to the store owners. Retailers get better prices and margins along with optimized inventory mix and amount. On the other hand, consumers get the best of both — a wider variety of products and attractive pricing, along with  digitized receipts instead of handwritten bills.  

Cracking the online delivery code

Enabling online orders and home delivery makes a significant difference to the retailers as a strong value add to its captive customers. PepperTap has successfully empowered partner stores to create virtual catalogue and manage the entire end to end process, tapping a large opportunity with a holistic approach. This has increased sales for the store owners, implying a considerable hike in their income.  

Spreading wings, one store at a time

Having started on a small scale in Delhi NCR, PepperTap was able to overcome the challenges brought by pandemic and scaled to more than 300 stores (as of January 2022). It has successfully got the consumers back to their trusted neighborhood stores and empowered the kiranas to build on their strengths. Some of PepperTap’s achievements include:

• More than 80% increase in gross merchandising value (GMV) on a per store level
• Order frequency growth by 20%+
• With 52% of the partner retailers having used financial coping mechanisms during the pandemic, PepperTap positively impacts  the lowest rung of kirana stores
  

Kirana stores account for a major share of the SME sector, and any difference in their upliftment and income will have a direct impact on the country’s GDP. Navneet Singh, the founder of PepperTap, and his team are doing an incredible job in transforming this market and have scaled rapidly. The model can be a winner in multiple aspects, especially in terms of tangible benefits for small kirana business owners and end consumers in a capital-efficient way. We believe PepperTap’s mission to give wings to such stores will bring a positive change in streamlining and restructuring the sector.