ShopX is an online business engaged more in the B2B space by providing a platform to link buyers and sellers. It focuses its efforts on the smaller sized merchants and assists them in making direct purchases from manufacturers and selling to their customers. The startup has just received a fresh round of fund infusion from a Hong Kong based company Fung Strategic Holdings Limited (“FSH”). The amount invested is $35 million. The Fung Group itself has interests in the supply chain segment particularly in consumer goods and it operates on the global platform.
The Bengaluru headquartered 3-year old company ShopX claims it is expanding its ecommerce model to “India II”. The significance of their model is that traders whose turnover may not be very high can utilize this digital platform to access branded products from their sources and cut down on the middlemen, thereby saving on the cost of purchase. Technology is at the forefront of this B2B ecommerce model.
The Indian retail market has a lopsided structure at the moment. While the figure of $700 billion dollars is being quoted as the country’s annual consumption figure, organized retail or modern trade as it is called, constitutes less than 10% of the overall business and online trade to retail customers is a dismal 2% only. And most of the 12 million small merchants who contribute to 90% of the retail trade in terms of value are the ones at the mercy of the distributors in large FMCG and other consumer products companies. And supply chain has been the bane of the country’s commodity sector for decades.
ShopX now has this great opportunity to rectify this situation by providing a digital platform for these small merchants to access goods and services, otherwise not feasible in the conventional ecosystem. Its teams work with both ends of the spectrum; the manufacturers of leading brands as well as the ones making the purchases, the small traders and consumers. The requirement in an online model is for both sides to have a digital highway with the backbone and infrastructure in place to handle the entire process, beginning with the demand being raised and then the actual purchase, payment and delivery. The technology that ShopX has developed comes to the fore in establishing this digital market so that the transactions could be carried on seamlessly.
The startup had received $18 million funding from Nandan Nilekani in its startup days and apart from making the financial investment, Nilekani has been quite active in mentoring the promoters Amit Sharma and Apoorva, which is cherished by both even now.
Nandan Nilekani and the new investors, The Fung Group have also commended the work done by ShopX so far and see a great future for them. It is understood that the association with the Hong Kong-based company will extend to cooperation in areas like supply chain orchestration, global sourcing, introduction to new brands and overall retail distribution.
In terms of numbers, ShopX has around 50,000 retailers on board and is able to cover around 300 towns and cities. The overall transaction value of Rs 500 crores has been recorded on its platform. The funds now inducted will be used to expand this base to add lakhs of merchants more onto the ShopX platform.