A M I T S H A R M A CO-FOUNDER & CEO, SHOPX

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Cover story ShopX

SHOPX is a young and fast growing team that is successfully building a new USD 50 billion e-commerce model for India and beyond. Launched in 2015 by Amit Sharma and Apoorva Jois, SHOPX enables retailers and their consumers with a path breaking tech platform which combines B2B and B2B2C use cases. Here is their success story.

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Cover story ShopX

AAt a time when everyone was thinking about B2C in e-commerce, Amit Sharma and Apoorva Jois, co-

founders of SHOPX thought about a game changing B2B2C model. They realized that there was a need to organize the massive USD 700 billion unorganized retail space in India as well as the requirement for a well designed technology and business platform for small merchants and retailers. Hence, SHOPX was incepted with the aim to digitize systems for small merchants and retailers – it was an idea to create something akin to an Uber model for retail – a shared economy platform utilizing the pre-existing infrastructure. Today, the business is reaching a billion dollar scale with a clear path to profitability. Read on for the fascinating SHOPX story.

CAPITALIZING ON TECHNOLOGYLaunched in 2015 by Amit Sharma and Apoorva Jois, SHOPX enables retailers to offer their products and services to customers by listing them, along with daily deals, on its platform. Contrary to an asset-heavy approach, the start-up focuses on a ‘digital offline’ approach using a proprietary technology platform. SHOPX also offers digital services, including mobile and DTH recharge, bus or flight bookings, and utility bill payments. When launched, as is the norm with many start-ups, they faced initial teething troubles such as friction in the market and resistance from brands as well as the ecosystem.

As to which model would work best wasn’t clear till SHOPX discovered it through a lot of experimentation and quick, iterative learning. Most importantly, the problem they were trying to address had no precedents globally. It was uniquely Indian. But with the sheer dint of investing deep faith in their business approach,

capital for discounting, etc.”

GROWTH PLANSTalking about the best performing markets for SHOPX, Sharma shares, “The southern and eastern regions of the country along with Delhi continue to be high growth markets for us. Our roadmap is to continue to grow into newer markets and aim to get higher percentage of retailers across India to transact and use the benefits of

our platform and technology. We continue to bring new products and categories to the platform to ensure that all the needs of retailers are fulfilled from one interface.” As for the next trigger of growth for SHOPX, Sharma says, “We are focused on digital growth enabled by deep technology rather than human dependence, strong unit economics and clear path to profitability, and a negative working capital growth model which allows

us to scale seamlessly.”SHOPX now has a presence in

northern and eastern regions of the country too. SHOPX hosts over 50,000 transactions per day on its platform and is capable of carrying out 5 lakh transactions a day. It has grown 10 times in the last 18 months, doing more than 600 million dollars of annualized GMV. SHOPX has added more than 15,000 retailers every month, making it the fastest growing retail network in the country.

1.25 lakh retailers

8million customers

350 towns

500 brands

USD 650million annualized GMV

SHOPX not only mitigated those problems but also embarked on an ambitious mission to empower one million retailers and thereby enable 400 million middle-income Indians to reap the benefits of online commerce. Their state-of-the-art technology can manage over 5,00,000 transactions per day and powers a deeply integrated supply chain.

“Through SHOPX we are building a sustainable technological infrastructure for commerce which is accessible to people beyond Tier I India and digitally connects mom-and-pop stores to all brands, making SHOPX an e-commerce platform which is inclusive of a wide range of products in different categories and verticals. Using a sophisticated technology platform, SHOPX gives small retailers access to a wide range of products by maintaining a virtual inventory and eliminating the requirement of physical storage. SHOPX leverages the unorganised logistics sector to take the goods to remote areas and enhance connectivity. It makes this retail technology accessible to everyone through localisation, customisation and personalisation and converts small retailers from traditional ‘kirana’ stores to digital hubs for ordering, delivering, returns and customer service,” Sharma explains.

REVENUE MODELSHOPX earns revenues and margins from wholesale buying, marketplace commissions, brand tie-ups, digital services and exclusive distribution in certain cities. SHOPX also earn revenues by providing exclusive value-added services to brands. This allows it to pass maximum benefits of price to the retailer, thus allowing for him or her to be competitive and relevant in the market while providing the convenience of doorstep delivery and ordering quantities as needed. “Our current annualised GMV run rate is USD 650 million. We have grown 10 times over the previous year. We aim to end the year surpassing the USD 1 billion dollar run rate,” Sharma informs.

INVESTMENTThe first round of USD 35 million was received by SHOPX in August 2018 while it has recently received its final tranche. The entire USD 35 million, approximately Rs 241.77 crore, was poured in by Fung Group’s investment arm, FSX – Li and Fung. Prior to this round, the company had raised more than USD 50 million in multiple funding rounds from investors such as Nandan Nilekani. Talking about landing the funding from Nilekani, Sharma, says, “The vision we had for the company was aligned to his vision too, thus resulting in attracting his interest. Nilekani shared the belief that retail modernisation will happen through small format retailers across the country rather than e-commerce or modern trade.”

ACQUIHIRE DEALSSHOPX believes in growing on a non-linear scale that is driven by technology and extreme automation. Their core team comprises 200 professionals. Recently they also acquihired omnichannel mobile phone retail brand GabbarDeals. Acquihiring, or talent acquisition, is the process of acquiring a company primarily to recruit its employees, rather than its products

“THROUGH SHOPX

WE ARE BUILDING

THE BUSINESS

AND TECHNOLOGY

INFRASTRUCTURE

THAT BRINGS

DIGITAL RETAIL

TO THE NEXT

400 MILLION

CONSUMERS

THROUGH 10

MILLION SMALL

MERCHANTS”

Amit Sharma, co-founder & CEO, ShopX

or services. Elaborating on their plans, Sharma says, “We are talking to 3-4 players at this point and have an active interest in acquihires and partnerships.” Unveiling the secret behind their entrepreneurial success, Sharma says, “Credit must go to the use of extreme engineering and automation in everything we do. We pursue efficiency incessantly in every aspect of the business. Every penny counts. B2B is not like B2C and we don’t believe in spending a lot of