The team at UniRetail Consumer Brands that runs the OneRetail app, was ready to give in to the lockdown. They were mentally preparing for at least two months of lackadaisical business when it was announced in late March 2020.
But the app, which allows retailers to source supplies and brands/ distributors/super stockists to track goods flow, had a sourcing partner who had proactively procured permissions required to supply essential goods during the lockdown. So when Zomato Market decided to pilot in Tamil Nadu, OneRetail was eligible and ready. It became the exclusive supplier to the food delivery brand’s grocery delivery offering for the first three days. It’s been 10 days now. In this short period, it also became the chosen supplier for the rest of Tamil Nadu for a charity, that works through NGOs to feed migrant workers in need.
OneRetail had over 400 retailers on board and only a handful of FMCG brands before the Covid-19 crisis hit. Since then, the company has supplied 150 tonnes of essential foodgrains for the charity and is doing Rs. 15,000 to Rs.20,000 of business per day through Zomato Market. Besides, around 50 of its existing retailers are also active and being serviced with a minimum order value of Rs. 25,000 to 30,000 per retailer each week. The only flipside to all this the founders rue is being unable to service more retailers because of the sudden spurt in business and unavailability of manpower, which will see UniRetail’s billing touch Rs.1 crore in a month for the first time since its launch in mid-2019.
One clincher has been the pricing OneRetail has been able to offer in a time of unprecedented demand and uncertainty. The synergies between a sourcing partner who had never explored the app/online route and OneRetail has obviously been the other.
“Our whole model is built on eliminating middlemen. At the start of the lockdown, a lot of wholesale traders started hoarding and increasing prices like crazy. We were getting the essentials like rice at source, so we had some leverage on price. For items like dal also, where the market was supplying at Rs.120 a kilogram, we were able to give it at Rs.108. Slowly, because of hoarding and unavailability, we started getting calls from others. Over the last three or four days, things have stabilised since the uncertainty of operating procedures in the early part of the lockdown,” explains Ashwin Prasad, Founder of UniRetail Consumer Brands.
OneRetail stuck to vegetables (and fruits) and essential pulses and this helped in the first few days of the lockdown, notes Ashwin. The demand is still for essentials though other items like ready-to-eat breakfast cereals are getting added on to retailers’ carts now.
“We never thought we’d come to this stage this early. The whole space of direct-to-market, with zero chaos in the supply chain, is in a good place in this crisis. Even investor interest has gone up,” he adds.
OneRetail’s app has become busy and so has its call centre, which wasn’t getting too much traction earlier. Some promotions via an SMS campaign to a database of over 3000 retailers resulted after realising that most of the addressable kirana shop owners were still using ‘bar’ (feature) phones.
“We never marketed the number earlier because we wanted it to be app-only. But the segment we are addressing demands that we have call-based orders too,” notes the founder in his mid-’20s, for whom digital-only would have seemed like a no-brainer.
In Chennai, two (cloud) stores are now live, one in Maduravoyal and the other in Vadapalani. Another on Old Mahabalipuram Road is on the cards. Staff are working long hours to ensure the demand is met. But those who chose to stay home have been given the option to take off during the lockdown. Ashwin and co-founder Venkata Gorbhachev are back in their hometown of Coimbatore, where there is another cloud store. They were persuaded by their parents to return before the lockdown.
Managing things remotely is not so much of a problem for the founding duo as is handling calls to the toll free number – several of them are meant for the entity that held the number before UniRetail.
Besides the 150 tonnes already supplied for distribution to migrant workers through NGOs, more such orders are expected to come OneRetail’s way. Ashwin is hoping to close another few hundred tonnes through this route. Ask him about the orders for charity and he admits that the margins are far less.
“We would be working on about 5 per cent as gross margin on the charity supplies, and almost all of that would go to the packaging team – re-packaging is a huge challenge. We don’t want to look at the margins on that part of the business at this point in time. It is something we can enable and it is the need of the hour. As long as it pays costs, we have nothing to lose. If I have to look at the positives, it strengthens my leverage on the buying side,” surmises Ashwin.
Also read: Mission OneRetail