This tech platform offers to organize the commerce of a location and assists the sellers and buyers in Tier 2 and 3 cities of India to establish connections on a Local Commerce ecosystem (L-commerce).
Case Study: KV Pai and Sons, Udupi, Karnataka
For 120-year-old grocery store, KV Pai and Sons in Udupi, Karnataka, the pandemic changed everything. According to its owner, Ajesh Pai, who inherited the business from his father, for the first-time he had to rethink his business strategy and realized it was time to go digital.
For millions of homes, local kirana stores like Pai &Sons’ ability to adapt saved the day. This store owner maintained a near-steady supply of daily items and ensured that people were not devoid of essential commodities in the midst of the outbreak.
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While this episode displayed the resilience of small grocery stores, it also renewed the trust of consumers in the shops in their colonies, societies, and communities. Ajesh says having established immense trust in the community for over a century, he was clear about not diluting the core values of the business even after going digital and losing trust from his existing customers.
While he had a choice to look at several top players digitizing small businesses, he joined eSamudaay, which claims to be the world’s first local commerce (L-commerce) platform, because he was particular about choosing a digital platform that is purely community focused and one that serves the local customers.
Today, like K V Pai & Sons, eSamudaay’s Udupi platform has been helping over 50 such local businesses go digital. It has so far launched grocery services, restaurant food deliveries, and is looking to launch farm products and pharmacy services on its Udupi exclusive app.
Decentralization of the Kiranas
This case reveals the grassroot level problems that kirana stores all over India faced during the pandemic, especially in local community marketplaces in Tier 2 and 3 cities of India. COVID has placed the need for digital transformation for small businesses, especially since it has triggered an acceleration in consumer buying to migrate to large digital platforms.
The Tech Panda spoke to Anup Pai, Founder and CEO of eSamudaay, to find out how decentralization can help with India´s ecommerce in Tier 2 and 3 cities.
The need is for a Local Digital Operator, a local entity who takes on the mandate of organizing the commerce of a location and assists the participants (sellers and buyers) to establish connections on a L-commerce ecosystem
“There are many SMBTech and KiranaTech products that enable each individual business to digitize their internal processes. However, the local marketplace, i.e., the collection of all sellers and buyers in a local area, is a missing piece for these businesses to successfully migrate their businesses to the online world,” he says.
“The need is for a Local Digital Operator, a local entity who takes on the mandate of organizing the commerce of a location and assists the participants (sellers and buyers) to establish connections on a L-commerce ecosystem,” he adds.
Why Emerging Countries like India Need to Decentralize their Ecommerce
World over, small businesses are hurt by monopoly players, and experts are pushing for decentralization of ecommerce to empower SMBs and protect data. An L-commerce model like eSamudaay provides a huge opportunity for commerce within and between communities, empowers small producers, and promotes local innovations.
“While the current e-commerce narrative is dominated by large conglomerates, models like eSamudaay can be pivotal in enabling decentralized, self-governed digital marketplaces, benefitting every stakeholder in the ecosystem,” explains Pai.
While the current e-commerce narrative is dominated by large conglomerates, models like eSamudaay can be pivotal in enabling decentralized, self-governed digital marketplaces, benefitting every stakeholder in the ecosystem
While the need for decentralization is being felt globally, he explains that eSamudaay has chosen to focus their attention on India because of some key characteristics. There is a visible rise in demand for self-employment and entrepreneurship opportunities, especially among the youth in non-metro areas. eSamudaay provides a ´Business in a Box´ solution, which enables the creation of L-commerce entities or Decentralized Autonomous Organizations DAOs.
“Decentralization is also a good solution to ensure that the data assets (arguably the most value-driving asset of the digitization process) are also held in local ownership, therefore, creating an opportunity for local communities to benefit from the value extraction from the data assets,” he says.
Also, small businesses are looking for solutions to help them compete and stay relevant in the digital age. India’s trade is still predominantly (80%+) conducted through local sellers and producers.
“Decentralization led models can not only solve the above needs but also provide a happy win-win situation since the need for one is the solution for the other and vice versa,” he explains.
Decentralization of eCommerce Can Be a Game Changer
eSamudaay is aiming at building independent ecommerce marketplaces in Tier 2 and 3 cities and towns of India that will be completely owned by the local community. At a time when data privacy is of the highest concern, decentralization of ecommerce can be a game changer and challenge the existing monopoly.
The platform takes a holistic approach to migrating local business to the digital world. The L-commerce (Networked Decentralized Autonomous Organization) model is to create an environment for all the sellers and producers of a town to adopt a common, locally run digital marketplace. The L-commerce entity established in the local area provides the technology, cataloguing assistance, marketing, order management, logistics, and marketplace management services.
The idea is to decentralize eCommerce and build a network of local entrepreneurs who will run small, independent, and sustainable digital ecosystems/marketplaces at the local and even hyper-local level
“Through the efforts of the L-commerce entity, a digital equivalent of the town’s physical marketplace emerges, which can be used by the buyers to discover and consume local products and services. The other benefit of this decentralized model is the creation of a data asset whose ownership is local,” Pai explains.
The L-commerce entities will be set-up and operated by aspiring digital entrepreneurs who wish to set-up businesses in their hometowns.
“The idea is to decentralize eCommerce and build a network of local entrepreneurs who will run small, independent, and sustainable digital ecosystems/marketplaces at the local and even hyper-local level,” he adds.
The platform provides local entrepreneurs, producers, delivery agents with all the digital tools necessary to be able to run multi-seller, multi-category digital marketplaces in their community. Each L-commerce will also have its own super app, which will bring together producers and consumers and promote ecommerce within the community.
The super app will offer products and services that are both available and needed in the community, ranging from groceries, kitchen supplies, apparels, services like food, health and wellness, mobility services, home-services, etc. eSamudaay’s L-commerce platform will help local businesses and home-producers get prominent online visibility.
The eSamudaay Edge
Decentralization is a paradigm that will transform societies and economies. Pai says that it´s picking up speed given the availability of three forces, entrepreneurship, SaaS and Cloud, and decentralization of finance.
“eSamudaay is the world’s first SaaS solution that enables DAOs to be rapidly created for L-commerce and provides a collaborative network-based environment for these entities to expand their business,” he says.
“A local entrepreneur with eSamudaay’s digital tools will be able to fully own the L-commerce platform in his community and on-board sellers onto the platforms,” he adds.
Not ´Our Platform´ But ´Their Circle´
Any new concept or business faces resistance till credibility and trust are established. Participants need to know that the model is indeed ´good for all´. However, local traders are usually reluctant and distrusting of a new technology solution. Pai says though they too faced some reluctance, they were able to win that trust.
We consciously underscore the point that this is not ´our platform´ but, instead, it is ´their circle´
“This is overcome through the local touch, since the business providing the solution is domiciled locally, and the producer-first mindset that we have developed at eSamudaay. eSamudaay’s core beliefs of local-first and producer-first are rooted in the philosophy that if local products and producers are preferred by local buyers, they will grow, therefore resulting in resilience and sustainability in the economy,” he explains.
The platform has created circles, which are logical units within the platform denoting a DAO or an L-commerce entity.
“We consciously underscore the point that this is not ´our platform´ but, instead, it is ´their circle´,” he emphasizes.
In the next 12 months, eSamudaay will set up 2000 local commerce platforms across India, including towns like Mangalore, Tirupathi, Mysore, Kohlapur, Chandigarh, Nashik, Shillong, Warangal, Patiala, Indore, and Varanasi. In the next five years, eSamudaay aims to empower over 5,000 entrepreneurs to run their own local commerce initiatives and impact 180+ million households across India.
“eSamudaay’s mission is to decentralize digital. We envision the emergence of local digital platforms and a network of DAOs, each being a locally owned company operating a local digital marketplace for the benefit of the local community,” says Pai.