Neighbourhood offline stores or Kiranas are a crucial piece of the $1.2 Trillion (2021F) Indian Retail pie and thus, digitising such “Dukaans” is increasingly a key focus of technology upstarts in cracking the Middle India or Bharat market.
As part of our series on the Bharat Retail ecosystem, we interviewed Sonakshi Nathani, Co-founder and CEO of Bikayi.
Bikayi is a Y Combinator funded SaaS platform enabling small and medium merchants to go online and conduct commerce through WhatsApp. Founded in mid-2019, the company has been a pioneer of the Bharat store digitisation sector. Competing with a varied and powerful set of competitors including Shopify, Jiomart, and Dukaan, has given Sonakshi a crucial bird’s-eye view of the Bharat retail landscape.
We recommend that you read our Shopify For Bharat article before getting into this week’s main piece. In it, we take a deep dive into how platforms like Bikayi and Dukaan are facilitating small-businesses in going online and explore their varied product strategies.
We also take a closer view into Clubhouse, explore the concept of High Agency, and understand the science behind SpaceX. Let’s dive in!
Interviewing Sonakshi Nathani, CEO & Co-founder of Bikayi
*Edited excerpts from the interview
TSI: What is Bikayi’s problem statement and how did you discover it? Tell us about your broad vision.
Sonakshi: I and my Co-Founder had both quit our jobs in end-2018. We wanted to do something of our own but had no ideas on where to start. That’s when I started closely observing my family’s grocery store in Raipur. Around the same time, the store had started transacting over WhatsApp – our customers used to send the list of items they wanted to order on WhatsApp and we were then sending those orders to the customer’s doorstep. I realised that more than 50% of the store-staff’s time was going into processing the orders and reconciling inventory and books.
So, I had a discussion with Ashutosh (Ashutosh Singla, Bikayi’s Co-Founder and CTO), and then we both started looking for solutions to help my family’s store. Looking for some ready solutions we came across Shopify and even a few Indian solutions like Instamojo that also had store creation features. But none of the solutions was suitable because my family only knew how to operate WhatsApp, YouTube etc. and that was the entirety of the internet for them. We wanted something much simpler that could be directly operated through a phone. So that’s when we decided to build a solution ourselves and launched the first version of Bikayi on 1st April 2019.
TSI: What was your game plan at the outset and how did you go about reaching product-market fit?
Sonakshi: Post-launch we not only gave the app to my family’s store but also started distributing the app link over Facebook groups like Mumbai and Delhi wholesale groups. During our research phase on the SMB space, we found that most of these groups had a tremendous level of commerce activity. For example, every few seconds there would be a commerce post saying “I’m selling a Saree and this is my WhatsApp number”. So, we started posting Bikayi’s link on such groups, promising a WhatsApp-based solution for increasing sales and each of those posts would get us 300-400 organic downloads (300-400 new stores). We realised that my family store’s problem was actually quite widespread, and after that point, we never really had to plan on what features to build next.
Our first version was really basic; just download Bikayi, upload product pictures, and you get a link. That link is basically just a simple name, store catalogue where the store customers can place orders and that's it! After that, the customers started coming to us requesting specific features like reports and advanced analysis. So, our product roadmap was always coming in from the customers. Eventually, after two months we realised that if customers were so keen on suggesting features, they might also be willing to pay for them. Until then we only had a basic free plan, and then we decided to move to a freemium model with a paid plan for advanced features like branding. I would say that worked really well for us because we got 50+ paid subscriptions in the first month itself. I consider that a huge milestone for us since we discovered that SMBs were keen on paying for this product, even organically. And that’s how we essentially built conviction on our SaaS product thesis.
TSI: We have recently seen a lot of online commerce traction in the lower-tier Indian cities or the Middle India. What has been your experience with such cities in terms of both perception and customer adoption?
Sonakshi: In terms of how the product (Bikayi) is being perceived, it is quite different in a Tier 1 and Tier 2 city versus a Tier 3 and Tier 4 city. Basically, in Tier 1 and 2 cities, people are now starting their own brands, for example, people selling homemade chutneys or having an offline store for jewellery etc. They are coming online and setting up their brand stores. But in Tier 3 and 4 cities the trend is quite different, for example, a young 23-year-old guy who knows that his father runs a grocery store or neighbourhood uncle runs a grocery store, may just create an online store on the platform and takes supplies from the local nearby sellers. The person would know how to digitally market the store and operate online. Such people aspire to become the Swiggy or BigBasket (aggregators/resellers) of their town. So, in smaller cities we have such aspiration-based resellers/store owners coming online and in bigger cities, we have brands or people selling their own supply.
TSI: In terms of merchants, there can be two categories: formal established offline businesses going online and new online-first entrepreneurs. One would think that passion entrepreneurs like home bakers would also have a particular affinity towards Bikayi. What kind of merchants have you seen onboarding on the platform?
Sonakshi: I would say that this has evolved quite a bit. Pre-COVID it was just the formal and already established businesses coming online who were transacting over WhatsApp and thought that it was getting difficult to manage WhatsApp orders.
After COVID-19 hit, we started seeing some innovations. For example, there is this guy from Bangalore who was running a chain of restaurants but COVID created problems for his chain. He used to source his own raw materials from his farmhouse, so he started a grocery store via Bikayi where he is selling organic atta etc. This became an additional business for him and now he is in no mood to stop because he is getting significant business from this channel. And similarly, during COVID, we saw these aspirational and passionate young entrepreneurs coming up from Tier 3 and 4 cities, starting-up new online businesses. Today, I would say our customer-base is equally divided between established formal businesses and new passion entrepreneurs.
TSI: What categories of products/services have you seen work well on the platform, and what are the laggards?
Sonakshi: This has varied a lot in the past couple of years because of COVID-19 and because SMB businesses can be quite seasonal. Pre-COVID, fashion and electronics stores were doing really well and were the top categories on Bikayi. Once COVID hit, groceries, restaurants, and home cooks became top categories. And now gradually fashion is again emerging as a top category with even wholesalers and big retailers doing really well. So, I would say Bikayi is quite category agnostic, it provides all the tools to enable your online store, and if you know digital marketing and selling, you can succeed on Bikayi.
TSI: We have seen that Bikayi invests a lot in video content generation. What role has content marketing played in your growth journey?
Sonakshi: Customer support is very important for us and a big part of that is generating trust in our brand. Until around July 2020, I and my co-founder were both doing a lot of the customer support calls ourselves. Apart from maintaining trust, we also got loads of customer insights and never wanted to miss those. But once we crossed 500-600 daily calls, just doing it ourselves wasn’t feasible anymore. So that’s when I realised that I could just create a video or go live and interact directly with the customers on a large scale. This is especially important for SMB customers who need to understand who’s running the company before they can trust it. So yes, I would say creating such content has helped us a lot but we need to do a lot more on that front in the future.
TSI: Bikayi is one of the very few players in this industry who are providing paid premium plans, and basically operating on a SaaS freemium model. Similar products from other major competitors like Dukaan are still completely free. What made you choose this direction?
Sonakshi: I believe that for any online store to succeed, they will have to convey their own brand and that comes with a cost. And if we start giving our product for free, financed through whatever money we have in the bank, then we start facing a negative perception among the SMB merchants. For our free offering, merchants have actually asked us why the product is free and if there is anything wrong with it. Such negative perception starts creeping in when you keep a utility SaaS product free. We have experienced such negative quality perception even when keeping low prices for our product.
Another reason for a paid plan is the way we want to build our company. When a merchant invests even a single rupee in your product, you have a certain responsibility towards the merchant to serve them best. And we do feel that this is the best way for us to focus on merchant outcomes.
TSI: Given that your primary market is the Bharat consumer, vernacular would surely be a huge component of your product journey. But we’ve seen that implementing vernacular is much harder than it sounds. What challenges have you faced while implementing vernacular support?
Sonakshi: Yes, there are quite a few challenges. From a product perspective, once you do the language conversion into the 7-8 languages that you have chosen, then maintaining that language as the app keeps on evolving is incredibly challenging. So, I would say maintaining that level of language perfection and coverage requires a lot of resources. This is particularly challenging in the early stages when we don’t have vast teams to do such functions full-time.
Another challenge that we face is on the customer support side. Roughly 70-80% of our support calls are in Hindi, but then there are numerous cases in which we have to deal with other local languages that our team is not well-versed in. But over time, we have built a good and well-balanced support team to deal with these issues.
TSI: The competitive landscape for the entire merchant digitisation platform space has been heating up tremendously. What are your thoughts on the broad market and Bikayi’s positioning in this competitive space?
Sonakshi: I would say that our primary competition is with the players providing full-suite solutions like Shopify, as opposed to those providing simple functionality apps. And in terms of that, since Shopify and other major platform solutions are not India tailored, I believe that it is a big positive point for us to have a better penetration in India. And by the way, not just India, because we are now getting merchants from other developing countries as well. So, I would say SMBs, who don’t have access to a laptop but require a full-fledged e-commerce store through mobile, comprise our target market. Small merchants today are actively demanding a full-set of features instead of just 1-2 simple functionalities, but they need them on mobile.
TSI: What are your broad thoughts on the future of online commerce in India?
Sonakshi: I feel like entrepreneurship will grow a lot in terms of starting and running online stores. For offline stores, I feel that they would increasingly come about after companies find initial success in the online domain. But the main theme for me would be entrepreneurs sourcing from local suppliers and wholesalers and selling online. Young people who are quite familiar with social media tools will start taking on such type of commerce rapidly. So just like how dropshipping grew in the US, sourcing from China, I think India is going to see a big future in sourcing from local suppliers.
Your Thoughts?
Have any questions or thoughts? Connect with us in the comments section or by dropping us an email!
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That's all for this edition! We hope you liked it and would love to get any feedback you may have. This newsletter is written and curated by Mishaal Nathani and Ashutosh Gehlot.
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