In November 2019, I embarked on an ambitious journey with the Next Billion B2B Ordering Project aimed at transforming the traditional retail landscape in Asia. Our vision was to empower the millions of small retailers that drive the largest FMCG channel in the continent. This project was not just another job for me; it was a mission to make a significant impact in the market, which I believed in wholeheartedly.
Traditional retail in Asia is an enormous market, accounting for 70 to 90% of total FMCG sales, with approximately 17 million shops generating a staggering $257 billion in annual turnover. Despite these impressive numbers, the traditional retail sector faces enormous challenges, particularly in reaching the “last mile.” Before our project, insights on planning were not only expensive and slow but also inaccurately reflected the needs and dynamics at the grassroots level. The data was outdated, distribution systems were fragmented, and the unit economics simply did not add up.
The Next Billion initiative aimed to address these challenges by introducing an asset-light digital ordering and finance platform. Our solution was designed to connect traditional retail shops directly with FMCG distributors, promote brands directly to last-mile shops, aggregate orders, streamline delivery routes, extend affordable product credit to shops, and unlock critical retail insights.
Location of some onboarded shops
Our unique approach offered comprehensive solutions to several problems:
- Visibility and Transparency: We ensured that every stakeholder had complete visibility of stock movements and channel inventory.
- Demand-led Ordering and Fulfillment: Our system allowed orders to be generated directly by retailers, ensuring that every order was genuine and necessary.
- Efficient Deliveries: We shifted from a typical 4-7 day delivery window to next-day deliveries, significantly enhancing efficiency and satisfaction among shop owners.
Over the six months of our pilot, from November 2019 to June 2020, we achieved remarkable milestones. We onboarded 1,735 shops, processed 2,293 orders, and successfully completed 2,089 deliveries. The platform generated a total revenue of USD 120,000, with an average basket size of USD 60. These figures were a testament to the potential and impact of our project.
However, despite the success, we also encountered significant challenges. We learned that only 18% of shopkeepers had smartphones, and those who did used them primarily for social purposes rather than business. The reluctance to adopt online ordering, combined with the complexities of managing cash flows when ordering from a single platform, highlighted the need for a more tailored approach to digital transformation in traditional retail settings.
As we planned to scale up and optimize our operations, the COVID-19 pandemic hit globally. The unprecedented challenges posed by the pandemic forced us to pull the plug on this promising project in June 2020. Among the planned pivots that we couldn’t implement were:
Launching a WhatsApp/IMO based ordering model to make it easier for shopkeepers to place orders.
Partnering with wholesalers as fulfillment partners to reduce cash flow burdens and improve delivery times.
Introducing credit facilities for shopkeepers in partnership with banks and financial institutions.
Expanding our partnerships with FMCG companies to enhance promotional offers available to shopkeepers.
The decision to end the project was a difficult one, but it was necessary given the circumstances. The learnings from this experience, however, are invaluable. They not only reflect the complexities of transforming traditional retail markets but also highlight the resilience and adaptability required to innovate in challenging environments.
As I reflect on this journey, I am proud of the work we did and the progress we made. The Next Billion B2B Ordering Project may have ended, but the insights and experiences gained will undoubtedly fuel future endeavors aimed at empowering small retailers across emerging markets. The mission to revolutionize traditional retail continues, and I remain committed to contributing to this transformation, leveraging the lessons learned from this profound experience.
Author: RASHEDUN NABI
