1Mby1M Virtual Accelerator Investor Forum: With Rahul Chowdhri of Stellaris Venture Partners (Part 3)

Sramana Mitra: This was actually fascinating because we do have a very large Indian following. It’s very interesting to hear about these trends. What’s new? What’s cutting edge? So I’d love to hear more about other interesting ideas in your portfolio.

Rahul Chowdhri: Shop101 is a social commerce application. In the last few years, Facebook, Instagram, Whatsapp, and now TikTok have become very popular social media platforms in India. While there is consumer usage, you also have a lot of micro-sellers on these platforms. These include individuals sitting at home or student traders who are using these platforms to sell items.

A typical micro-seller will have a page on Facebook that shows what she is selling. Then people follow her because of her reputation. There will be a chat. Then money gets transferred into the bank account. Then the lady will walk into a local courier shop and ship the item. About more than a year ago, Facebook made about $1.5 million from such SMB pages in India alone.

In Whatsapp and Instagram, there are a lot of broadcast groups for trading. Now, these aren’t platforms designed for e-commerce. So, Shop101 provides end-to-end fully integrated interface or technology platform that makes these micro-sellers look like full-fledged e-commerce businesses.

So if you use their platform, in less than five minutes, you can create a shop of your own which will be fully integrated into a social media account with all payment interfaces available. You can choose from multiple logistic interfaces that are fully integrated and do not need to be added to your online store.

This person now doesn’t have to spend time on chat because if you’re looking at an item on Facebook, the link of the shop is there and you can use it to place an order. This particular person never had a Cash on Delivery (COD) as an option available because large courier companies will not enter into COD arrangements with individuals or small businesses. But in Shop101, you have this COD option.

On the back end, we tied up with large manufacturers in the country and made their catalog available to these micro-sellers. So, based on the followers that a micro-seller has, he or she picks up whichever item might get sold or will be liked in their follower base and promote it in their shop or on their social media handle.

This has increased the procurement capability of the micro-sellers. Micro-sellers have a relationship with the consumers. They are typically somebody you could ask a question about the product, which is not the case with Amazon or Flipkart.

This is a classic case of tech enabling Indian SMBs. They charge for the software and the logistics service that the micro seller uses.

Sramana Mitra: This is like a very small business focused offering. You prefaced earlier by saying that the business model isn’t necessarily that SMB’s are paying for the service, but you’re doing revenue sharing. That doesn’t apply to this particular company. This is one where you are charging for the software.

Rahul Chowdhri: Let’s say, Shopify charges $100 a month for their software. But here, you can decide not to use Shop101 shipping service but just use the website that Shop101 has created. You decide what you’re paying and you only pay when you’re ready or when your business has scaled.

Sramana Mitra: The revenue is transaction-based fees. You take a cut on the transactions based on what service is being used.

Well, I’m actually very curious because you will hear about a very interesting company. This is a company that is getting ready to go out to raise money. This is a company that would be interested in accessing your Shop101 body of influencers of small merchants. So this could be a very interesting opportunity for a new brand that’s selling a new product to also access the market.

Rahul Chowdhri: Now, that’s what is happening in Shop101. There are so many new brands that are coming up and they need distribution platforms. So, a large company like Unilever led their series B because this is going to be a very large channel. All the smaller brands are using this alternative distribution channels.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Rahul Chowdhri of Stellaris Venture Partners
1 2 3 4