This billion dollar Indian startup is revolutionising rural markets in India
65% of India lives in villages & most of it is underserved.
Here’s how ElasticRun is changing this. A thread🧵
65% of India lives in villages & most of it is underserved.
Here’s how ElasticRun is changing this. A thread🧵
What is ElasticRun?
ElasticRun is a B2B e-Commerce platform for rural India which extends the distribution arm of any brand, to the rural markets.
ElasticRun is a B2B e-Commerce platform for rural India which extends the distribution arm of any brand, to the rural markets.
They partnered up with leading brands like- Britannia, Coca-Cola, TATA Consumer, Dabur, P&G, Pidilite etc. along with more than 500k retail stores.
There are approximately 13 million Kirana stores in India.
And a majority of these stores tend to fall in rural areas...
And a majority of these stores tend to fall in rural areas...
Even though Kirana stores play a crucial role in the retail sector, they have always struggled to compete with organized modern retail sector.
Also, the last-mile delivery is a big hurdle for large brands when it came to reaching the rural markets.
Last-mile delivery costs are substantial, so it becomes really difficult to penetrate the distant rural areas at an optimal cost.
And that’s where ElasticRun comes into the picture. (Being quite true to it's name)
And that’s where ElasticRun comes into the picture. (Being quite true to it's name)
ElasticRun uses a network of local Kirana stores for distribution, small warehouses for storage and sorting, and unused capacity in the trucking ecosystem for transportation.
Once they had the supply chain infrastructure in-place, they aggregated FMGC brands which lacked the reach and distribution network into deep rural areas.
Essentially giving these brands a whole new market to dig in.
Essentially giving these brands a whole new market to dig in.
The rural channel is a fulfilment-first network.
That means discounts do not matter much as the ticket size is low.
The only thing that matters in this market is the availability of products at the right time and cost.
That means discounts do not matter much as the ticket size is low.
The only thing that matters in this market is the availability of products at the right time and cost.
This is one of the primary reasons why ElaticRun’s solution is gaining traction.
ElasticRun's whole algorithm is based on maximizing the potential of existing resources.
They are just leveraging the already built-up network of rural retail stores.
But this simple yet effective solution comes with it's own set of challenges:
They are just leveraging the already built-up network of rural retail stores.
But this simple yet effective solution comes with it's own set of challenges:
As India continues to move towards urbanization, the shift from villages to towns and cities increases.
Where the presence of platforms like Meesho, JioMart, BigBasket, and Blinkit etc. is a threat to Kirana stores' relevance.
Where the presence of platforms like Meesho, JioMart, BigBasket, and Blinkit etc. is a threat to Kirana stores' relevance.
ElasticRun's supply chain model, in that case faces a sustainability threat if people stop going to stores themselves.
Along with that, B2B Ecommerce platforms like Udaan, LoadShare who have already set-up their network & partnered with various small & medium enterprises, and with their tech infrastructure in place, it is only a matter of time before they start going into deep rural markets.
ElasticRun recently turned into an Unicorn this February after closing a $330 million funding round led by SoftBank and Goldman Sachs at a valuation of $1.5 billion.
The company tripled it's valuation in under a year!
The company tripled it's valuation in under a year!
With stiff competition and a possibly depleting current addressable market, will ElasticRun be able to sustain their solution?
What do you think?
What do you think?
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