MyWholesaler, a tech platform for retailers

There are instances when an investor or investment platform does not approve of an idea put forward by a startup founder.

However, if the founder is confident about the idea, and firm on going ahead with the launch, there are ample chances for the startup to become a successful venture. This is the story of Pragnya Retail Private Limited, a startup idea conceived by Ashok Reddy.

Pragnya Retail has two brands under its wing, MyWholesaler, an organised tech wholesale platform and Our Store, a chain of supermarkets in Hyderabad.

Undeterred by refusal of investors to fund his venture, Ashok Reddy invested his own savings and launched his venture. Thanks to his concerted efforts, Pragnya Retail has now turned into a profit-generating company.

"We were the first one's to enter the retail space, after us seven other players with deeper pockets of Rs 10 crore investment and stronger team strength entered the market but could not sustain.

Experts advised us to follow a thumb rule to launch the startup, which we did not follow, but the seven players that did, were invisible from the market in few months period," the founder says.

With an experience of more than 20 years in the field of financial services like stock brokerage, mutual funds and life insurance companies, Ashok Reddy, in 2015, wanted to venture out on his own.

His initial idea was to come with an online grocery delivery platform like BigBasket and Grofers. While researching about the same,he realised the ground reality that venture capitalists had already marked the top players in the field and gaining financial support would be next to impossible.

Reddy adds, "90 per cent of the grocery trade happens through kirana retail stores. While customers have an option toorder groceries online, then why cannot these retail store owners.

We found out gaps in the distribution channel connecting retailers, companies and their distribution channels. A distributor does not supply products in time.

In between, if a retailer has any requirement, he has to visit wholesale markets like Metro to refill his store. Wherein stores like Walmart do not provide logistics or delivery service."

Citing the need to provide a hassle-free service for small businesses, in early 2016, Reddy launched MyWholesaler, a platform for retailers to place an order for grocery, personal care, foods, beverage etc through mobile app, relationship managers or IVR (interactive voice response) system.

Their technology has three segments under the Enterprise Resource Planning (ERP), being a mobile application, inventory management, auto ordering and warehouse management.

Started with a team of two members, MyWholesaler had onboarded 1,000 retailers within six months of its inception. In the same period, the startup reached a turnover of Rs 1 crore per month and was close to reaching RoI (return on investment).

What happened next was demonetisation and GST. This disturbed their business for few months astransactions were in the form of cash and carry. "Retailers were asking for credit facility, which we could not provide.

Besides, GST also led to a setback period by a year. Circulation of cash was in short during this period.However, we took a leap of faith and became one of the first adopters of digital transactions using UPI, mPOS," the founder says.

At present, MyWholesaler has nearly 5,000 retailers, a tie-up with over 200 companies wherein Procter & Gamble being the first adopter, 2,000 products and a warehouse capacity of 20,000 sft at Nacharam in Hyderabad.

"Our competitors who entered the market to vanish within a short period, came with a marketing strategy of discount offers, but we provide best and transparent pricing every time, 100 per cent delivery on next day of the order is placed and 95 per cent fill rate.

This has helped us to move from 1,000 sft to 20,000 sft integrated warehouse, in three years," Reddystates.

By end of 2019, MyWholesaler targets to sign up 35,000 retailers out of 50,000 retailers present in the city. The founder expects 10,000 retailers from the acquired lot of retailers to transact, for which they are in the process of expanding their acquisition team.

Currently, the tech wholesaler has nine delivery teams. It plans to increase the team count to 25. Along with the picking team, Reddy plans to ramp up their entire workforce, with an aim to enter new cities.

The startup further intends to double their warehouse capacity to 45,000 sft by October 2019.

Last year, Pragnya Retail branched out into the physical space with the opening of two supermarkets, named as Our Store. In 2019, theycame with two more stores, and plan to add further two in this year.

In 2020, the company plans to open eight to nine stores. Our Store is present in Ashok Nagar, Kukatpally, Uppal and Vijayanagar Colony.

The founder informs that he leveraged on the large volume built through their B2B channel, which led to lower costsindifferent stages of their business, helping them to pass on the benefits to their Our Store customers.

Pragnya Retail raised around Rs 5 crore from an Ultra HNI in January 2018. The company reported a turnover of Rs 4 crore per month, in terms of sales.

It expects to achieve nearly Rs 15 crore by December. In FY 18-19, they recorded a revenue of Rs 30 crore and in FY 19-20 the founder is confident of crossing Rs 100 crore, with an expectation to reach Rs 180 in FY 20-21.

The startup has garnered majority of its business from their B2B platform, MyWholesaler.

"Support and trust from multinational companies, deep understanding about the retail market and an efficient startup model, are the key drivers for MyWholesaler's success," concludes Ashok Reddy.