5 M Low-Income Households in India will Order Online Goods Soon #Snapdeal #FINO

Snapdeal, one of India’s largest e-tailers, is poised to launch 5,000 e-commerce kiosks across 65 cities and 70,000 rural areas. The company plans to achieve this with the help of FINO PayTech, a company that aims to provide financial inclusion solutions in India. As reported by The Times of India (TOI), Snapdeal plans to target 50 lakh low-income households in India.

The e-commerce centers/kiosks will be managed by small scale entrepreneurs. These kiosks will be equipped with computers and tablets and would also serve as collection and delivery points. Rural consumers usually don’t have broadband access and thus, they can use these kiosks to shop online. Snapdeal is offering a portfolio of utilities to targeted customers. A FINO agent would have the following roles to play:

  • Place an order on behalf of the customer
  • Collect payment from the customer
  • Receive the order from Snapdeal and deliver to the customer

Snapdeal currently has around 3 crore (30 million) registered users. Speaking to TOI, Kunal Bahl, co-founder and CEO of Snapdeal, said: I am going into this thinking that we will be able to reach 5-10 crore new consumers in the next three years. The pilot program run so far on these revealed that the average ticket size of purchases by rural customers is comparable to that of urban customers. It is Rs 1,400 compared to Rs 2,000 from urban areas added Bahl. (1 USD = INR 60)

Rishi Gupta, Executive Director and COO of FINO PayTech, told TOI: 'This channel has great potential. For instance, we call people from Dharavi the HNIs (high net worth individuals) of slums.' There is an ongoing race in India for e-commerce supremacy. Snapdeal isn’t the only one looking to target the rural customer segment. Amazon India is in talks with the government to improve the Indian Postal national delivery service. Flipkart is also in talks with the government to roll out better delivery services in rural areas.

Snapdeal recently raised $627 million from Softbank. It will use the fresh funds to enhance supply chain activities. As per Gartner, India’s ecommerce market is expected to touch $6 billion in 2015. The number of online shoppers is expected to touch 40 million in the next two years.