Large number of small businesses in India face a tough competition from online players and established large format retailers. By virtue of the scale at which they operate, these large and established players have access to banks and brands to create offers targeting common consumers at shared costs.
Small businesses however operate in silos and make relatively lower margins on the product they sell as opposed to their larger counterparts.
We think that the new-age innovative fintech start-ups must focus on creating payment products that help these small merchants sell more than helping them to buy more.
However, we believe another bigger reason is that they are not clear of the benefits of digital payments, as cash is convenient and safe from their perspective. Focus on solutions which can help them use digital payments to grow their business, example by providing EMIs, or co-marketing programs, can attract them faster.
As an example, small merchants today are facing onslaught from online players who are wooing their customers with zero-cost EMIs and other offers. These merchants lack scale and hence do not get support such as zero-cost EMI’s or cashbacks from the brands or better negotiation rates from their partner banks. However, there are a lot of companies who are keen on lending to them.
The real issue is a product-market gap. When these small retailers are not able to sell products, why would they need more money to buy stock.
GENIE from Innoviti is one such product that fills in this product-market gap by creating a level playing field for these small mainline retailers with their online competition. This smart marketing app from Innoviti helps small merchants get more walk-ins, convert more customers, and therefore make more profits.
Good innovative products can help unbottle this segment leading to rapid adoption.