How ShopKirana leverages Embedded Finance to double its AOV


ShopKirana is a B2B E-Commerce platform that is creating a new-age supply chain for the FMCG Sector by using its sophisticated tech and deep usage of data. ShopKirana helps both retailers and brands grow their business by leveraging Embedded Finance.

Retailers leverage embedded finance to purchase more stock, widen their product portfolio, purchase high-margin SKUs, and increase the space and assets in their stores. This helps them grow their business and increasing their customer base. This has in turn doubled ShopKirana’s AOV (Average Order Value) and CLTV (Customer Lifetime Value) and increased their delivery efficiency.

ShopKirana also provides an effective go-to-market strategy for D2C brands to crack the general trade channel. D2C brands connect to retailers and make their catalog available to them via the ShopKirana platform. However, retailers purchase new products only on credit. This is a crucial blocker for brands in cracking the general trade market. Building a credit arm to lend to retailers requires a large amount of time and capital. However, D2C brands can leverage the embedded finance on the ShopKirana platform to sell on credit. 

Embedded Finance is solving the exceedingly complex financial inclusion challenge in India. It enables digital platforms, Fintechs, and lenders to collaborate deeply and create innovative, data-driven credit products tailored for both MSMEs and brands.


  1. Embedded Finance doubles the AOV and CLTV of B2B E-Commerce Platforms

  2. D2C brands can grow by 10x by leveraging embedded finance to crack the General Trade channel


Rajat: Can you share your background and how you started ShopKirana?

Deepak: When I was a child, I used to operate my father’s small retail store. I went on to work at Procter and Gamble. While working at Procter and Gamble, I noticed that there is no data available about the shop I ran. In fact, there is no data about such small retailers. Even large brands were blind with respect to this network of retailers. That’s where the idea of ShopKirana was conceived. 

There are 3 ways to enter the retail market -  E-commerce, Modern Trade, and General Trade. General Trade is the largest market and all the largest players in the country and operating in general trade.

Large brands are trying to reach millions of retail stores but aren’t able to. New brands entering the country had no avenue to enter into this general trade market. That is the problem ShopKirana is solving. 

Rajat: What is the mission statement of ShopKirana and what is the size of the opportunity?

Deepak: Kirana contributes $500-600 Billion to the retail market. The industry is the largest and very unorganized amongst the retail sector. The yearly growth of the General Trade market is larger than the entire E-Commerce market. ShopKirana is trying to build a new-age supply chain using tech and data that operates in the general trade market. 

ShopKirana is now in 4 states. We operate in 8 cities. The total number of retailers in these cities are 1 lakh+. We have 60% of those on our platform. Our presence is majorly in tier 2 cities such as  Jaipur, Meerut, Indore. 

ShopKirana has grown 20x in the last 2 years and will grow by 20x in the next 2 years.

Rajat: What are the segments of retailers? How do retailers view your platform? What is the psychology of the retailers regarding the capital stack available on your platform? 

Deepak: There are three types of retailers. 

  1. E-Commerce Retailers

  2. Modern Trade retailer

  3. General Trade retailer

All retailers have a similar mindset - they want to widen their product portfolio, increase their space, increase their assets, increase their customer base.

The differences and how we solve these differences - 

  1. Large retailers have access to finance. Small retailers don't have access to finance. This can be solved by embedded finance.

  2. Brands connect with large retailers digitally, but not with small retailers. We connect both ends with the ShopKirana platform.

  3. Brands provide an SLA when working with E-Commerce and modern trade retailers, but not for small retailers. ShoKirana brings SLA and creates fair play for small retailers as well.

In addition, individual financiers cant solve the problem entirely. There are a lot of retailers on our platform with diverse needs. Different retailers need different solutions. So when we bring embedded finance with a lot of different financing solutions on the same platform, it becomes a menu card for the retailer to select from.

Rajat: What are the metrics that are impacted by embedded finance?

Deepak: The main metric that is impacted is Average Order Value.

The biggest ingredient of AOV (Average Order Value) is the psychology of the retailer. When a retailer is buying on cash, he thinks of finance as a bottleneck and makes decisions accordingly. His purchases are limited by the amount of cash that is available with him. His top priority is faster cash rotation. 

When finance as a solution is available to him, he then thinks primarily of increasing profit. He buys more range, more brands, slow turnover products that have higher margins. He buys a wider variety of products.

Delivery efficiency also increases, since there are fewer cancellations. The retailer develops gratitude and loyalty to the platform. 

To summarise, the three metrics that are impacted - 

  1. SKU mix improves

  2. Average order value increases

  3. Delivery efficiency increases

Rajat: In your experience, what is the bump on Average Order Value from Embedded Finance?

Deepak: Within a quarter, I can see his topline increases by 30-40% percent on the platform, which means the Average Order Value is doubled within 6-8 months.

Rajat: What is the impact on Customer Lifetime Value?

Deepak: When we started ShopKirana, we were very clear that retailers need two things - 

  1. Product Catalogue

  2. Financing Solutions 

When we, as a platform, provide a great service level and great product catalog, we solve half of the problem. The other half is solving his financial problems. As we are solving both problems now, lifetime value will obviously double.

Rajat: From a product perspective, what should a platform strategically think while implementing an embedded finance solution?

Deepak: Most important part of this product is to create an initial belief that anybody can avail a working capital instantly. 

Previously, people were rejected multiple times based on their face value. Now with the availability of relevant data, we are able to create that initial belief that people can have the access to funds. With data being used extensively, we are able to build the right credit products for the right audience, and then to do very strong prequalification. 

In addition, customers were purchasing from different vendors and his assessment data was distributed across multiple vendors. Now customers purchase from a single platform and the authenticity of data increases as the data is consolidated in one place.

Rajat:  Could you talk a little bit about your brand strategy? How you’re looking at the D2C space? And how financing combined with your platform data can change the brand story in India?

Deepak: Here is how we think about it -

  1. Brands are not great at building new-age supply chain technologies like delivery infrastructure, digital payments infrastructure, financial inclusion etc. 

  2. Bigger brands target large retailers and think they can scale by minimizing the supply & demand gap. But they can’t due to the lack of infrastructure to connect with small retailers. That’s where ShopKirana comes into the picture and helps brands plug into Shop Kirana’s supply chain so that every brand can now reach any store every day. 

  3. For the newer brands on Shop Kirana, with order-taking systems and delivery mechanisms, they can reach out to any retail stores. 

  4. Finance is a problem that newer brands face since the retailers are cautious about the ROI and don’t purchase new products on cash.

  5. Newer brands are unable to give credits due to a lack of funds due to the lack of information on risk assessment. With embedded finance on a platform, creditworthiness, risk assessment of a retailer, and cash flows are available democratically. With the financing taken care of by the platform, all that the brands need to do now is sell.

Rajat: What is the size of total financing that embedded finance can reach in the next couple of years on a platform like ShopKirana.

Deepak: ShopKirana did a lot of POC. In some of the markets, ShopKirana has captured 5-10% of the market shares. For a $500 million market, it becomes about a $10 billion opportunity for us. 

There are two sides to our supply chain- sellers and retailers. And both sides need financing. Not just the retailers but the sellers who are manufacturers and traders are businessmen too and when these platforms are infused with credit, their business doubles. The potential for embedded finance is immense.

Rajat: How can D2C Brands crack the general trade channel?

Deepak: When D2C Brands enter the General Trade market, they do not have any visibility because the supply chain is not digital. It's a kind of a black hole for them where the products will go and get lost sometimes. 

I can cite an example here. There is a  dog food importer bringing international brands into this country. It faces three problems -

  1. Finding the set of customers - We give these D2C brands access to our customer base and data on a category level to identify the right customers.

  2. Connecting the catalog with retailers and receiving orders - For this, we provide a DSaaS model - Distribution as a service. Via the ShopKirana platform, the retailers can place orders digitally and access their catalog. The brand salespeople also get tech solutions to place orders for these retailers. They also get access to a database of consumption data that they can leverage to strategically push their products. 

  3. Financing - Finally, when the product reaches the retailer, there is one last problem. Retailers only purchase new products on credit. When embedded finance is available, D2C brands don’t need to worry about that. This is especially critical because without credit the products wouldn’t end up in the stores at all. 

Rajat: What is the potential of Embedded Finance on a platform like ShopKirana?

Deepak: When we started ShopKirana, we made two presentations. One was for the brand because we wanted brands to be on the platform. At the same time, we created another presentation for banks. 

We said that this problem cannot be solved without money.  Retailers need financing and we need a partner who will come with us on this journey with us. 

Financing is a totally different kind of capability. It requires understanding credit risk and a large balance sheet. 

When we will be doing the post 10 billion transaction tomorrow, a single balance sheet cannot fund it. Different lenders have different capacities to rake risk and underwrite different profiles. That’s why embedded finance is important. 

Deepak: How do you see Embedded Finance shaping up?

Rajat: We think of Embedded Finance along 3 dimensions - 

  1. Extremely deep usage of data - We have a deep machine learning stack to assess creditworthiness. We create fair products that work for the customer, that are priced just right.

  2. Very deep partnerships -  Lenders are geographically constrained, have different risk appetites. The cost of customer acquisition is high, and repeat transactions are needed to cover this cost. So we need to partner with multiple lenders. Financial inclusion will be solved when platforms like ours come together. Digital Platforms have insights on customers, we have models to make sense of this data. No one can do it alone. That’s why we built a partnership platform

  3. Flexibility - We want to create a flexible platform that enables the creation of innovative credit products exactly tailored for the retailers we are working with. 

Rajat: What is the secret sauce for succeeding in your market? What is the differentiator for ShopKirana?

Deepak: Kirana retail is a large market and of course capital is required, but only capital is not enough to succeed. We were clear that we have to create a position that doesn’t need capital to operate our business.

ShopKirana is actually operating positive. We showcase our capability to raise a lot of funds, but we don’t raise to operate. The market will never return money to you if you raise to operate. So we have created profitable unit economics. 

We raise money for 3 reasons - 

Technology. Build a great product for everyone. Every partner, retailer, and brand is leveraging this great technology and data.

Building brands - We identify opportunities where markets are hungry for brands, and we create those brands. We have created 3 brands.

Scale - We raise when we want to scale. This is a game of scale. There are 2 ways to scale. First, we prove the depth of scale. ShopKirana is dominating player in each territory. In the last few years, we proved our width of scale. Today our business is getting the equal contribution of all territories. 

All our investors since the first round always reinvest, because they know we are building something great!