Listen to the interview here, on INDIAai's official YouTube channel.

The maturity of AI solutions and its applicability has piqued the interest of many sectors. Retail/ CPG happens to be one sector that can hugely benefit from AI. There are a plethora of use cases like customer preference analysis, supply chain management, merchandising, in-store surveillance where AI and its various subsets can be applied to.

But organised retail takes up only 10% of the market share in India. 90% is still dominated by small scale retailers. That’s right – your local kirana stores continue to function as the heart and soul of true Indian retail. In urban pockets, they may have been usurped by the big retail giants but these small shops are still the lifeline for India’s Tier 2 and 3 cities. One store can typically cater to atleast 100 customers, most of whom will be repeat customers; and the retail consumption space alone amounts of $650 billion.

So what ails the sector? Many factors – lack of technology support, lack of supervision, longer delivery cycles, limited premium brands and limited inventory. 

These challenges piqued the interest of Amit Sharma and Apoorva Jois. Could they possibly develop a state-of-the-art 'Retail Operating System', and infuse technology into the dogged unorganised retail sector?

Shopx aims at transforming retail by blending the online and offline models of commerce. Today, its India’s leading “digital offline” business, doing a business of over Rs.6,000 Crores annually and across 500 towns. With the goal of creating a platform like ShopX, Sharma stuck by the core tenets of his business philosophy which focused on the potential of kirana stores in ‘Bharat’ or Tier II India. In his previous life as an engineer, Sharma held two international patents in the areas of Artificial Intelligence and Cluster Computing. He wanted to bring these capabilities to India’s unorganised retail sector, which he believes is “starved for local technology products with a high propensity for adoption”.

With marquee investors like Nandan Nilekani and Pramod Varma, the architects of UIDAI; and Hong Kong’s Fung Strategic Holdings, Shopx is present in 21 states and working with more than 1,81,000 partners. In this interview, Sharma talks about looking at the bigger picture that lay ahead: laying down communication pathways by digitising information, and then building a smart AI layer and customised products for retailers. “We observed that Indian retailers were using technology extensively for content and communication, but not for commerce. We wanted to change that,” says Sharma.

When COVID19 struck and the nation went into one of the harshest lockdowns, it was a time of reckoning for Sharma and the entire Shopx team. Admittedly, this phase has accelerated the pace of digitization by three years, he says. Retailer sign-ups increase by 40%, there was a 60% increase in average order values, ease of adoption among store owners increased too. This time also allowed the team to focus on deeper technology applications and build more personalized products like the retailer platform, drive digital demand and making the app a self-sustaining unit.

Shopx has collaborated with Omnipresent, an aerospace and robotics company to deploy AirTrain, a drone delivery system that can deliver goods between 30 to 60 minutes. Sharma is bullish about the deployment of drones in the B2B domain, as it will change the dynamics of inventory and sales management, and equalizing supply chain systems.

When asked about the digital readiness of India 2 (Tier 2 India), Sharma reiterates that a common misconception about India’s next billion users is that they are tech laggards. “The common belief is people are not ready for tech; but ideally, the tech should be made ready for the people. That’s our endeavour at Shopx – to continuously innovate and build products that cater to local tastes and preferences. One example is a solution we made that provides a product description in 7 languages and even reads it out for you. This is because retailers in Indian towns are more comfortable with vocalized medium of communication instead of written.”

With urban India overserved and overcrowded with innovators, Sharma urges new age entrepreneurs to focus on the 400 million users in rural India who are starved of good business models, great technology and service models. “If you can build tech for India’s next billion, you can easily internationalise these models with abstracted architecture. The opportunity is ripe!”