Citymall: Taking e-commerce to Bharat’s masses

The firm is using a community commerce model to make customers from tier-II, III & IV centres transact online

Naisheel Verdhan (left), and Angad Kikla, co-founders, CityMall, a community commerce venture
Naisheel Verdhan (left), and Angad Kikla, co-founders, CityMall, a community commerce venture

Internet penetration in India has grown rapidly over the past five years, with 600-mn-plus Indians now having data on their phones. More than 80% of this user base is on social media and content sharing platforms, but less than 15% are enjoying the benefits of e-commerce. This is despite the efforts of various direct-to-customer e-commerce platforms to get people from tier 2/3/4 towns to transact online. “There are two major challenges that have restricted the adoption of e-commerce beyond the big cities – low ticket sizes and a need for assistance & trust,” says Angad Kikla, co-founder, CityMall, a social commerce venture that seeks to create India’s largest chain of virtual stores on WhatsApp.

CityMall’s model of community commerce claims to solve both the aforementioned problems. “Our network of community leaders (CLs) act as demand aggregation points, supply chain partners and the front-face of CityMall’s engagement with its end user base. CLs have good social capital, and the fact they are a part of the same community as the customers allows first-time users to trust the platform,” he remarks.

In his assessment, the average ticket size of purchases in small towns (~Rs 300) is one-third of that in metros and tier-1 cities, making a D2C supply chain unfeasible for these geographies. “Home delivery for such transaction sizes makes the supply chain unsustainable, necessitating demand aggregation to cut logistical costs.” Besides, customers at such places are used to purchasing from neighbourhood kirana stores and local bazaars, and it requires a significant amount of hand-holding, assistance and trust-building to get them to transact online, he adds.

In two and a half years, CityMall has created a network of 25,000+ CLs in 25 urban centres across Haryana, NCR & UP. It has grown at 30% m-o-m over the past 18 months, and entered categories like grocery, FMCG, fashion and general merchandise. “One in three households has purchased from CityMall in cities where we started operations earlier, and in the newer cities we are seeing faster acceptance,” says Kikla.

CityMall has raised a total of ~$110 m, with its recent series C round being led by Norwest Venture Partners. “Our last three rounds have materialised over 15 months, cementing our conviction that community commerce is the way to bring Bharat onto e-commerce,” he says. “We are backed by some of the top global institutional investors including General Catalyst, Citius, Jungle Ventures, Arena Ventures, Elevation, Accel & Waterbridge.”

With the money it has raised, CityMall plans to expand to 100 towns and cities over the next 18 months, strengthen its leadership team, enter new categories and invest in advanced technology. “We plan to hire 400 people in the next 15 months.” On the future outlook, Kikla says, “We have barely scratched the surface of the e-commerce market in Bharat. The future looks extremely promising as we look to penetrate deeper into north India, and expand our reach to the western belt. Our CL network enables us to service the needs of our end users efficiently. We are on track to become Bharat’s biggest e-commerce platform.”

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