The funds will be used for expanding the community leader network in Tier III and IV cities, scaling technology, building a supply of small regional brands and creating a suite of D2C branded products, the company said in a release.
Angel investors like Blackbuck CEO Rajesh Yabaji, former TaxiForSure CEO Raghunandan G, and former Flipkart, Alibaba executive Prasanth Nair also participated in the round.
Started in November 2019, ShopG has built a social commerce platform powered by micro-entrepreneur community leaders aiming at the next 500 million customers. ShopG was founded by Ankur Arora, Abhishek Mishra, Pranay Suwalka and Yogesh Nehra, with past experience in building and scaling startups such as Cleartax, Ola, Rivigo, Delhivery.
Today, ShopG has more than 1000 community leaders serving over lakh customers in a single Tier III city and the business has proven profitability in the city.
“Next 500 million internet customers from Tier III and IV cities of India, who earn an average household income of Rs 25,000-30,000 per month, prefer assisted buying from someone they trust and have low Average Order Values (AOV) of less than Rs 250; making it impossible for existing E-commerce 1.0 players like Amazon, Flipkart etc to service them with high customer acquisition, and supply chain costs,” said Ankur Arora & Abhishek Mishra, co-founders, ShopG.
Our network of community leaders who are mostly women, inspire trust as well as serve them at Zero Customer Acquisition Cost and 10X better supply chain. ShopG partners with regional/small brands that offer good quality products but have had limited distribution reach. These products are made available and aware to customers via the community leaders at great bargains”
“Social commerce is currently at $1.5 billion – $2 billion in India and will scale to $25 billion by 2025 or earlier on the back of smartphone ownership that has crossed 500mn in 2020 accelerated by Covid. Most of this growth has come in Tier III cities,” said Anup Jain, managing partner, Orios Venture Partners. “In China, social commerce makes up nearly 12% of retail and has created four unicorns over the last five years with more than 20 funded companies.”
“ShopG’s business model offers a unique way of servicing the low AOV Tier III and IV customers with industry-leading customer acquisition cost and logistics cost,” said Abhishek Goenka, Head & CIO, RPSG Ventures.