B2B e-commerce platform for manufacuteres and distributors, replacing trade force.
The platform was piloted at 50 retail points in cooperation with COCA-COLA.
The application is ready for scaling. The pilot is split up in 3 steps:
1. 'orders' and 'promo'
2. brand communication
3. retail audit
Annual market volume of food products in Russia is 240 bln. USD.
Traditional market accounts for 27% of the total market and equals 65 bln. USD.
The number of traditional retail stores is more than 200K.
Problem or Opportunity
The profitability of FMCG companies in retail chains is shrinking due to the number of reasons. Hence manufactures are forced to look at traditional trade. Being segmental, traditional trade demands a large number of trade force to collect orders, inform about new products and promos, control the on shelf availability and the planogram. All these expenses are unprofitable especially if the retail store is small or badly located. Hence the described functions with a help of online solutions and platforms could be outsourced from sales representative to retail itself. One visit of sales representative costs on average 1,5 - 10 dollars. Only 50% of all visits are effective, bringing orders to manufacturer. Mobishop provides system for collecting orders for only 0,75 cents.
Manufactures's expenses on trade force is about $3,8 bln per year in Russia.
Solution (product or service)
Mobishop e-commerce solution helps manufactures and distributors to reduce field force expenses by 10 times.
- Smart-Satu (Kazahstan) is a solution similar to MOBISHOP. In 2017 - they launched sales in Moscow. They give out tablets to stores with their preinstalled program.
- Gradient is a mono application for Gradient distributor own needs.
- A number of manufactures develop their own mobile solutions.
Advantages or differentiators
Smart-Satu gives out to retail outlets the tablets with its pre-installed program. Tablets can be lost, broken or obsolete - they need to be controlled and maintained. Therefore it increases the company's maintenance and staff costs.
Since the share of any manufacturer or distributor varies from 0.3% to 2% of the total turnover of a retailer, mono applications are not effective. The motivation of a shop assistant for working with such mono solutions can be supported only by large marketing manufacturer budgets, otherwise the interest will quickly be lost.
Accumulated revenue in Russia in 2018-2020 is over 22 mln USD.
In our calculations we have used a contract approach where manufactures buy Mobishop service for a fixed number of trading points (5K, 10K, 20K, 30K or 40K).
0,75 cents - a cost of 1 transaction via MOBISHOP
70K retail outlets are planned to be activated within 3 years.
Number of transactions per month per store is 10
8,4 mln orders per year collect manufactures and distributors via MOBISHOP.
Money will be spent on
The development of an additional app functionality and activation of retail points.