Get Conekted: MAGNiTT interviews Conektr Founder and CEO, Madhusudhanan Janakarajan
Conektr, a digital platform that bridges the gap between brands and the end consumers, along with the intermediaries, recently raised AED 3M ($800K) in a dual-tranche Pre-Series A funding round, from Auris Investments. After the news was announced, we caught up with their Founder and CEO Madhusudhanan Janakarajan, who shared what the startups' future plans are, how they are re-engineering the distribution value chain, how important technology is to Conektr, what they were looking for from their investors, and much more.
To start, tell us briefly about Conektr. How does it work?
Conektr is a first of its kind B2B2C digital platform. As the name says, it 'conekts' the suppliers (brands/distributors) to the retailers and to the consumers on a common platform. Brands can have a dialogue marketing with our 4000+ retailer network with real-time visibility of their brand performance. Grocery owners can order their stocks from multiple brands in a single order without worrying about minimum order quantity using our B2B app called Conektr Business.
On the B2C front, we help retailers to convert their stores into a digital grocery platform, free of cost. We deploy conektr suite of tech products including a white-labelled hyper-local & omnichannel mobile app with the flexibility to publish local prices and offers, a mobile POS & a CRM. That means a retailer can now buy, operate, and sell digitally. Consumers can now enjoy “online luxury from their kn(own) grocery” – as deliveries happen in an area of 300 Mtr and around. Our B2C app is called Conektr and these digital groceries are being branded as Conektr Hub.
You are currently in the process of re-engineering the distribution value chain? What do you mean by re-engineering?
In my view, re-engineering means reinventing the wheel without changing its shape and components! You can change the mechanism of working but the wheel has to be round in shape with a hub and (thicker/thinner) spokes (many/few)
We at Conektr never want to replace the format of any of the major components of Distribution – be it a brand, distributor, or a grocery shop. Even if we want to, it would be ineffective like how many “direct to consumer” companies are trying out in the market. In FMCG distribution, there is no shortcut route but can be an efficient route to disrupt the whole industry.
We want to enable every popular cola brand with our platform than replacing it with Conektr cola; we never intended to stock all 500 distributors stocks at our warehouse. And lastly, no one can beat neighborhood grocery’s service levels to a consumer. They are the closest. Imagine if there were no groceries around you and you had to either order online or to go to a mega-store near you for everyday milk and bread.
So we are here to Disrupt the industry by empowering every component of distribution with cutting edge technology.
Can you share what “cutting edge technology” you are using and how important this is to you?
Technology that can cut the problem and give an edge to the user, is cutting edge technology to me. And it must be frugal. I am tired of hearing fancy tech jargon. We use simple common sense that keeps the user in mind.
Conektr is a technology-first company with FMCG in its DNA. Technology is important but technology alone can’t solve a business problem. FMCG Distribution is not an app distribution. Even the much-expected 5G network can’t carry and deliver a carton of 8KG cola on Whatsapp or an email. FMCG distribution involves physical movement of low-value, high volume products in multiple drop sizes to multiple touchpoints. It’s a complex one.
There is a big difference in the way a consumer buys the grocery vs the retailer buying for his shop. You need to have the domain expertise, user profiling, right tools, right resources, and relevant knowledge. How we apply multiple technologies to solve a complex problem is the key.
It is quite extraordinary that you managed to raise this round with the current COVID-19 crisis. Was this in the works from much earlier?
COVID-19 actually created momentum to close the deal quicker. Being both an essential industry and also an online business, the pandemic, in a way drove better traction. In fact, retail/distribution tech is seeming to become a lucrative option for investors now.
The current climate has undoubtedly accelerated digital transformation and e-commerce. Has this affected the Conektr platform in any way?
It has only impacted us positively. While many have an option of working from home, one fraternity we missed to celebrate during COVID-19 are our FMCG sales people. They visit 20 outlets a day and visit a minimum of 240 different people in a month and use their handheld devices to take orders from retailers! Now, suppliers can list their products on our platform and the sales team can manage them by wfh.
Retailers can enroll with us as Conektr Hub outlets. We help small groceries to stay competitive and offer all that a mega store can offer to consumers – white labelled home delivery app, in-store contactless buying, and many other unmet needs such as digital sampling, claim processing etc.
So, it has helped indeed. People are convinced that digital is the way forward and the adoption has increased. We believe this will fuel the growth further.
It’s safe to assume that after this round, you're going to have some exciting growth plans. Can you share some of Conektr’s short-term plans for expansion with us?
So far, we have managed the toughest part which is to recruit retailers on the platform and succeeded in educating them on the benefits. We have crossed 4000 retailers in the UAE now, in which more than 90% have transacted already.
Now we want to enable them to become digital groceries and make them a Conektr Hub outlet to facilitate their consumers with online luxury. This requires some resources and we are also enhancing our service levels with WoW (Warehouse on Wheels), same-day delivery, and more. This round will be used to enhance and deepen our maiden market, UAE.
How are you bridging the gap between the brands and the end consumers?
Already brands are bridged with consumers, but we would bridge them digitally with real-time visibility and dialogue capability through the existing neighborhood retailer. We never want to reinvent the shape or the components of a running wheel, we only enable and empower them.
What were you looking for from your investors, beyond capital?
Startups always face an oxymoron. They need high caliber resources, but can’t always afford them! So be smart and go for strategic investors, which is what we did. The benefit double if you look for strategic investors who can add value to your business beyond money. We are blessed to have a well-rounded team - industry stalwarts like Vishal Tikku, Ranjit Kuriakose, and subject matter experts like Deepak Kohli. The learnings are invaluable.
What do you foresee as the largest challenges in the UAE and to scaling Conketr in GCC/beyond?
I don’t see any challenge per se! It is an opportunity. The GCC has one of the highest per capita grocery spending, online spending is more than $36Bn, mobile and internet penetration is one of the highest in the world. It is a great climate for startups! UAE is the best launchpad for any startup and KSA is one of the most lucrative markets for any FMCG company in GCC.
We should have been already up and running in a few countries but have been delayed because of the current situation. Our business needs an on-ground presence and a little leg work until we set up our operations.
What is your big-picture vision for the future of Conektr?
We want Conektr to break the digital divide, empower the neighborhood groceries and make them a Conektr Hub.
This would not only empower the components of the distribution industry and make it efficient but will also contribute significantly to the UAE's road traffic by being a consolidator (suppliers to retailers) and decentralizes the home deliveries (retailers to consumers) at much better customer service levels across the value chain.
In a nutshell, we would disrupt the distribution industry and reduce the noise of distribution by making every touchpoint in the distribution a happy point!
Finally, what advice would you give to yourself four years ago when you started Conektr?
Why so late? You should have started much earlier.
Are you a startup looking for investment? Apply for funding to 85+ investors now.
The Real Estate industry saw sizable investment activity over the last 5 years, with a total of 16 investment deals from 2015 to 2019. Access more trends and data in our 2019 Real Estate Venture Investment Report.