Investing in Citymall

On the other hand, for Tier 2+ consumers, it's the exact opposite:  price>choice>convenience. These geographies come beset with their own challenges. They trust the kirana channel intimately, which offers them convenience, but not price. So, in cities where modern trade is accessible, these consumers trade the highly convenient kirana option for the price advantage (but very inconvenient) modern trade option. Further, given these consumers are very new to e-commerce, they do not shift entire monthly purchase baskets immediately onto online platforms. Hence, any platform attempting to serve this consumer base needs to solve for:

• Best price
• Serving low average order values
• Bridging the general trust deficit in e-commerce

Traditional, point-to-point inventory led models, with digital marketing led customer acquisition, will find it very difficult to cater to these requirements, more so in a low margin category like grocery.

Citymall’s community group purchase model elegantly addresses these challenges. In any local area, Citymall  identifies community leaders (CLs) who onboard the consumers, aggregate their orders and do last mile delivery - offering a seamless purchase experience. Citymall is empowering these CLs through required support and backend infrastructure, creating earning opportunities for 1000s of micro-entrepreneurs in the process.

The role played by a community leader can be elaborated as follows:

• Trust: Being integral parts of their communities, CLs easily onboard consumers from their social groups - bridging the trust gap. This results in very low acquisition costs
• Low cost to serve: Consumer orders are aggregated by CLs, who in turn deliver to end consumers - this addresses the challenge of low order values, ensuring efficient logistics
• Ensure high NPS and retention: High performing CLs address consumers’ grievances proactively, understand their needs deeply and are able to build a highly loyal customer base in a few transactions

Citymall thus offers a convenient and high trust purchase experience, while being price competitive. Being a high frequency category, consumers interact with CLs multiple times in a month and hence become loyal customers in a very short period. This relationship, coupled with the low cost structures, gives Citymall the promise of becoming the lowest cost channel to serve these consumers across categories.

Angad and Naisheel started CityMall as a deals based group-buying platform targeted towards the next 500 Mn users in February 2019. They initially focused on long tail categories such as home and kitchen appliances and cosmetics. Over time they realized that group formation was easiest in categories such as groceries given the high frequency and homogenous nature of needs in the category. They pivoted the model to a community leader led platform focused on groceries in December-19. Within 8 weeks of operations it was evident that there was a strong product-market fit and the business was scaling rapidly.