PremiumThe Indian retail market is estimated to reach trillions of dollars in the coming years, including both online and offline. However, while online shopping has seen a surge, the majority of India’s retail market still remains offline. In fact, 95% of the market is offline, according to Anshoo Sharma, chief executive officer of MagicPin, an offline discovery platform.
“Depending on which report you read, India’s retail market is worth $850 billion and 95% of that is offline," said Sharma.
MagicPin is an offline discovery platform that connects users to retailers and helps offline retailers amplify their business by using machine learning algorithms and a social media-like approach. The platform currently has five million users, 150,000 retailers (30,000 of whom are paying MagicPin for its services).
At its core, MagicPin’s business is quite simple. It creates a database of offline retailers and connects users to the same. But it’s how MagicPin does it that makes all the difference.
Sharma explained that the company uses big data models and artificial intelligence algorithms for this. It asks users to click a selfie whenever they’re at a store and click a photo of their bills. With these, MagicPin understands user behaviour, like what a person is buying regularly, how much they spend and also, which retailers are popular in a particular locality.
The app even lets users follow each other, like on social media, which allows it to recommend retailers just like other social media platforms do by using data from different users. Retailers pay MagicPin a commission for the business it brings to them. For instance, the company promises about 4x in revenues for an expense of ₹2,500 on its platform.
While MagicPin has partnered with brands like Westside, Fab India and Shoppers Stop, Sharma says 80% of his business comes from local small businesses with single stores. MagicPin currently operates in the grocery, food and fashion categories, but plans to expand to many other categories.
While MagicPin doesn’t have many competitors in the offline discovery space, Sharma is quick to admit that his is not the first business to try this. Apps like Nearbuy and MyDala have been in the offline discovery space for a long time by providing coupons for nearby businesses, thereby providing incentives for customers to go to these retailers.
Perhaps one of the earliest examples of offline discovery through social media was Foursquare, an app that asked users to check in to various locations. While Foursquare began in 2009 and went through some turmoil, it did see success from selling user data to companies. Foursquare, now Swarm, uses the data it acquires from users to help businesses target customers globally.
Other examples of offline discovery platforms in India include Pricemap, which was acquired by ShopX earlier, another company that connects micro, small and medium enterprises to customers. Pricemap had created a search engine for users to find offline retailers.
Further, one of the most innovative examples of technology being used to change how offline retail works is in the Amazon Go store in the US. The store allows customers to walk in, pick things they want to buy and walk out without a checkout line. It does this by using deep learning, computer vision and other technologies. Amazon identifies you as a unique customer when you walk in, and charges the items you picked to your Amazon account.
While there is no word yet on whether Amazon is going to bring these stores to India, Watasale is an Amazon Go inspired store that opened in Kerala around September last year. The store allows customers to scan a QR Code on their way in, pick items they want, and walk out with the bill amount being debited directly from the e-wallet on the company’s app. Its first store is in Gold Souk Grande Mall, in Kochi, Kerala.
