Vietnam-based B2B marketplace Kilo plans to reach 1 million businesses by next year; offer payment solutions, more
Technology for MSMEs: Vietnam has around 100 million people and 7 million retailers, so there's one micro retailer for every 4 households in the country.
Technology for MSMEs: Ho Chi Minh-based Kilo, a marketplace to connect suppliers (wholesalers and distributors) and retailers, is aiming to acquire 1 million businesses by the next financial year, Kartick Narayan, Founder and CEO, Kilo and former CMO of online deals marketplace Groupon told Financial Express Online.
Currently, the business-to-business (B2B) platform has 30,000 wholesalers and retailers from 42 cities of Vietnam transacting on its platform.
The retail sector in Vietnam is highly fragmented and almost 80 per cent of it is unorganised. It is dominated largely by mom-and-pop shops that serve the neighbourhood with grocery supplies, fresh seafood, fashion, electronic accessories, and even over-the-counter pharma products. “Vietnam has around 100 million people and 7 million small and medium enterprises. The retail density is extremely high and there’s one micro retailer for every four households in the country. So, this $180-billion market is really the backbone of the economy,” said Narayan.
According to market data firm Statista, almost 97.6 per cent of Vietnam’s population has access to the internet and owns a smartphone. Hence, e-commerce enablers such as Kilo have put smartphone at the heart of their business model.
Kilo’s platform offers local retailers and wholesalers the tools to manage their procurement, inventory, pricing and promotions strategy, billing, distributor network from a single app and save time.
“Till now the focus was on product development, so the traction we got was completely organic. Now we are going to start making marketing investments through online and offline channels as well as form strategic partnerships to bring more businesses on board,” added Narayan.
To put things in context, he explained that the distributors cover only half the market and the other half has wholesalers that the retailers have to reach out to, especially in tier two and tier three cities, where they visit the wholesale markets, negotiate the price, carry the goods back and stock it in their stores. “With a platform like Kilo a lot of that heavy lifting is removed because the retailer can build a basket on the smartphone and spend more time in store, talking to customers and improving sales.”
Following the trends of other e-commerce enablers in the B2B segment, Narayan said, they will launch financial products like a working capital loan for their customers by this year. “Payments and financial products are extremely important, not only as a retention tactic, but they also help transform businesses by enabling them access to capital and digital payment solutions.” Last month, the firm had launched its own payments platform to enable vendors to collect and settle payments, calculate refunds, and reconcile with their sellers. In the works is also a plan to open up the platform to consumers and enable the retailers to create their online shop and sell directly.
The platform has listed 45,000 unbranded products that contribute to an annualised run rate of $250 million sales, said Narayan.
On tapping other geographies, he said, it is a 12-24 month roadmap. “We’ve got to get Vietnam right first before we get into a second market, but the way we are architecting the platform and the service, it will be extendable to multiple markets beyond Vietnam.” Without sharing more details, Narayan said it could be any country from Southeast Asia like Indonesia, Bangladesh or Myanmar or even India.
Launched in October 2020, the 50-people company has raised $5.7 million so far, of which $5 million was raised in a pre-Series A round in November 2021 from venture capitalists such as Altos Ventures and January Capital. Its earlier investors Goodwater Capital, Ascend Vietnam Ventures and other angel investors also participated in the last round.