Just Buy Live is a company that has offered a B2B, e-distribution platform via a mobile app in India since January 2016. The platform provides a digital solution to India’s offline channel, offering vendors and retailers greater flexibility, scale and access to data in order to simplify the distribution process. As of August 2016, Just Buy Live provides its brand partners with access to more than 60,000 retailers, who have been educated on using the platform through a mass outreach program. According to co-founder Sahil Sani, Just Buy Live’s aggregate margins are in excess of 10%. The company received series A funding of $20 million around 30 days after the launch and is pursuing a series B round of between $30-50 million by the end of this year.

Canalys estimates that about 80% of smart phones shipped in India in Q2 2016 reached end-users through a combination of distributors and retailers. Thus, e-distribution platforms like Just Buy Live have the potential to disrupt a large swathe of the market. Traditional distributors like Ingram Micro and Redington should be wary of the threat posed by the quick growth of e-distribution.

While e-distribution through Just Buy Live and competitors like Shotang addresses some current issues in India’s offline retail space, vendors should approach it as a supplement to their channel strategies. They can also use e-distribution as a tool to improve their engagements with their existing distribution partners.

E-Distribution helps smart phone vendors forecast demand and segment customers

The key value proposition of Just Buy Live is that vendors are able to gain greater control over their retail strategy through direct engagement with retailers.

Most importantly, vendors can reach out to stores that fit the profile they seek. For example, they can target retailers that:

  • Offer their competitors’ products
  • Average a certain rupee amount in transactions
  • Cover a desired geographic region

Vendors can then directly engage with these retailers to offer the devices they want to sell in those stores. For Xiaomi, Just Buy Live set up a pre-order hotline in addition to direct SMSing through the app in order to educate retailers on the six devices that were available for purchase.

Another important aspect of the service is that vendors can access a Brand Dashboard showing real-time data and analytics in addition to weekly or monthly reports. From these, vendors can track their performance and learn what changes should be made. Two core processes that can be improved by the data are demand forecasting and customer segmentation. With insights into what devices are selling where and to whom, vendors can focus on their strengths and address their weaknesses in the market. They can begin to adjust their product portfolio and pricing towards what is working, and avoid wasting effort and resources in geographies and segments where they don’t have traction.

For small retailers, or local ‘kiraana’ shops, the main benefit beyond access to multiple brands is ‘Udhaar by Just Pay’, a credit program offered through the platform. Through ‘Udhaar’, a retailer can take out an INR 2 lakh (~$3,000 USD) interest free loan on a 30-day basis. This trial period allows Just Buy Live to assess the creditworthiness and performance of the retailer in order to make adjustments to their future loans. With this working capital, retailers are able to increase the capacity of the orders they make on Just Buy Live. Most importantly, this credit program does not require small retailers to have credit history, fill out complex paperwork or put up collateral, allowing even the smallest storeowners access to capital they would not have through traditional financial services. To date, the program has had over 3,000 retailer participants.

E-Distribution faces logistical issues in its quick expansion

Despite the benefits that Just Buy Live presents, smart phone vendors should approach it as a complementary channel to their existing model, as issues in execution could damage their brand. A key point to be aware of is the logistical problems that Just Buy Live faces due to its rapid scale-up and the breadth of products it offers beyond smart phones. Unlike traditional distributors that have well-established logistics and warehousing processes specific to smart phones, Just Buy Live is new to the space and faces difficulties in distributing over 500,000 different products across categories to over 60,000 retailers. Common issues mentioned in retailers’ reviews of the platform include lack of stock, late deliveries, damaged or low-quality devices and poor customer service.

While these issues are not fully indicative of device quality and brand-worthiness, they do limit the impact e-distribution can have for vendors. The opportunity for building brand awareness is hindered by the fact that once the device is in the store, the vendor has little say over where it is displayed, how it is marketed and how educated the retailer is about the product when talking to customers. This is especially important because through Just Buy Live, their devices may be placed in direct comparison to their competitors. The issues with lack of control extend beyond the sale of devices as vendors will need to plan how to organize things like after-sales service and customer care.

For these reasons, choosing an all-in strategy with e-distribution does not make sense. Vendors should continue to pursue other offerings in the channel, including online sales, partnerships with large-scale retailers and even independent stores in order to minimize damage to their brand. Once vendors have established an initial relationship with retailers through the Just Buy Live platform, they should work towards improving their presence by educating the retailer and providing marketing materials so that customers are made more aware of their brand.

Platforms like Just Buy Live should serve as a starting point for vendors

In light of the rapid growth in uptake of both retailers and vendors that Just Buy Live has achieved, traditional distributors face a challenge in seeing some of their business eroded. However, because of the problems with executing the logistics, it also opens up an opportunity for existing relationships between vendors and traditional distributors to be developed.

For one, the option of Just Buy Live increases vendors’ bargaining power with traditional distributors. With a competing route for devices to reach retailers, distributors may be pressured into reducing margins or finding less costly ways to distribute. Additionally, vendors can use Just Buy Live as a research tool, gleaning insights from the analytics platform to then use in their discussions with distributors to form their desired retail strategy. This is particularly important as vendors try to increase their presence outside of tier-1 and tier-2 cities, where traditional, small-scale retail is the dominant channel for consumers. Finally, distributors could either partner with Just Buy Live to provide a better logistics solution or work towards replicating some of their features (such as greater digitization and outreach to retailers) to offer a better service to vendors.

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