Merchant Credit
ShopX - 10i Commerce Services connected brands, sellers, and retailers. To solve retail store owners' funding challenges for inventory restocking, we introduced a product with strong market fit and an intuitive onboarding experience. This approach improved user retention, repeat orders, and merchandising value for ShopX.
Retailers' Funding Shortfalls Impacting
ShopX's Retention and GMV
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Retailers faced challenges restocking inventory due to cash flow limitations, hindering their ability to maintain a fully stocked storefront and ultimately affecting revenue.
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While retailers typically received financial support from offline distributor networks, ShopX’s e-commerce platform lacked flexible and trustworthy funding options.
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The lack of reliable financial support had a ripple effect on ShopX, leading to decreased user repeat orders, user retention, and overall merchandising value.
User Overview and Financial Challenges
An insight into Shop'x users, outlining their backgrounds, business types, and the financial challenges they encounter. Understanding these aspects helped me tailor solutions that better support their success in the marketplace.
Suresh Chandra | 55 | Male
📍Bengaluru, Karnata
(2019)
Had run a mom-and-pop electronics shop for 38 years. With a high school education, he supports five dependents and generates an average monthly cash flow of ₹2,50,000, with an average purchase order value of ₹3,500. He faced financial challenges related to working capital and seasonal fluctuations, and relied on informal credit lines.
Devesh Gupta | 42 | Male
📍Lucknow, Uttar Pradesh
(2019)
Had managed a small retail electronics outlet for 27 years. Educated to middle school level, he had seven dependents and earned an average monthly cash flow of ₹1,65,000 with a purchase order value of ₹2,000. He also dealt with working capital issues and seasonal fluctuations, supported by informal credit lines.
Preeti Nimje | 38 | Female
📍Pune, Maharashtra
(2019)
Operated a mom-and-pop FMCG shop with 18 years of experience. A graduate with three dependents, she had a monthly cash flow of ₹1,40,000 and an average purchase order value of ₹1,200. Like the others, she faced challenges with working capital and seasonal fluctuations, relying on informal credit lines.
Key Insights on Customer Credit Requirements
Retail store owners were facing financial challenges that were impacting their inventory management and cash flow.
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Flexible Funding Options
A flexible and trustworthy funding option could empower retail store owners manage cash flow more effectively, reducing their reliance on offline distributor networks for financial support.
03
Staying Informed
There is a need for a system that can monitor the customers' credit usage and provide timely alerts or suggestions to prevent them from overspending or falling into debt.
02
Adaptive Credit System
Customers needed a system that would adapt to their financial changes, offering credit lines that align with their current financial status, business type, and sales channels.
04
Credit Management Eduction
Customers needed education on managing credit lines effectively, including financial advice and resources to help them utilise credit responsibly and avoid financial pitfalls.
Streamlining Priotisation
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User-Friendly Credit Options
Adaptable credit options customised to meet business needs. -
Efficient Application Process
Fast and straightforward credit application processes that save time, allowing focus on operations. -
Flexible Credit Terms
Credit terms aligned with monthly cash flow and seasonal fluctuations, enabling maintenance of adequate inventory for customer demand.
The MVP
MERCHANT CREDIT OFFERING
Merchant Credit
Expanding Retail Opportunities
By offering credit, this model tapped into previously underserved market segments, increasing transaction volumes.
Key Implementation Requirements
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Legal and Partnership Approval: Securing necessary legal approvals and establish partnerships with NBFCs.
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eNACH Process: Implement the process for seamless disbursal of credit.
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Document Collection: Retailer, Seller KYC..
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Product Development: Integrate credit as a feature in both internal tools and retail application.
Success Metrics
Increased User Onboarding and Transactions
The number of users onboarded and the volume of transactions processed.
Exclusive Credit Management Profile
Expanding Opportunities
Establish a Credit Profile for end-users with easy discovery of credit options and repayment terms.
Key Implementation Requirements
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Credit Management System: An internal tool for managing credit applications, monitoring platform health, performance, and requests.
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User-Friendly Application: A seamless application interface and management system for end users.
Success Metrics
Increased User Engagement
The number of users onboarded through this
streamlined credit system.
Digital Credit Application
Credit Application and Tracking Experience
A real-time digital application experience for potential and onboarded credit users.
Key Implementation Requirements
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Document Categorisation: Define the required documents for credit applications.
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User Journey: Outline a detailed user journey for applying and managing credit.
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Backend Processes: Set up backend systems, including wireframe processes, to support the application flow.
Success Metrics
Processed Credit Applications
Monitor the number of successful credit applications processed.
Deployed Iterations
Impact
ShopX launched the Credit Service at the beginning of 2020, and within 90 days, it achieved significant results:
Credit Users Onboarded: Over 7,500
Monthly Credit-Based Orders: Made up 30% of total app orders.
This initiative enhanced ShopX's Gross Merchandise Value, increased the repeat user base, and effectively addressed user attrition on a large scale.
In the Press: ShopX Credit Service
ShopX & LoanTap launch credit services for retailers
"Under the credit facility from ShopX, in conjunction with LoanTap, retailers now have access to a digital, completely paper-less model to avail credit as well as one-tap repayment on the amount borrowed. The ShopX Data Platform helps assess the risks, creditworthiness and market valuation of these retailers attached to the ShopX network. This makes the process of getting loans easy, fast and secure."
- Vaishnavi Gupta
Assistant Editor, IndianRetailer.com & Retailer Media | Jan 31, 2020
