Smerkato

Smerkato, a bootstrapped startup established to organize the Food & Grocery Ecosystem of India
using Technology. They're building products & platforms for organising a disorganised sector.

The word Smerkato means ‘Smart Market’. It has its origin in the Italian word ‘Mercato’, which
means market. Smerkato aims to make the whole ordering/buying process for customers “smart”.

Using their platform, Business Management Solutions, restaurants/ food chains/ local
sellers/Suppliers, in addition to ordering for their raw material/ grocery requirement, can also
manage Billing, Inventory, Credit, GST, Customer, Reports, Ops management.

The transaction data can be used in future for understanding the customer buying behavior,
compare sales of different product based on geography/ demographics/ etc, and the same can be
used by FMCG and/ or other sector companies to come up with better products, manage demand,
etc, for their product(s) in the market.

Food chains, restaurants, and hotels can place orders for all their grocery requirements directly
on Smerkato and orders will be delivered to their location. Smerkato, which calls itself a
‘technology-enabled retail platform,’ is also a hyperlocal marketplace for local stores. For a fixed
commission, Smerkato passes orders placed by customers directly to local stores for delivering to
customers.

The word Smerkato means ‘Smart Market’. It has its origin in the Italian word ‘Mercato’, which
means market. Smerkato aims to make the whole ordering/buying process for customers “smart”.
The Bengaluru-based startup, launched earlier this year, aims to organise restaurants and the
QSR sector by using technology to bring visibility on wastage, usage, return on investments, etc
through Artificial Intelligence (AI). Food chains, restaurants, and hotels can place orders for all
their grocery requirements directly on Smerkato and orders will be delivered to their location.
Smerkato, which calls itself a ‘technology-enabled retail platform,’ is also a hyperlocal
marketplace for local stores. For a fixed commission, Smerkato passes orders placed by
customers directly to local stores for delivering to customers. Smerkato is self-funded with about
Rs 40 lakh invested so far. It is looking to raise Pre-Series A for $500,000-$750,000. The B2C
model was launched in March and B2B model in May this year. 

Reasons to shop with Smerkato:

1. 24/7 Delivery: 7 days a week, premium on demand service is also available.

2. Handled with care: Great quality products picked and packed with care.
3. Quality Guarantee: They only deliver Quality assurance product.
4. Shop your favorites: Order your most loved products in just a few seconds.
5. Cashback points: Collect cashback point for all cash and carry invoices for more.
6. Shop on the move: Shop on the move from their website.

Products:
Initial Strategies of Smerkato

Usually, restaurants and food chains that require groceries at regular intervals either hire a team
to procure them from multiple sources or deal with multiple vendors directly. Both options are
time and energy consuming.

As part of understanding the processes, the Smerkato team decided to collect orders from
multiple customers and procure material in bulk. This gave them a price advantage and they
followed a dropship model where they procured multiple items from multiple traders and
supplied them directly to their partner restaurants without holding any inventory. However, with
the drop-ship model they cannot command better margins and they observed some operational
challenges as well.

Now Smerkato is focusing on an inventory model, which allows them to procure at lower rates
and gain better margins, and cater to more restaurants. Its plan is to procure items directly from
manufacturers and farmers and hold them in their fulfilment centre. From there the items can be
supplied to restaurants according to their scheduled order frequencies.

Problem statements that they are looking at addressing on priority:

 Their aim is to bring transparency between teams and management in the food industry.
 They remove the hassle of managing multiple vendors and losing the focus on real/core
business.
 They make our clients to focus on serving their customers in a better way using their
products to reduce the lapse rate.
 They take the hassle of finding the best quality items at reasonable prices for their clients
 They handle our clients invoices/purchase orders and give access to management to avoid
fraudulent activities by internal teams.
Milestones:

Smerkato’s Fight against Covid-19

Fundings:

They’re a bootstrapped startup where they invested their own money of +60 Lakhs into the
business. Now they’re looking at raising $2 Million to $5 Million USD from few VC’s and
HNI’s, to increase their Client & Supplier base, and also to scale up their Technology &
Operations.

Market Position of Smarkato:

Potential competitors:

 WOTU
 Udaan
 Jumbo Grocery
 EZkirana
Challenges:

Their research and their experience of operating in this space for the last year have told that there
are multiple challenges restaurants are facing in today’s market. First, and the foremost, is
managing

Multiple Vendors – restaurants are finding it difficult to negotiate and follow-up with multiple
vendors for their multiple items requirements where they are losing valuable time from their core
business of serving customers.

Quality & Prices – restaurants have to compromise on either one thing to satisfy their regular
needs as current market situation says you get the best quality for the best price but no one says
to get the best quality for the price you can afford.

Invoices & Purchase orders – restaurants have less transparency on what invoices they’re
raising to vendors and a few places there is no proper use of purchase orders which creates lack
of transparency and gives more chance for fraudulent activities.

Customer Experience – restaurants are losing track to notice who are loyal customers and why
they’ve lapsed customers registered every now and then, as their major focus lies at managing
restaurant instead of serving the best to customers.

Deliver when in need – Most of the restaurants look at buying things immediately to cater their
customers when they run out of fast-moving inventory, Smerkato offers deliveries within 8
Hours to 12 Hours for the items they order.

Solution:

1. Order Online, using our platform (customers know what their usage)
 2. Manage all your Backend activities at one place (customers can manage their purchase
orders/invoices/ratings/reviews on order deliveries etc.,)
3. Purchase schedulers (Purchase Scheduler will be scheduled as per customers initial
requirement and reminds a customer on when to order, and if required the customer can
modify the pre-scheduler for getting required items)
4. Manage your Customers and leave rest with us (With Smerkato Store/Restaurant
Management software, clients can manage their customers to reduce the lapse rate and
also to know their customers' behavior)
5. The promise of Best Quality and price (clients gets access to the most competitive prices
for the best available quality in the market)
6. Deal with a single partner rather than managing multiple vendors for multiple items -
simplified process.
7. Deliver items when in need, promising deliveries within 8 to 15 Hours from the time it is
ordered

Standing out with tech:

Smerkato’s USP lies in its tech. Smerkato claims that the app eases the manual work done by a
local store. It not only helps them with billing but also in tracking the team’s performances and
GST filings. Further, an integrated CRM Solutions for the trader and store/restaurants allows
them to manage their customers better. The Smerkato application allows them to maintain just-
in-time inventory, adding that based on the footfall and customer ordering behaviour, the app
also estimates raw material required in the coming days.
Based on customer behaviour, the app can also predict which type of dish will be in demand and
thus identify the required raw material so that the order can be placed in advance. The biggest
success is seeing their partner restaurants finding Smerkato affordable and reliable for their raw
material deliveries. The biggest challenge, however, was reaching customers without burning too
much money. It’s difficult to maintain a big marketing/sales team without funding; but they are
identifying smarter ways to reach our customers. They are using the internet to identify potential
clients and sending proposals online before visiting them.

Currently, Smerkato’s transactions are on a daily, weekly, fortnightly, and monthly basis. It has
10 registered clients for B2B for grocery and raw material supplies. Also, more than 20
supermarkets have partnered (for B2C) to get their products listed on Smerkato’s website.
Besides, more than 10 stores are using their billing software. For restaurants, it has so far
delivered more than 100 orders with an average basket size of Rs 22000, and for supermarkets
more than 80 (organically) with an average basket size of Rs 700. Smerkato claims to have a
monthly revenue of more than Rs 4 lakh. Tirumala claims that in the last three months they have
served orders worth Rs 20 lakh with a gross margin of over eight percent. For March 2018, they
are targeting a client base of more than 120 restaurants with a GMV of Rs 3.4 crore, with 120
transactions a month for restaurant supplies. It also hopes to achieve more than 150 billing
software sales with a gross profit of Rs 12.24 lakh. In Bengaluru, Smerkato wants to capture
more than 100 supermarkets for order deliveries for customers who can order from its platform.
Smerkato will also be entering Tier-II cities soon, to increase sales on billing software and create
a footprint for a hyper local marketplace for customers to order online. Vijayawada,
Visakhapatnam, Kurnool, Mysuru, and Hubli, will be the first choices. Smerkato is now working
on integrating its entire supply chain process by using Artificial Intelligence.