Distributors usually transact in cash with retailers and in turn pay manufacturers via bank accounts. BeatRoute Innovations, a startup that focuses on facilitating last-mile trade between packaged goods companies, distributors and neighbourhood stores, is launching a cashless transaction service for traders and distributors to ease their hardship.
Last-mile logistics in packaged goods sector has been one of the major collateral damages of the government’s demonetisation drive. While consumers and retailers are warming up to digital payments to weather the storm, the voiding of Rs 500 and Rs 1,000 notes has only worsened last-mile trade which is largely cash-dependent.
BeatRoute Innovations, a startup that focuses on facilitating last-mile retail between packaged goods companies, distributors and neighbourhood stores, is launching a cashless transaction service for traders and distributors to ease their hardship. Using this feature, retailers will be able to pay for their purchases from distributors of consumer packaged goods companies.
Industry estimates peg India’s last-mile trade sector comprising manufacturers, distributors and retailers at USD 500 billion in India. Distributors usually transact in cash with retailers and in turn pay manufacturers through bank accounts.
BeatRoute will launch the feature on December 1. “The current demonetisation drive will only expedite the adoption of cashless feature. Increasingly, retailers are receiving consumer payments in digital form. It is only going to be easier for them to pass it on digitally to their suppliers,” said Vinay Singh, Chief Executive, BeatRoute Innovations.
“Retailers can use BeatRoute app to make payment to distributors in a few touches. We are making this possible for a reasonable fixed fee that’s less than the cash collection and handling cost of distributors,” Singh said.
Moreover, BeatRoute has already offered its existing clients including Cremica, Unicharm, Danone, Inbisco and Gionee, a chance to on-board the app platform. These clients operate over 3 lakh retail stores across India. The company will begin rolling out the feature with retail stores in north India.
The startup said the cashless trade feature is compliant with Reserve Bank of India and other banking regulations.
BeatRoute said the company has been operationally profitable since April and plans to raise Series A funding in a couple of months. For now, Singh said, the startup wants to enable the ecosystem of its customers in a completely new way. “We are in early growth stage. We are just focussed on solving problems for our customer base,” he said.