Business to business or B2B e-commerce company ShopX has pivoted to become an e-commerce enabler after evangelising a full-stack model similar to Udaan for five years. ShopX used to help retailers with an assisted e-commerce solution right from sourcing, supply chain and credit line.
“We are moving towards a digital model rather than a supply chain led model,” said Amit Sharma, co-founder and chief executive of ShopX in response to Entrackr’s queries.
According to Sharma, ShopX will focus on using its tech platform to power the existing supply chains. As part of the pilot, ShopX is already talking to two global FMCG brands to power their nationwide distribution.
Backed by Nandan Nilekani and Fung Investment, ShopX has raised over $54 million till date and is valued at over $100 million. Nilekani has invested $18 million in the Bengaluru-based company while Li & Fung investment has poured in $35 million.
Post the pivot, the company has also reduced its employee size. “Since February, ShopX has laid off half of its employee base,” said a source requesting anonymity. “The layoffs were executed to cut costs and find a sustainable business proposition.”
Sharma confirmed the layoffs but didn’t disclose any numbers. “As part of this change, we have reduced the team sizes strategically in specific areas, mainly those involved in supply chain management and certain category operations. The reduction is a strategic and forward-looking change,” he said.
With the new model, ShopX enters the crowded e-commerce enablement space where it would compete with Khatabook, OkCredit, Dukaan and Dot among others. Sources emphasised that cracking the e-commerce enablement space won’t be easy for ShopX.
“They [ShopX] were focusing on easing supply chain and procurement for retailers and it was completely different from what they are trying now,” said the person quoted at the beginning of the story.
Meanwhile, Sharma believes that the new model will unlock much higher profitability and very large-scale distribution for brands and distributors. “It is also a continuation of, and an expansion of, the Retail360 solution ShopX had launched for brands last year,” he asserted.
The pivot by ShopX outlines the fact that cracking the B2B e-commerce space with a full-stack model is tough and this could also be sensed from the debacle of several players including Wydr and Tolexo in the past. While Sharma and team ShopX appear bullish on the new model, only time would tell how an asset-light model will help ShopX.