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00:00I know just talking about the state. A state of the Indian economy. You know you're dealing with these Kiran as these mom and pop shops. The thing is what are you noticing from your clients I suppose and how they're dealing with these higher prices and the ability for them to have pricing power. So wish India that race has one the killers phenomena that most of the consumer products in India are benchmarked to certain prices save one rupee product of security product 10 rupees product. So what traditionally companies have done to beat inflation. They don't necessarily increase the prices of the product that it is the quantity in the product and keep the benchmark stable. But now I think the outcome the wine that the quantities of the product cannot be reduced below a certain point. This year we are seeing probably the biggest drop in the quantities. So going forward any more inflation will have a substantial impact on the on the consumer companies. They will either have to bump up the prices on figured out new ways out of the situation. But essentially you're a B2B player here. How does that differ to what's going on with the BTC side of things. Yeah. So B2B essentially if you look at all Indian consumption it is driven by either to be kirana stores who sort of stay in customers or through the to the modern trade and e-commerce. But a modern trade and e-commerce come with all of the newest technology IBEX. But the general trade which is driven through those small mom and pop stores is how I mean remain outside the ambit of technology or any disruption. And that's where there's an opportunity to connect all of these thousands of brands who sell in India to connect to these millions of store closer million stores will sell to the consumer. That's almost a 600 billion 600 billion dollar market. And we intend to build that supply chain the technology to end supply chain. That I think the brands to the to the stores and us enable low consumption and especially the rural consumption in India. And that is the market that is growing at the fastest pace in the country. Trade is close to 300 billion and expected to hit 600 billion for next five years. And we want to be the driver of that. And the consumption growth. A driver of that but that is going to require capital how are you placed in terms of cash and are you looking at any more funding a serious funding. Yes. So this is a humongous market. I believe we do have an opportunity to build it. Yes. First hundred billion blacks on the guarantee are at a billion dollars. We do believe that. Do a hundred extra and we are available from yet. But you're right. It would need substantial capital. And the capital is not required because of we have to build a network. We had to aggregated platforms and we are very very complex late. But is the whole industry that is going through the transition and to get to get every stakeholder who continues and come on to the new ways of breed predict David Westin capital. I mean on that box the BOVESPA ourselves up in RTS with me there's the 300 million plus round from Softbank and Goldman Sachs. So with that fund we had we had a fairly well set for for the foreseeable future. But if we need be if he needs us to go and market in ways we would not shy away from that. But as we stand today we are available. There's a lot of challenges when it comes to the tech space particularly in rural India. And we know these power blackouts as well causing consternation across the whole country. What are some of the challenges that you're seeing in this digitalization space. Yeah. So I think I think one good part of the Indian species forced the mobile penetration. A whole host of traditional issues are issues faced by the traditional network are obviated. If you look at our network it is predominantly mobile driven. And once you are mobile do you run the or gas issues off or lady shoes off access network. Those are not necessarily applicable to us. They do really. Neville essentially leapfrog on most of the logistical challenges that are faced by the first world countries or you want some of the largest cities. And going to the digital first logistics network it has its own challenges that digital penetration is not exactly available in every corner while it is almost there. The handset prices are still higher for the for the consumer. But once you are able to surpass those couple of challenges then it is very easy to. Not easy. But what is feasible to build that new networks in those areas. What about your cash position now. And are you looking perhaps at another round of financing or would you perhaps go for an IPO and perhaps see a latter move would be perhaps more I suppose difficult given what's been going on with the IPO as you've been seeing and seeing in public markets. So above our fund is definitely going to go for funded at some point of time in two chips. We are we are focused on delivering our first milestone that is ISE billion GMV. And before we go from the journey of 1 billion to NIKKEI billion there will be one funding coming in between. We do have the option to buy time that between anywhere between 24 months will take two months. But the markets I can use you. We might do it earlier. Even within this financial year. But given the current situation I don't think I have I don't know if the situation will turn out so significantly and we'll be able to raise anything soon. And that's that's not necessary. So we can we can pockets as far as I was concerned. I think IPO is the good part of it for us. Not before until we hit that 10 billion number. And then before we started to get any from that 10 billion to do our real future will be a 50 billion company will be 100 billion company. I think that's the timeframe for us to get for IPO and definitely not in this current market situations. Sandeep inflation a cause of concern for businesses consumers around the globe how are you keeping up with rising costs and how are you also finding it in terms of retaining staff. So yes inflation is a big challenge for us because we started with the real customers who read the discretionary spending side anyway. I mean it's a small portion of them that they spend. And that is getting hit directly. So what we have seen Lahore last month London half is consumption packed up has moved to the absolute necessity items and that does put pressure on the release of the product that we can sell it in the profitability or the Taylor Riggs that we can generate out of those products. So for us the challenge is of course how do we maybe gain and work towards more nimble cost structure that will that will help us start with the low cost items and eventually get ready for Dani Burger as and when it comes in sight that we are able go all for the full breadth of the product to draw customers and getting back to our normal institutions.

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ElasticRun CEO on Indian Rural Consumption Market

Co-Founder & CEO of Indian e-commerce startup ElasticRun, Sandeep Deshmukh, predicts Indian rural FMCG & grocery market will grow to $600 billion in next five years at 15% CAGR. ElasticRun provides supply chain and credit services to India’s mom-and-pop shops or kiranas. Earlier this year the firm raised $330 million in a funding from SoftBank and Goldman Sachs. Deshmukh speaks to Juliette Saly and Rishaad Salamat on the sidelines of Goldman Sachs Technet Asia-Pacific Conference. (Source: Bloomberg)

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