New Delhi, Jun 2 (PTI) E-commerce platform CityMall is reimagining retail for a “massive, underserved population in Bharat” struggling to access everyday essentials that are both affordable and aspirational, says co-founder and CEO Angad Kikla.

India’s food and grocery market is a USD 600 billion opportunity. Yet over 93 per cent of this market is still served by unorganised kirana stores and less than 2 per cent is captured by e-commerce, Kikla told PTI.

The absence of a technology-led model, rich with data insights and real-time updates that remove inefficiencies, means choices are limited for small-town consumers, who may be often end up overpaying for inconsistent quality, he explained.

That’s where his company, which focuses on 500 million new to internet users living in small cities, towns, and villages in India, comes in.

“By removing inefficiencies, aggregating demand, and leveraging technology, we’re not just making e-commerce accessible to Bharat, we’re making it the most affordable way to shop for daily essentials,” Kikla said.

Excerpts from the interview: Q: What was the idea behind building CityMall? A: Before CityMall, I spent seven years building three startups—each an attempt to solve meaningful problems in logistics, B2B commerce, and software for FMCG brands. Some scaled, some didn’t. What stayed with me through it all was a deep fascination and eventually, love for India’s distribution problem.

There’s a massive, underserved population in Bharat that still struggles to access everyday essentials that are both affordable and aspirational. That gap isn’t just a business problem, it’s a human one. CityMall was born to bridge that gap. To reimagine commerce for Bharat in a way that’s trusted, accessible, and built for the next 500 million.

Q: How is CityMall tapping into the Bharat opportunity? A: So, imagine walking into a small-town kirana store. No price tags, no discounts, just whatever the shopkeeper decides that day. The selection? Limited. The quality? Questionable. And the prices? Always at Maximum Retail Price—if not higher. Now, imagine doing that every single month, knowing you’re paying 15-20 per cent more than you should—just because there’s no better option.

This isn’t a small problem. Despite all the noise around e-commerce, 93 per cent of groceries in India are still bought from mom-and-pop kirana stores. E-commerce? Just 2 per cent. That means for every Rs 100 spent on groceries, only Rs 2 flows through online channels.

Kirana stores are actually the most expensive grocery channel globally. The very people who need the lowest prices are overpaying the most, spending USD 50-70 billion more on groceries every year than they should.

This is the problem CityMall is solving. By removing inefficiencies, aggregating demand, and leveraging technology, we’re not just making e-commerce accessible to Bharat, we’re making it the most affordable way to shop for daily essentials.

Q: How does CityMall’s `virtual kirana' model combine the best of traditional retail and modern e-commerce, especially for low-margin categories like groceries? A: The virtual kirana concept arose from looking at how corner stores operate. They have a low overhead, deep local knowledge, and a personalised touch. We essentially digitised this approach.

For local outreach, we enlist community partners, people who already have strong local credibility, to serve as the face of CityMall in their areas. Think of them as digital/virtual kirana stores. They act as last mile centres for CityMall.

We deliver in bulk to digital kirana stores, reducing warehousing and sorting costs significantly -- less than half as that of traditional ecommerce. They sort the orders, pack and deliver them to customers making it a sustainable and low-cost last-mile solution.

This creates remarkable cost efficiency. By leveraging these local nodes (our community leaders), we don't need expensive infrastructure for each neighborhood, keeping our supply chain cost below Rs 60 per order, roughly 40 per cent lower than our competitor.

We then add a technology layer: our digital platform consolidates these dispersed orders, enabling bulk procurement, which further drives down costs. Traditional kiranas do this in a rudimentary way; we do it at scale with data insights and real-time updates.

Q: E-commerce penetration in India’s food and grocery sector is under two per cent. Why has this space remained relatively untapped, and how is CityMall looking to fill this gap? A: Despite being a USD 600 billion market, e-commerce penetration in India’s food and grocery sector remains under 2 per cent primarily because traditional models weren’t built for `Bharat'.

Some players focused on affluent metro consumers, relying on expensive warehouses, high last-mile costs, and large basket sizes. This model breaks down in small towns, where consumers buy in smaller, frequent quantities and affordability is key.

I believe quick commerce also doesn’t work— it optimises for speed, not cost. Meanwhile, organised retail hasn't scaled beyond urban pockets due to low density and limited spending power. No one had redesigned the supply chain to make low-margin, small-basket deliveries viable, until CityMall.

CityMall has built a Bharat-first model by partnering with local entrepreneurs who act as `digital kirana stores'. These partners receive bulk deliveries, sort and deliver orders locally, making last-mile delivery affordable and sustainable. Our hyper-batched business to business-style fulfillment further reduces logistics costs, enabling us to serve small-town India with unmatched efficiency and value.

Q: You recently expanded across Tier 2, 3, and beyond, doubling city presence in less than 60 days. What were the main operational hurdles you faced and how did you overcome them? A: Scaling so quickly, especially in smaller cities brought a unique set of challenges. In the last 60 days, we expanded to 31 new markets, more than doubling our presence and deepening our footprint in underpenetrated regions.

On the logistics front, each new market required careful planning for motherhub placement, route optimisation, and delivery partnerships. Recruiting and training local community partners was vital to our expansion.

We designed a structured onboarding programme that covers product knowledge, customer service, and digital literacy, ensuring our new community leaders could quickly engage their neighbourhoods. By keeping our tech framework modular, we seamlessly scaled or customised for each new market, minimising disruptions during the rapid rollout.

Q: Many e-commerce or quick-commerce startups rely on heavy discounting to gain traction, often at the expense of profitability. How does CityMall balance customer acquisition with sustainable unit economics? A: From a unit economics perspective, with our total per-order cost under Rs 60, we can offer competitive prices without eroding margins. This model pays for itself more quickly than a model that burns cash to acquire customers.

We also see greater long-term loyalty. Since community leaders often have direct relationships with their customers, we experience higher repeat purchase rates, which further improves our lifetime customer value. It's a virtuous cycle: reduced overhead leads to better prices, which creates loyal customers. PTI MBI MIN MIN