Retail SaaS in India vs. the World – Learnings from Kumar Vembu's Journey

Retail SaaS is a different game altogether in India. Unlike global markets, the Indian retail landscape changes every 100 kilometers. Building a solution that works for all of them requires deep thought and understanding.

I recently watched a podcast ( https://youtu.be/KSG8HeDpl9Q?si=3i7y7cpwArKdkAsb )by Kumar Vembu, founder of GoFrugal Technologies, a company that has been in the retail tech space for over 20 years. Here are some key insights from his journey and approach to solving for Indian retail using SaaS.

India has a population of over 143 crores compared to the 34 crores in the US. It’s the 4th largest retail ecosystem in the world.
However, the average revenue per store in India is only ₹6,000–₹7,000 per month, while in the US it’s around $3,000 per store — a huge gap.

This clearly shows that Indian SaaS is a highly price-sensitive market.

Yet, India has over 12–13 million retail stores, whereas the US has only around 1–1.5 million. So, the volume is massive, but margins are razor-thin.

The Indian retail business is fundamentally different. A software solution made for the US market cannot serve Indian retailers effectively — especially at the same price point.
Moreover, the market behavior changes every 100 km, making it extremely difficult to build a “one-size-fits-all” product.

Here are some of the major challenges with the Indian retail market:

1. Low literacy rates
2. High price sensitivity
3. Regional diversity — every 100km brings a new market dynamic
4. Lack of standardized business processes

As Kumar Vembu puts it, at GoFrugal, they are building a “digital-first retail solution” for retailers who can’t afford expensive solutions but still need strong, tailored technology.

Kumar observed that most retail businesses in India can’t afford a digital transformation officer. They lack time, money, and expertise.

These businesses are overwhelmed with operational chaos and complexity.
So, the first step was to deeply understand those complexities.

Kumar didn’t try to solve everything at once. He and his team:

• Broke down operations into 25 core business processes
• Addressed them one by one
• Defined clear policies and simplified workflows

In this process, they also discovered “blue ocean” opportunities — underserved areas with little to no competition.

1. Targeting areas where no digitization had happened
2. Modernizing outdated workflows
3. Standardizing processes for recurring complexities

They solved one pain point at a time instead of offering an all-in-one solution upfront.
This gradual approach built trust and was easier for SMBs to adopt.

1. High implementation cost
2. Involves risk and disruption
3. Steep learning curve
4. Difficult to evolve or adapt

Instead, GoFrugal focused on solving problems step-by-step, making adoption simple and affordable.
This approach allowed them to cross-sell and upsell more easily, while also reducing friction for customers.

“Whatever we do, we need to do it in less time and with minimal attention from the retailer — because a call from their vendor or customer is more important than us.

Creating the product is just half the battle. Implementing it effectively in Indian retail is the bigger challenge.

India is not a DIY (Do It Yourself) market — it’s a DIM (Do It for Me) market.

So, modern retail SaaS should reduce dependency on human decision-making and instead make businesses more policy and process-driven.

Kumar gives the example of Uber and Rapido:
You don’t need to talk to a manager to know what to do — everything is systemized and clear.

That’s how Indian retail should operate.
Make the system so efficient and streamlined that no escalation is needed. That benefits not just the owner but also creates a seamless experience for the end consumer.

A great example of visionary thinking:

3 months before GST launched, GoFrugal shut down customer support calls.

Kumar anticipated the surge in call volume and redirected the team’s energy toward:

• Creating content
• Automating support

Yes, they lost 5% of customers initially. But over time, this became a massive advantage.

Now, any problem you face on their platform has:

• A dedicated video
• Email support
• Paid call support at ₹1,000/hour

While competitors tried to win by offering aggressive phone support, they eventually burned out and shut down.

Lesson:
Short-term thinking can destroy long-term sustainability.

Here’s how SaaS adoption evolved:

1. VAT Introduction — Made ERP systems more attractive
2. VAT E-Filing — Made ERP systems necessary
3. GST Introduction — Made it critical
4. Digital Payments Boom — Changed the game
5. COVID-19 — Made digitization essential

Earlier, in 2004, it was hard to sell ERP software.
Today, the awareness and demand are significantly higher.

We’ve moved from a:

Functionality market — — — — — → UX and Quality-first market

Retailers today know what they need, and they’ve already faced challenges with bad vendors. They’re now looking for:

• Great UX
• Integrated solutions
• Minimal training required

This is how Retail SaaS in India works — and why it’s so different from global markets.

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