HDFC Bank has bought 1.5% stake in CSC Grameen e-Store for about Rs 10 crore, according to ETtech report.
India’s largest private sector lender is looking at the platform to extend the reach of its products and services — especially the banking portfolio — in rural areas, top executives said.
The Grameen e-Store, launched in April last year, offers a huge range of products including local handicrafts, groceries and consumer durables in far-flung areas. It has touched revenue of Rs 250 crore within a year of launch.
“This is a strategic investment through a small stake which “shows our commitment to the rural commerce model,” Smita Bhagat, group head, government and institutional business, e-commerce and startups,” HDFC Bank said.
“It is a clear example of what a partnership between government and private players can do. Look at its potential for transforming the lives of consumers and we benefit through its reach into the rural areas. It’s a win and win for both,” Bhagat added.
The e-store is run by the 400,000-odd Common Service Centres (CSCs) under the Ministry of Electronics and IT (MeitY).
Dinesh Tyagi, managing director of CSC e-Governance Services said that it will use the funds to strengthen technology, distribution channels and product portfolio.
“So far, the venture has done 22.5 lakh (orders) with an order value of Rs 252 crore. Companies are looking at it as a great platform to access the rural network. For HDFC, hyper local ecommerce is a great story for India. Since we sell everything, the bank can extend loans to those customers and even give credit facilities to ecommerce entrepreneurs.”
HDFC Bank’s Bhagat said since nearly 60-70% of the country’s population resides in semi-urban and rural areas, India will not be able grow at a good pace unless the rural economy grows.
“Mobile penetration and internet usage are key to development and we have to leverage the tech adoption to grow the economy,” she said, adding that the bank has integrated its backend systems with CSCs to ensure that all products and services that are available at its rural branches are also being sold by village-level entrepreneurs of the CSCs.
“It’s the same thing with the Grameen e-Store which is promoting local commerce,” said Bhagat.
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