Our merchant led models are a capital light business strategy in respect of network expansion. We have developed our own technology platform and continue to invest in it for further improvements, which allows us to service a wide pool of citizens and merchants and cater to their diversified requirements. The premises from which BLS Touchpoints and the BLS Stores operate are owned / leased by our merchants and we provide them with necessary technology and other infrastructure (as applicable) enabling them to extend our services to the end consumers. The success of our reliance on these merchants emanates from a robust mechanism of background checks and minimum qualification criteria, we undertake and their respective position in the local societies which acts as a deterrent for such merchants from delinquencies in our arrangement with them.
In addition, our focus on and use of technology throughout our business assists us in expanding our reach throughout India without incurring the relatively higher costs associated with traditional brick and mortar branch presence. We incur minimal capital expenditure in connection with on-boarding our merchants, because the on-boarding and setting up capital expenditure costs are borne by the merchant themselves, such as any existing physical premises, laptop, mobile phone, internet connectivity, micro ATM and AePS devices and fingerprint and/or IRIS scanners, and our technology significantly simplifies our merchant on-boarding and training process, making it cost effective for the merchant and efficient for both parties. However, due to the ability to offer multiple goods and services from BLS Stores and the financial inabilities of majority of our merchants to make investments for converting a BLS Touchpoint to BLS Store we intend to assist such merchants by making investments to substantially increase our BLS Stores footprint on a pan-India basis from the proceeds of the Offer. For further details, please see section titled “Objects of the Offer” on page [•]. This approach presents opportunities to improve gross margins and limit variable costs. Further, once a merchant has been onboarded, there is a huge scope for us to offer additional products through the same merchant. Over time, the merchant develops relationships with the consumers and is able to leverage such relationships to cross-sell new or third-party products, which typically increases the revenue per customer at minimal to no cost to us, which in turn improves our operating leverage and ability to achieve profitability.
In addition to our merchant network which, as of March 31, 2023 was 92,427, to reach the underserved and unserved populations in hard to reach locations (referred to the “last mile” of delivery). Our focus on operational execution in connection with our merchants, our drive to offer a broad range of products through each of these distribution channels and the capital invested into our technology infrastructure, has resulted to be one of the effective business models.