IndiaMART.com: The global gateway to indian marketplace

MAG.NET,

Dinesh AgarwalQ. Tell us about your journey to become a Netpreneur?
A. I was working as a software engineer in US between 94 and 95 and there I saw internet growing as a media That point of time I knew that Internet is going to be the widest one of all medium. And I wanted to come back to India and start my own business as I do come from a business family. Being a software engineer I always wanted to be in a website publishing business but also have our own portal simultaneously because website publishing cannot be a USP of the company. Few years from now website publishing will just become like desktop publishing.

Dinesh Agrawal, the gullible small town guy from UP has been a real achiever in his life. Working as a software engineer in companies like NOVEL, AT&T and ABN AMRO, it may be a hard decision for him to jump in to the dotcom bandwagon. He has really fought his way to reach his goal and become one of the most successful netpreneurs of the country. He talks to Prajjal Saha about his journey to success and his site indiamart.com

Q. What happened first? You wanted to start a dotcom and then you came up with this idea or vice versa?
A. No, being a software engineer I always wanted to be in business related to IT. Then this idea came to mind. I found lot of traders and small time exporters who could not do large amount of export business because of their lesser presence in the overseas market and also because of prohibitive cost.

Actually the buyers were unaware about these suppliers and small time suppliers could not contact them. So I thought of providing a platform where these two can meet. At that point of time economic reforms were taking place in India and there was a great demand of Indian products like garments and handicrafts in the overseas market. I can’t say that I planned a B2B model because at that time I basically did not know what is a B2B model. I just called it a marketplace that’s the reason our baseline reads “the global gateway to Indian marketplace.” This is how everything happened.

Q. But you must have faced lots of difficulties convincing people and finding clients?
A. Yes at first, I did face lot of problems because I was selling IT services to non-IT people at a time when even the computer usage was very low, leave aside the Net penetration. It was very difficult to convince them and tell them what is Internet and how they will gain from it.

IndiaMART Home PageQ. What kind of services do you offer?
A. We started off with an online yellow pages which was a traders, exporters and travel directory. We published a list of suppliers on our site. We used to do it for free at that time. We had a tie-up with ASSOCHAM ( The Associated Chambers of Commerce and Industry in India) and took the help of FHRAI ( Federation of Hotel and Resorts of India) for the listing. The next we started was a ‘freelisting’ and ‘queries forwarding service.’ There were a lot of sites that were into this freelisting, but we were the only one who forwarded the queries free of charge. It happened as such that that we received queries from buyers on our site and then we forwarded these queries to the suppliers. This had a dual benefit. First they became aware about the fact that there is business through and on the Internet. Secondly, they came to know about our site and services. This made them grow interest in our site and they came back to us for developing their online catalogues or websites. This was the major revenue generating model earlier and it’s also the same know.

Q. What is the target group for clientele?
A. We do not have very big names in our clientele. We always targeted at small companies with non-IT background. Our clients include mainly exporters and traders who may not be big business houses but they have the money to spend.

Q. What is your revenue model?
A. Our revenue model moves in a step by step process. First we approach different clients, which includes both suppliers and buyers through direct marketing or direct mailing. We invite them for freelistig in our site. And when they receive some sort of enquiry out of our site we approach them for developing their web catalogues for premium price. When they generate some business through this their interest grows more and they approach us for more detailed catalogue development and are ready to pay higher price for that. This is one revenue model of ours.

And after the supplier starts getting real business they want to expand it to form the basic step of getting business through Net to maximizing the use of Internet by actually generating business from Net. This is when we advice them for banner advertising. This is our second revenue model.

“No, being a software engineer I always wanted to be in business related to IT. Then this idea came to mind. I found lot of traders and small time exporters who could not do large amount of export business because of their lesser presence in the overseas market and also because of prohibitive cost.”

Q. But you earn same revenue or percentage of the business your client earns through your site?
A. It may be that we do not get a direct share of the amount of business generated through the site but we are certainly benefited by through an unsaid percentage from the business generated. Suppose client gets a business worth a crore through our site and he manages to Rs.10 lakhs from it. It may be that he spends 1 lakh out of it to expand his business. So we may not be benefited directly but in the long run we are obviously benefited. We are a client-based company and if our client is satisfied we are sure to progress. Actually the whole transaction can’t be completed on the Net. So, we cannot get the direct share.

Q. But how is your site helpful for the buyers?
A. From buyers point of view our site is very convenient because if he is looking for an item say CD roms, he will get 50 suppliers with their detailed report about them and there product. And above all, he even compares the prices of different suppliers and then opts for the best option. Everything is very transparent on our site. We want to make it sure that any buyer who wants to buy anything from India he goes to a one stop shop called Indiamart.com And if we can gain the trust of the buyers, suppliers would directly come to us.

Q. Tell us something about your strategic allience with yourimporter.com? How did it happen?
A. Like we are a supplier consolidator from India; youromporter.com is the buyer consolidator in US & UK. So, it’s a perfect match as they have a qualified buyers’ list as we have a qualified suppliers’list.It happened such that the y were looking for a supplier aggregation system in Asia. In the process they found Indiamart.com to be highly visible with more than 1000 supplier catalogues and more than 30,000 suppliers listing.So they contacted us and we together developed this site quoteforum.indiamart.com where actual buying requirements are put there so that the suppliers can directly visit and make their bids online.

Q. What are the plans for your future?
A. In near future we would like to start rating system to gain the trust of the buyer as well as the supplier. We are working with CRISIL and other credit rating companies to work on it. What we want to do is to put the background of both the supplier as well as the buyer on the site. Like for buyers, we will give information about their financial background, their turnover, how many times have they rejected shipments? What is there payment schedule and for suppliers we will talk about how many times have they delayed the shipment, or how many times their shipments have been rejected and also the turnover of last financial year. And if one wants this kind of information offline you will end up paying spending anything between Rs.10,000 to Rs.50,000. We want to bring trust in this whole system. We are also working for a payment mechanism so that B2B transactions can be completed on the Net itself.

Frankly speaking another point is that at present we are 60 per cent Delhi mart, which means that we are more Delhi centric. Our aim is to become 100 per cent India mart

Q. It must be very difficult for you to leave a highly paid job in USA and come back to India to start your own business?
A. yes, there was a lot of risk in it. But I was very confident as a software professional and I knew about it that if I did not succeed, I would again get a job. All I would have lost is seniority and maybe some hike in the salary. But I certainly wanted to give it a shot and by God’s grace I have succeeded. It was very frustrating at times due to the low infrastructure but anyhow, we had to manage and we are still managing even under difficult condition. And I am sure it is going to repay one day.