Intel Capital-funded online marketplace firm IndiaMART IndiaMESH plans to shift focus to catering for the procurement needs of bigger businesses and bigger orders, which will in turn be serviced by bigger suppliers. This will be a major growth area for the portal, which has built its Rs 200-crore industrial goods listings business by focusing largely on small and medium enterprises (SME).
“We’re looking at a net revenue of Rs 365 crore in 365 days this year. With our Big Brands programme, we are moving from a motto of More buyers, More sellers and More business to Big buyers, Big sellers and Big business,” says Dinesh Agarwal, founder and chief executive. Large companies and public sector units, which float tenders and requests for quotation are on the radar.
The software engineer-turned-entrepreneur is strengthening the leadership team to drive these new initiatives. Indiamart recently hired Mudit Khosla, the former chief executive officer of tradus.com, to head the Big Brands vertical. “The programme will entail a lot of investment. We are planning to raise Rs 200-300 crore. We are in talks with a few investors,” Agarwal added. The dilution could be up to 10 per cent.
Some of this capital will also go towards building volumes on Tolexo , an online business-to-business (B2B) platform that enables SMEs to sell and buy products.
However, Agarwal is clear he is not going to be reckless like some of the ‘so-called’ B2B marketplaces. “We are not sure where all that big money is going. If that is going into the 70 per cent discount on apparel of which 90 per cent is going to come back as returns, I’m not standing in that line,” he added.
With about two million sellers listed and 25 million products, Indiamart is one of the largest marketplaces. However, unlike its more popular counterparts, Indiamart’s fast-moving wares are not mobile phones or fashion.
The 40-something Agarwal, who literally wears Indiamart on his sleeves, clad in a white T-shirt with the red company logo, demonstrates his new portal Tolexo.com, which allows people to buy industrial goods such as digital multimeters, electrical distance meters and the like. “The hot-selling fashion items on our portal are industrial shoes and gumboots,” he jokes.
Some of the small industrial players who need such goods are finding a lot of value in the “best of India” price they get on this platform. Agarwal feels e-tailers have hijacked the ‘B2B’ terminology to circumvent their regulatory challenges. “We are the original B2B marketplace,” he says.
The road was longer and harder for Agarwal. Started in 1996 as a B2B portal for exporters, Indiamart is one of the few early internet businesses that survived the dotcom crash. However, the stock market boom in 2005-07 and the resultant rupee appreciation killed the export market. “With one B here and another B outside the country, it was not working out,” he says.
It was then that Indiamart shifted focus to the domestic SME segment. The business picked up well and Agarwal was soon in talks with investors such as Intel Capital and Bennett, Coleman and Co. Then, Lehman Brothers happened, sending valuations for a toss. “The day the money finally came in, the Sensex was at its lowest,” he recalls.