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The COO of IndiaMART shares the company’s market expansion strategies, advertising campaigns and growth plans
India’s tier 2 and tier 3 markets are evolving fast and improving their contribution to India’s economy owing to rapid mobile internet penetration, tech adoption, the reach of marketplaces & e-commerce platforms and simplification of various policies. This is effectively supporting the growth of India’s B2B sector, says Dinesh Gulati, COO, IndiaMART.
Nearly 35 per cent of the B2B traffic comes from Metros and the rest is from non-metros and smaller towns, Gulati shared in a conversation with e4m. He also spoke on the company’s market expansion strategies, advertising campaigns and growth plans.
What major investments are boosting the overall growth of the company?
We started expanding our network of acquisitions 18 to 24 months back. Earlier we used to have only an in-house sales team and then we started expanding through our channel partners in large cities as well tier 2-3 towns because of the change in traffic patterns, which is coming almost 65 per cent from tier two, three, and four towns. Our revenues are increasing because we have a steady growth in the number of customers being added.
Our net customer addition is between 8,000 -9000 per quarter. Having said that, there is a lot of work happening on the platform itself so that we can improve our experience for our buyers and suppliers.
As per recent reports, IndiaMART looks to add a credit facilitation offering on its platform to help small businesses. What is the aim behind offering credit facilities?
We were able to enhance our access to the markets by enriching our platform through enriched categories, good content and offering various other technology solutions that MSMEs need today. Besides facing other problems, SMEs are bereft of financial resources to sustain their businesses. Thanks to the technology that we have, we can monitor their behaviour. Hence, we decided we should also look at providing access to funding, finance to these businesses. We are trying to integrate a sustainable and effective solution on the IndiaMART platform to facilitate credit borrowing in simplified way.
Recently, IndiaMART has announced market expansion across India. Besides opening four new branches in Tamil Nadu, the company plans expansion across Gujarat, Maharashtra, Karnataka, and Kerala. How does the company plan to connect larger sellers to local buyers?
With businesses adopting digitisation rapidly, buying patterns have changed explicitly. To keep pace with the GDP contribution from the South, we had to move much faster so that we would be always in sync with the South. Two to three years back we realised buyers from smaller towns were not very well-versed in English. They either use voice search or their vernacular language. We implemented these interventions on our platform and today our buyers can search through voice in nine languages and almost in 180+ languages on-line. We have set up a dedicated service centre in Chennai to serve our tamil speaking TN customers at the moment, but we will expand it to service other southern state customers namely Karnataka, Kerala, AP & Telangana over next few quarters.
Clear detailing of products, their prices on the website, flexible marketing approach, strong SEO and AI-driven marketing algorithm help IndiaMART stand out in the clutter of B2B business. Also, we have been trying to make this platform as relevant for our suppliers and buyers and as functional as it needs to be, rather than throwing money on above-the-line media marketing, and channel marketing. Today we have almost 16 crore-plus buyers. We have more than 10% of India’s population registered on a B2B platform like IndiaMART and our repeat buyer traffic is almost 53%. Furthermore, with the adoption of AI, we aim to cross demographic barriers and make match-making happen across geographies and every aspect of buyer and supplier. Presently, we have almost 400 plus brands that are large enterprises and present on the IndiaMART platform, whether it is Toshiba, Carrier Aircon, Tata Motors, Tata Steel, JCB etc.
IndiaMART launched its campaign during the IPL season. How does IndiaMART plan its quarterly advertising spend?
Our entire investment has been in creating more contenton the platform and developing innovative solutions like cloud telephony, Lead manager, Payment solutions etc. We have 74 lakh suppliers on the platform and keep enriching their catalogues. Out of these 74 lacs suppliers 37% or so also buyers on the platform thus creating strong network effect for the brand.
On branding front we do such videos, mailers, multiple Social media interventions besides participating in various industry seminars, meets. Our sales and service team connect with almost 1mn suppliers either in person or over video meets, that’s the biggest brand building for us.
Which sector does IndiaMart plan to focus on in the following fiscal year?
We have 56 industries on our platform and we are a horizontal marketplace. Having said that, we cannot push any particular category or industry sector but keep working on multiple industries throughout the year depending in multiple factors including seasonality. But these things keep changing. During Covid we started focusing on pharma and medical equipment categories when the entire nation was in the need of medical products, facial masks,PPE kits, concentrators and various chemicals etc.
What are the challenges for India’s B2B sector and what’s the way to tackle them?
In China, internet adoption amongst businesses is close to around 80% or so. Whereas in India we are still less than 50%. So, there is headroom for B2B businesses to improve. Having said that, in the last few years, thanks to UPI, GSTand e-way bills a lot of things have simplified businesses across all demographics. Thanks tothe credit guarantee scheme, the government of India has offered a sizable chunk of loans that are given collateral free.
There are small teething issues where we have scope to improve things. But the biggest challenge is to make finance and funding available for businesses.
I’m very bullish about the way things are going to help our B2B micro and medium enterprises to a great extent. However, headwinds are there because of various global factors. We saw raw material prices going up, and inflation going up. But despite that, we continue to grow primarily because of some ease of policies and better consumption patterns. Thanks to PLI scheme there is lot of improvement in manufacturing sector and it will continue to improve further. I’m sure we will see a lot of improvement for our B2B businesses.