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Dinesh Gulati, Indiamart’s chief operating officer (COO) sheds light on the B2B marketplace’s evolving business model, the nearly three-decade-long journey of adoption and long-term vision
New Delhi: When it started in the 1990s, Indiamart opened up the world to Indian businesses wanting to expand their business beyond boundaries.
The online B2B marketplace for business products and services offered a platform for buyers and sellers across product categories and geographies in India to connect and grow.
Many internet-driven businesses launched back then perished as they weren’t able to adapt to the changing business and technology environment. But 28 years on, Indiamart continues to exist and adapt.
In the third quarter of the financial year (FY) 2024, the company’s consolidated revenue from operations was Rs 305 crore, registering a year-on-year (Y-o-Y) growth of 21%. It also registered traffic of 272 million and unique business enquiries of 23 million, representing a Y-o-Y growth of 9% and 4% respectively. Supplier storefronts grew to 7.8 million, an increase of 5% Y-o-Y and paying subscription suppliers grew to 2,12,000 representing a net addition of 1,826 subscribers during the quarter, according to its latest financial results.
In an exclusive interaction, Indiamart’s chief operating officer (COO) Dinesh Gulati sheds light on the business model, the nearly three-decade-long journey of adoption and long-term vision.
Edited Excerpts…
What was the idea behind a platform?
In 1996, when international demand for Indian products was on the rise and internet penetration was increasing in overseas markets, reliable sourcing information on export-oriented Indian small and medium enterprises (SMEs) either online or offline, was hard to come by. This was because most local SMEs did not have the resources to reach global buyers.
Recognising this vacuum, we initially started building web pages for Indian businesses, and soon, a search-enabled web platform was envisioned to link Indian SMEs easily with customers worldwide. Today, we have 78 lakh suppliers and 18 crore buyers across 98,000+ categories and over 10 crore products and services on our platform.
Please shed some light on the company’s business model.
Indiamart’s business model is built on simplifying business processes, offering a two-way online discovery marketplace. We emphasise the equal opportunity to access the market and technology. Operating on a subscription-based model, our platform, as an online marketplace and conversational commerce hub, differs from traditional e-commerce platforms. We leverage disruptive technologies to provide a seamless digital experience for buyers.
Conversational commerce empowers consumers to make shopping decisions, purchases and transactions through messaging apps and other conversational technology.
How has the journey been?
Since my tenure began, it has been an all-round contribution concerning product, technology, customers, revenue, profitability, people and culture. Our platform has grown from 10 lakh to 78 lakh suppliers, including 2.12 lakh paid sellers. We’ve further prioritised customer connections, engaging in 1.5 lakh physical meetings monthly. We also invested in our talented team and have grown to a family of 5000, fostering continuous learning and development.
By being an early adopter of Artificial Intelligence/Machine Learning (AI/ML), and enhancing offerings for both sellers and buyers, today we are not just a product or price discovery platform but have also become a conversational commerce hub, facilitating 45 crore conversations last year on the lead management system.
Please tell us about your work with MSMEs.
We provide small businesses with an open marketplace where they can connect with buyers and sellers from anywhere in the world and grow their business online. We have successfully integrated tier 1, 2, 3, and 4 towns, effectively democratising business opportunities for small enterprises originating from less prominent regions.
The company was listed in 2019. What has changed since then?
Notable changes included heightened recognition, visibility, and credibility in the market. The IPO oversubscribed over 36 times, which elevated the company’s standing and attracted keen and talented candidates and partners.
This increased visibility and also contributed to attracting more customers. Nevertheless, we perceive the IPO as a significant milestone and not the destination.
Following our listing, we seized enhanced opportunities to assist a broader community of MSMEs and remained dedicated to making a positive impact on society through our corporate social responsibility (CSR) initiatives.
Where do you use AI in services?
The AI-based matchmaking technology on the Indiamart platform effectively matches buyer needs to the most suitable suppliers, ensuring seamless connections beyond the restrictions of location or size of the business. Our platforms received over 8 crore monthly visits, with 4 crore business enquiries delivered through our AI & ML matchmaking technology every month in 2023.
Being a conversational commerce platform, our lead management system, which enabled 44.6 crore conversations last year, played a crucial role in behaviour mapping, trends analysis, and identifying optimal solutions for businesses, contributing to our continuous growth strategy.
Beyond this, AI & ML are also leveraged in various platform aspects, such as multilingual search results and intelligent cataloguing for easy AI-powered product image editing. Overall, we keep enhancing our tech solutions to improve user experience on the platform.
How was 2023 for you in terms of revenue and sales? Please highlight the most sold/bought category.
In 2023, our journey was marked by a dynamic mix of opportunities, setbacks, and invaluable learnings. Despite the challenges, we achieved commendable success in terms of revenue, witnessing an impressive overall growth of approximately 23% Y-O-Y on a standalone basis—for the nine months of FY2024.
Since we operate on a subscription-based model rather than a commission-based one, our online marketplace offers a unique approach.
To what do you attribute the jump in revenue?
Our revenue increased significantly by 21% in Q3 2023, mainly owing to increased client payments. We credit this success to our emphasis on improving the customer experience and growing our presence across cities. Looking ahead, we predict a consistent growth trajectory every quarter. We are dedicated to providing better value to our customers while also sustaining profitable growth and cash flows and capitalising on market possibilities for further expansion.
Do you have a presence outside India?
We get approximately 15% of our traffic from overseas. It indicates growing export-related business opportunities that are being served by over 6,000 trusted export-oriented suppliers registered on the platform under the dedicated export solution called Indiamart Verified Exporter.
In this solution, we provide registered businesses with exclusive access to Export BuyLeads and TrustSEAL verification, which adds a layer of credibility to Indian exporters for foreign buyers.
What percentage of sales are driven through your mobile application?
Mobile devices account for around 80% of our traffic, but determining the precise proportion of sales from our mobile application is difficult. Many consumers interact with our services across many channels and platforms, even beyond the platform.
What will be your focus going forward?
Looking ahead, our strategic focus will be on providing holistic solutions, particularly focusing on fintech and logistics.
Our long-term vision includes offering solutions for essential business functions such as accounting and invoicing, inventory management, distributor management, payroll, order management, receivables management, procurement management, and tax compliance. We are actively exploring opportunities for both organic and inorganic investments to enhance our capabilities in these areas.
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