E-Commerce is changing the way business in being done and is opening new opportunities and channels. But for succeeding in online business one needs to understand the challenges and best practices.
Remember May 2014, when a pizza chain got into trouble with the Mumbai police for using a drone for pizza delivery without permission? That was a marketing gimmick gone wrong. Following all the media attention, the Mumbai police started grilling the pizza chain about using drones without prior permission.
Less than five months later, in October 2014, the DGCA (Director General of Civil Aviation) banned civilian/non-governmental use of unmanned aerial vehicle (UAV) and unmanned aircraft systems (UAS) without permission from a set of security authorities including the Ministry of Home Affairs (MHA). The drone market is still infantile so investors weren’t anyway rushing to fund it. Then this directive came along and made life more miserable for those unfortunate enough to fall in love with drones.
ideaForge has been doing pioneering work on drones since 2007 and has raised $10 million from Infosys, Walden Riverwood Ventures and IndusAge Partners so far. “It was difficult trying to get funds for this. We started when drones weren’t a buzzword,” says Ankit Mehta who is cofounder and CEO of ideaForge.
Life After The Drone Ban
Lt Commander (retired) John Livingstone is the CEO of Noida-based Johnnette Technologies. When the drone ban kicked in, Livingstone and a consortium of drone industrialists put together and submitted to DGCA 29 pages of guidelines for using drones. This was in February 2015. That draft may well have been the harbinger to the draft law the DGCA proposed in April 2016 for civil usage of UAVs — a 9-page air transport circular detailing particulars like weight categories, what weather and where to fly these unmanned pieces of technology.
The draft raised some hopes of finalising drone laws. But not for long. “The draft has been in trap mode,” says ideaForge’s Mehta, who was part of the Ficci committee set up by ex-home secretary G.K. Pillai, a month after the draft law was formed. The committee’s purpose was to get industry recommendations and feedback on the drone bill. “The bottleneck is not with the DGCA but with the MHA. They are too weary of doing anything that might come back to bite them,” says Mehta.
According to Karan Kamdar, founder and president of the Indian Drone Racing League (IDRL), and CEO of 1 Martian Way Corp, the ban is being lifted only in bits and pieces. The likes of Kamdar and Gaurav Mehta, founder of Quidich, provider of drone services for aerial cinematography, say, to make sure there are no run-ins with the law, they get approvals from the police and regulators, and try to adhere to the draft as much as possible.
“However, this is tough for smaller drone startups and their clients,” points out Quidich’s Mehta. For instance, R2 Robotronics was a startup that even piloted some of their drone technology for the defence ministry. Nothing came out of it. Aman Singh, co-founder of R2 Robotronics says they are now working with the New Zealand government. Singh says he is unsure about the way the Indian government has dealt with this sector. “We do not know by when the industry will actually open up,” says Singh.
Indian Drone Market Snapshot
The drone market in India is growing, and can grow faster if proper regulations are put in place. T.V. Mohandas Pai’s family fund, 3One4 Capital, has backed SwarmX, a drone startup. “The market for manufacturing civil drones in India is under $100 million, growing at a CAGR of around 21 per cent today compared to the US where it is over $1.5 billion, which means that there is huge growth potential in India,” says Pai. While the demand for drones is continually rising, more clarity on the laws and implications will help this growth by a great margin, he adds.
Most of the drones used in India are from China (DJI is arguably, the global market leader). Israel is another leading manufacturer; Livingstone says that many Indian companies will make the parts for the drone, which are then assembled in Israel and sold across the world.
Surprisingly enough, India has over 35 Indian drone startups either manufacturing drones, developing software related to drones or companies providing some sort of drone service. Prices of drones vary with its capabilities from toy drones at Rs 5,000 to very sophisticated ones crossing Rs 20 lakh.
“Drones and UAVs have seen huge growth in the past one year. We have more than 300 suppliers for this category and have seen a 15x jump since last year,” says Sumit Bedi, VP, marketing at IndiaMART.
Imagine how much faster the market would grow if it had clear regulations. Anirudh Rastogi, managing partner at law firm, TRA, who consults drone companies, says “The drone activity we currently see in India is just a fraction of what is possible given an enabling regulatory environment. Currently even test flights for research and development are not easily doable, and some of our clients prefer other jurisdictions to carry out these activities.”
How Long Will It Take?
Rastogi says, “There are serious concerns holding up the drone regulations — national security and safety of the airspace for aviation. However, while other jurisdictions have since introduced regulations, India continues to struggle to address these concerns.”
That’s especially ironic because drone laws in a smaller country like Sri Lanka were ratified in October 2016. And Sri Lankan UAV companies like the one headed by Tilak Dissanayake are ready to make the most of it.
Dissanayake says, “We will initially license the drone for manufacture in Sri Lanka, and will certainly manufacture under license in other countries as well since our plan is to build and sell 2-4 million units worldwide.”
Which means companies from smaller markets have a clearer path to success than those in a larger market like India. While running a diverse country like India may call for weary tiptoeing around laws that affect socioeconomic sensibilities poles apart, too much weariness means the innovators will only lose hope and faith.
A news wire had reported earlier this month on reasons behind the hold up. “The issue of tracking drones is a very major technological challenge. How does one track whether a particular drone is bonafide or rogue. We are working on solving that technical aspect,” the news report quoted Civil Aviation Secretary R.N. Choubey.
“Other countries have figured this out, they are just making up excuses,” says an industry insider. Livingstone has a more practical approach to end this wait. “The PM’s Office must move things along. They are the only ones who can at this point.”
‘Eliminate what doesn’t help you evolve’ – at IndiaMART, we have always followed this at work. But this time we thought to take this a step ahead and follow this for our body. So the IndiaMART management team decided to change the dynamics of the board room by detoxifying their bodies through InnerChef’s Pure+. As Rajesh Sawhney calls it ‘This happens to be the first detox board meeting!’ and then he filled our cafeteria with all the healthy stuff. 😉
“It was Rajesh’s idea and we thought it can’t get better than this. So all of us decided to follow InnerChef’s detox plan for a day. After all, our busy corporate life doesn’t allow us to do much for our health,” said Dinesh Agarwal, Founder & CEO IndiaMART while sipping his Cleanse+ Watermelon & Mint Juice.
Rajesh Sawhney, a board member with IndiaMART and the co-founder of InnerChef said, “The detox plan is carefully crafted by our team and helps to reboot and revive an over-worked body. We are all so busy that we often forget to think about our body. A Pure+ meal helps in doing just that. I plan to take this to other organisations also.”
A board meeting is generally thought to be monotonous but today our management tried to reinvent it by revisiting their daily routine and changing it for something healthy.
We caught our Co-founder & Director, Brijesh munching a bar and when we reminded him about the resolution he had taken in the morning, he just laughed and said “Oh! I am on my cheat diet. I thought it’s going to be a tough day ahead but now I feel we all should do it more often. The best part is that they have taken care of my cravings too. So, while I might not be able to have sweets, I have this healthy granula bar. It’s a good feeling and I think everyone should press the reset button once in a while to revive their body system.”
At the end of the day, it looked like with the detox diet our board members had a de-stressed meeting today as everybody walked out with happy and healthy faces.
एक बॉस जिससे कोई कर्मचारी खौफ नहीं खाता| क्यों? क्योकि आज तक उन्होंने किसी को निकला नहीं| उनके सहकर्मी उन्हें डीए के नाम से सम्बोधित करते हैं| जी हाँ, छोटा सा यही परिचय हैं ऑनलाइन कारोबार करने वाली कंपनी ‘इंडियामार्ट’ के संस्थापक 46 वर्षीय दिनेश अग्रवाल का| पेश है, उनसे संजीव कुमार झा की बातचीत के अंश…
“IndiaMART is the Google for business needs” – Sirin Sam, Head-Marketing & Communications, Finolex Industries.
Finolex is India’s leading manufacturer of PVC-U Pipes & Fittings. The company’s pipes & fittings are available in a vast range of sizes, pressure classes and diameters for agriculture, housing and industrial applications.
“Over the years, my business model was channel driven but we have recently realised the importance of going online. It was a humongous change for us as an organisation but the hand-holding by IndiaMART was great. We are able to reach a much wider audience base through IndiaMART then we could have reached with any other platform,” said Sirin.
“If I have to draw a parallel of IndiaMART then it is Google. We’ve increased our investment with IndiaMART due to the phenomenal response that we have received. I will give IndiaMART a 10 on 10,” he added.
“IndiaMART is the perfect platform to tap the new age consumers and acquire new customers! ” – Sorabh Agarwal, Executive Director – Action Construction Equipment Ltd.
Action Construction Equipment Ltd. India’s Largest manufacturers of Mobile Cranes and Tower Cranes. Other product range also includes Forklifts, Loaders, Vibratory Rollers, Truck cranes, Crawler Cranes and Agri Machinery.
“Traditionally business happened one-on-one but soon we realised that the world is changing and we have to move online. We unanimously agreed to go ahead with IndiaMART. We’re getting some good number of enquiries, the good part is that now the enquiries are coming from new customers,” said Sorabh.
“The team is responsive and supportive. I would rate IndiaMART at least 9 out of 10,” he added.
As venture capital slows down, early-stage entrepreneurs and those looking to do something on their own are likely to turn wary. But anybody who studies entrepreneurship will likely find that passion and patience have inevitably trumped money in determining the success of a venture. Money is often a catalyst. But there are also some who think venture funding is a bane, that ultimately, success is more about you and the problem you are trying to solve.
Timing the VC entry
Some took funding many years after their founding, and when they felt the money would help them address a particular business opportunity quickly. IndiaMart, the online marketplace that assists manufacturers, suppliers & exporters to trade with each other, did so when it found the domestic market growing rapidly. The company, founded in April 1996, was for a long time focused on the export market. “In the late 1990s and early 2000s, net penetration in India was not great. But from 2008, the domestic business started to outgrow the export business,” says founder & CEO Dinesh Agarwal. At that point, IndiaMart raised funds from Intel Capital. It later raised money also from Amadeus Capital, Quona Capital, Westbridge Capital, and BCCL, publishers of The Times of India.
“In the past 8 weeks, we have been receiving at least 25 enquiries per week and as many leads” – Yagnesh Buch, DGM Marketing and Corp Comm., KSB Pumps Ltd.
KSB, is a German multinational engaged in manufacturing & sale of centrifugal pumps, high pressure multistage pumps, submersible & monobloc pumps, Industrial GGC valves for Energy, Oil, Industry, Water, Waste Water and Construction segments.
KSB Pumps realised that the customers today are online and hence felt the need of taking there on the internet. “The fastest method for a buyer to discover a seller or a vendor is through the internet. IndiaMART fitted the bill because it allowed online discovery and offline assistance,” he said.
“I would rate them as high as 8 – 8.5 for their promptness. Kudos to team IndiaMART,” he added.
IndiaMART, India’s largest online marketplace has announced its entry in the payments space to enable over 3 million sellers on its platform. Addressing the bottleneck of trust deficit for the SMEs, the company has launched its buyer and seller protection program which will enable the sellers to remain free from the concern of payment risk, and assure the buyers that they will receive exactly the product or service they expect before the payment is made.
For any marketplace, effective payment facilitation is the most aligned service as it facilitates the purchase cycle. And with more than 14 million monthly business enquiries being generated from around 35 million registered buyers, it made sense for the company to offer a service that can help buyers and sellers to safeguard their business deals.
Dinesh Agarwal, Founder & CEO of IndiaMART said, “Bottlenecks like trust deficit & lack of credit continue to hold back the growth potential of our SMEs. Being at the convergence of e-commerce, payments and finance we have a larger plan to address these areas and this is the first step under the umbrella of initiatives like escrow services, payment gateway, invoicing and receivables management and SME financing. There are more than 50 million SMEs in India and our vision is to enable ease of doing business for them. With this buyer & seller protection program, we are taking our first step in that direction.”
The company launched the pilot project in January 2017 and has seen a week-on-week growth of 100%. More than 10,000 buyers and suppliers have already registered for it. The company has partnered with ICICI Bank for providing RBI approved escrow account management service.
This is not the first time that the company has ventured into payment solutions. The marketplace had launched ABCpayments.com in 2005 when it was an export oriented platform. “In 2009, we pivoted towards the domestic marketplace model and after achieving scale for 5 years we again decided to work towards payment facilitation. After bringing Lizzie Chapman, Co-Founder & CEO of Zest Money, who was then the Executive Director of DBS Digital Bank, on our board, we were looking for like-minded partners. That’s when we managed to get support from Quona Capital that invests in financial technology space. With such experience, we are thus very well placed in venturing into payment facilitation. We facilitate business worth INR 500 Billion. Payment solutions have the potential to double our GMV as it will enhance customer satisfaction and thus increase stickiness on our platform” Dinesh added.
In 2014 realizing the efficiency in the online payments system, IndiaMART developed its own robust payment platform (pay.indiamart.com) to collect the subscription amount from its paid customers. “More than 90% of our revenue and 60% of the transactions are through online payment modes which were earlier through cheques.” shared Dinesh. These numbers depict the changing SME mindset and the growing acceptance for the digital payments among Indian SMEs which prompted IndiaMART to foray in payment facilitation.