India’s largest online marketplace, IndiaMART represented India and its ecommerce success story at the United Nations Conference on Trade and Development eCommerce Week in Geneva. Mr Dinesh Agarwal (Founder & CEO – IndiaMART) and Mr Brijesh Agrawal (Co-founder and Director – IndiaMART) talked about what does it take to develop a successful digital economy in the developing world and its impact.
The duo was a part of multiple panels, along with other prominent international dignitaries and global industry experts. This included Mr Roberto Azevêdo (Director-General, World Trade Organization) and Dr Mukhisa Kituyi (Secretary-General, UNCTAD) who talked about why Governments . Together, these distinguished luminaries discussed in detail about how businesses can survive and thrive in today’s digital-first age, especially in the developing and least developed world. Dinesh and Brijesh also shared insights into India’s digital vision, and the key lessons other developing nations could take away from its ongoing digital transformation to stimulate their own economic growth.
Mr. Dinesh Agarwal said that how e-commerce could help in alleviating poverty in developing countries by enabling better business opportunities, e-commerce platforms had been playing a critical role in the development of India by democratising resources and opportunities, especially for the rural communities. He quoted a survey which showed how small Indian businesses using online marketing initiatives were likely to grow by up to 50% more than those businesses which remained offline. He also talked about how – despite the challenges – the internet remained a driver of positive change, empowering businesses and improving health care and education. Speaking on the benefits of digital economy, he said, “Platforms provide benefits for businesses of all sizes in developing countries. The smallest can enter the market and the biggest can access the most remote part of it.”
He encouraged the developing and least developed nations to build their own capabilities and said, “Too powerful platforms have always existed. But if we’re afraid of creating platforms then we’ll miss out on new technologies and innovation. If they get too pervasive, then we’ll deal with them.”
Another interesting comment made at the UNCTAD 2018 was about the need for sustainable development and digital growth, and the larger impact of the digital economy on how the global business dynamics played out. India, one of the fastest growing e-commerce markets in recent years, was a subject of much analysis in this regard.
Talking about the need for taking digital enablement to a larger number of smaller businesses across developing nations, Brijesh Agrawal, Co-founder and Director – IndiaMART, said, “The access to affordable high-speed data has been transforming the world. In India alone, the total number of internet users has grown 2X over the last eighteen months. The important thing, here, is figuring out how countries and businesses can use this dynamic in their favour.” Speaking on the impact of digital economy on the Service Sector, he said, “It is also critical to bring in some form of standardisation of services. Unlike the B2C products, comparing services in the B2B segment is not very easy, as all providers have their individual specifications. The quality of services offered needs to beat the customer expectations.”
Another key takeaway from the UNCTAD panel discussions was the need for a conducive countrywide framework which can enable and drive a digitally-led economy. India, for instance, has been creating a holistic, end-to-end ICT ecosystem for digital adoption through various government-backed initiatives, such as NPCI, Aadhaar, GST and private participation by companies like Reliance Jio. This focus on digitisation has been instrumental in the rise of digital commerce across the country. With the number of internet users in India expected to cross 500 million by June 2018, the conference talked about how businesses in developing nations can take advantage of the growing digitisation for more seamless global operations.
The digital opportunity for India and other developing nations is truly immense, and the UNCTAD 2018 impressed upon how to best tap into this unparalleled technological resource for ensuring a far-reaching socio-economic impact. “UNCTAD can help the developing world find synergies and make them learn from each other and from the developed world so that we do not end up making the same mistakes,” concluded Dinesh Agarwal.
IndiaMART represented India at the United Nations Conference on Trade and Development – eCommerce Week.Here’s a sneak peek inside the major happenings of the event.
“Too powerful platforms have always existed. But if we’re afraid of creating platforms then we’ll miss out on new technologies and innovation. If they get too pervasive, then we’ll deal with them,” @DineshAgarwal, founder and CEO of @IndiaMART tells #UNCTADeWeek. pic.twitter.com/MHPsnxLCos
— UNCTAD (@UNCTAD) April 17, 2018
After succesfully building up @IndiaMART for 22 years, @DineshAgarwal has this recommendation for #ecommerce startups in developing countries. #UNCTADeWeek https://t.co/8ZTZ6OTxuD pic.twitter.com/VWJi7RvEZs
— UNCTAD (@UNCTAD) April 18, 2018
If you missed the Facebook Live transmission of the #UNCTADeWeek high-level dialogue on the Development Dimensions of #DigitalPlatforms, you can listen to the debate at https://t.co/3Q6z1QHfJz pic.twitter.com/QHET2U3RKs
— ICT4D at UNCTAD (@ICT4DatUNCTAD) April 18, 2018
Great panel at #UNCTADeWeek on platforms role in delivering B2B services. Partucally valuable insight from @IndiaMART founders on building in country capacity versus going global. pic.twitter.com/6E8FPyrSvh
— Giles Derrington (@G_Derrington) April 18, 2018
@brijeshagrawal says for digital development to happen, 4 key issues must be addressed; access to the internet, availability of capital, adaptation of people to changing technology, & creating skillsets to use these technologies.#UNCTADeWeek #e4youth #ecommerce #DigitalEconomy
— UNCTAD Youth (@UNCTADYouth) April 17, 2018
“Platforms provide access.” Ongoing discussion at High Level Panel at #UNCTADeWeek on the role of #ecommerce platforms for #sustainabledevelopment with @DineshAgarwal of @IndiaMART pic.twitter.com/Yq4IeL0Ilg
— ICT4D at UNCTAD (@ICT4DatUNCTAD) April 17, 2018
“Standardise your services and take them online. Then you can provide services to companies everywhere around the world.” say Dinesh and Brijesh Agrawal of @IndiaMART at the UN @DineshAgarwal @ICT4DatUNCTAD #ecommerce #b2b #marketplaces #digital #platforms pic.twitter.com/Qepl8DuKAp
— Grow Global (@growglobal) April 18, 2018
It’s both! but 100% right that getting suppliers in country has to be starting point to build trust on part of sellers. Not like goods where same product serves all markets.
— Giles Derrington (@G_Derrington) April 18, 2018
Started the Ministerial Roundtable on digital impacts of sustainable development w/ @UNCTADKituyi, Pan Sorasak of #Cambodia, Wilson Tarpeh of #Liberia, @AKyambadde, H.E. Khoudia Mbaye of #Senegal, @brijeshagrawal of @IndiaMART, @Consint_DG of @Consumers_Int, pic.twitter.com/juUhMCn8Pu
— UNCTAD Youth (@UNCTADYouth) April 17, 2018
The head of the e-commerce platform, Dinesh Agarwal, is described as the Indian “Jack Ma”. At 49, he sees the future in pink, hoping that the purchasing power of the Indian population increases significantly in the coming years
Sitting on a chair in a hallway of the Palais des Nations in Geneva, where he is attending Unctad’s week on e-commerce, Dinesh Agarwal, 49, seems almost oblivious. Born in a Uttar Pradesh city into a modest family, he is however what many describe as the Indian “Jack Ma”. He is the boss of the IndiaMart e-commerce platform he created in 1996 in Noida, when the country had some 500 Internet users. Today, this platform, on which a million buyers and suppliers meet every day, is growing at a staggering 30 to 35% a year.
In 2017, the company earned net revenues of $ 60 million. “We work with five million small and medium-sized businesses. We have 55 million registered buyers. “The platform, he says, is 80% for B2B (business to business) and 20% B2C (business to consumers). 60 million products and services are sold and sold in 60,000 categories. These range from electronics and medical and pharmaceutical products to textiles and agriculture, to machinery, office supplies and financial services.
It’s only a beginning
The numbers are already impressive, but this is just the beginning. “We have tripled platform traffic in the last two years.” India has 450 million internet users (mostly via smartphones) and web-based commerce is worth $ 10 billion dollars a year, a figure still far from what is done in the United States and China.
“But the future is ahead. We may be ranked 100th in terms of GDP per capita, but we are more open than China. In India, the boss of IndiaMart prides itself, we remain open to the outside. “IndiaMart currently has no competitors worthy of the name. The Chinese giant Alibaba has only 2% market share in India. Amazon is not a competitor, its business is primarily towards consumers.
This Indian success story, Dinesh Agarwal, whose mother tongue is Hindi, is attributed in part to Rajiv Gandhi, prime minister in the 1980s who spoke of the need to study computer science. He became a computer engineer. Having started his career with CMC Company, a subsidiary of Tata, he spent a few years in the United States with HCL. But when he heard the Prime Minister’s speech on August 15, 1995, on Independence Day, he realized that his destiny was in India. When he creates IndiaMart, India “is a black box,” he explains. That’s where I wanted to show the real India to the West. ”
The challenges in India remain multiple. The first affects purchasing power, which varies considerably between the poorest and the richest. It is therefore difficult to find the right product lines. But Dinesh Agarwal is optimistic. The purchasing power of the population, he predicts, will increase by 2030. This will have a considerable impact. The other challenge is the infrastructure whose deficit is glaring. “In terms of airports, roads, electricity, we are not competitive. And we do not modernize such infrastructure overnight. ”
The language factor is also a stumbling block. “30 to 40% of Indians speak Hindi, 20% English, but we have between 20 and 30 other languages,” says the entrepreneur. In terms of distribution, IndiaMart provides services to suppliers through its 95 offices and 2000 employees across the country. It provides them with software and training to use the platform at best.
Several factors played in IndiaMart’s favor. Since e-commerce is highly dependent on trust, Dinesh Agarwal welcomes the implementation in India of the Aadhaar Biometric Identity Program, which benefited 90% of the population. This facilitates online commerce. In terms of payment, India has also made great progress with a local interbank system that allows money to be transferred at any time.
“The system is even more efficient than in Europe or the United States. Payments are immediate. We must not wait three days, “quipped the young millionaire. In India, the platform serves as a “deposit bank”. The buyer will see his payment made at the time of delivery and the supplier has the guarantee that his client has already paid. IndiaMart has also benefited from a recent law passed in Delhi in 2017 standardizing tax rates between different states of the country.
Finally, in the area of e-commerce, it is difficult to conceal the question of data. “We have a huge advantage over Eta
India is one of the fastest growing e-commerce markets in recent years. According to an eMarketer report, the projection for 2018 is a 23.5% increase in online sales. Much of this comes from the B2B sector, with its 1.6 million businesses, responsible for $ 800 million per year.
Despite the good numbers, according to Brijesh and Dinesh Agarwal – founders of Indiamart, India’s largest B2B marketplace – the service segment still has a lot to grow in a market that has similarities with Brazil. Both were presented on Wednesday (18) in panel at the E-commerce Week, organized by the UN.
Among the main challenges, according to them, is the standardization of services. “Unlike the purchase of products, it is very different for consumers to compare services in B2B,” said Brijesh Agarwal. “Each provider has a different specification,” he explained.
According to the businessman, the lack of an “identity of his own” makes the services offered in an unorganized way – one of the other problems that the sector needs to fight in India. “Customer expectations need to beat the quality of service offered.”
Other points cited by the founders, and who need special attention, are the lack of skilled labor, improvements in the quality of service delivery and better understanding of consumer behavior. “It’s a sector still under development, with much to discover,” concluded Brijesh.
For them, who founded an international marketplace, cross-border has become a reality. Today, services seem to gain more and more relevance in the digital world.
“[We’re talking about] downloading music, videos on demand and software,” said Dinesh Agarwal. “The software industry is the second most important in this segment. This is a great opportunity, “he said, citing Freshdesk, a support company, as a successful example.
According to Giles Derrington, head of Politics at techUK, who also participated in the panel, this recent change is a reflection of the advancement of technology.
“In the past, you bought a computer program in the box and installed it. It is not the type of product that creates connections. Today, there are those same services in the cloud, “he concluded.
As IndiaMART enters the 23rd year, I would like to thank you all for your constant support. When we started IndiaMART in 1996, it was a small set up with a 5 member team. Today, we are a large family of more than 3500 members and the best part is that our strength is not someone or somebody, but we ourselves – the family of IndiaMART.
When IndiaMART was started, Brijesh and I, we were salesmen by the day and developers by the night. We were the admin, we were the marketing, finance, HR and every function that you can think of. In the last 22 years, we have changed our business models and processes multiple times. So believe me, I still share that childlike excitement you feel for that every sale that you close, I still feel the pain of every ticket that has to be resolved, I still feel the pat on my back when you get a big brand on-board, I still know the effort that goes in creating a new product, I am also under pressure when your decision can make or break a situation.
What I also know is if we have to scale and become larger than what we already are, the largest online marketplace in India, then it’s not the 50 year old me who will take it forward but the young and creative you. It’s going to be your energy and ideas.
I firmly believe that an organisation is defined by its values and culture. And, our close knit relationships and our culture to take care have made it easier for us to achieve our goals, always. We have a habit to take care of our buyers, sellers and of each other. When 10 team members stand to donate one unit of blood and when we don’t think before helping one of our members in times of even their personal needs; it is this culture of ours that has made IndiaMART what it is today and what would help us make IndiaMART the company of our dreams.
And, dreams are made of smaller goals. In 1996 our goal was to somehow get that first client, then it was 1,000 customers then 10,000 then 1Lakh and now it’s creating a Rs 1,000 Crore company. Believe me, we are going to achieve it. My confidence doubles when I see this video. I feel the same excitement and craze in you as I had when I left my job in America and came back to India. After all, not everyone can think of replacing their CEO in the next 2 years. 🙂 That’s only the spirit of IndiaMART.
I am thankful to you all because just like family – you came, you saw my dreams and you made them your mission. And, I feel so proud that today you are creating your own missions.
Thanks for everything and believe me this is just the beginning. Our greatest achievements are yet to come.
So congratulations on this one and let’s brace ourselves for the future.
Founder & CEO
IndiaMART, India’s largest online marketplace, recently organized the annual SME Conclave 2018 in association with TiE Delhi-NCR at the Welcome Hotel Sheraton in Saket. The conclave featured several leaders from the industry sharing their views on the initiatives taken during Budget 2017, the impact of 180 days of GST on Indian SMEs, and the innovative financing options available for the sector. SME expectations from Budget 2018 were also discussed at the IndiaMART event, as was the future course of action for the industry.
The event brought together TiE’s extensive mentor base and IndiaMART’s vast buyer and seller network to create a strong support system which provides a platform for doing business easily, as well as for sharing business-related advice with the SME sector. Amongst those in attendance were prominent names including Rakesh Rewari, (Ex Deputy Managing Director & Member of the Board of Directors of SIDBI), Raman Roy, (CMD, Quatrro & Board Member, TiE Delhi –NCR), R Muralidharan, (Senior Director – Indirect Taxes, Deloitte Haskins & Sells LLP), Ranjit Oak (Chief Business Officer – Corporate Travel, MakeMyTrip), and Anshuman Khanna (Principal, IvyCap Ventures).
Commenting on the conclave, Dinesh Agarwal, Founder & CEO, IndiaMART, said, “2017 was a crucial year for the Indian economy. Large-scale tax reforms like GST and progressive digitally-led business policies enabled the country to move up to the rank of 100 in the Ease of Doing Business index. Despite GST being a great step towards a unified tax structure, the past one year, however, has been challenging for Indian SMEs. I recommend to set up an empowered committee which can represent the Indian SMEs and their interest as a whole. Through this conclave, we want to reach out to these SME owners and help them in understanding the new tax regime better, as well as to assist them in accelerating their access to technology. Our aim is to help SMEs make the digital transition and fulfill the dream of nurturing tech-enabled, world-class enterprises within the country.”
Raman Roy, Quatrro & Board Member – TiE Delhi-NCR, said, “FinTech will grow in a big way in the country. I am amazed to hear that a service like ‘Pay with IndiaMART’ exists, which provides instant payments to businesses. There is no such service available globally. Such is the power of innovation in India. These are the kind of products and services that we need and would change the eco-system.”
Rajiv Chawla, Chairman – IamSMEofIndia, said, “In this budget, the government must focus on easing business operations for the MSME sector by providing subsidies on raw material procurement. Doing so will not only help in bringing down the cost of day-to-day operations for MSMEs, but will also enable them to sustainably scale their production output and drive greater growth.”
Rakesh Rewari, Ex-Deputy MD & Member of the Board of Directors – SIDBI, added, “The global business community is looking at India as an emergent business hub because it has the largest and most diverse domestic market in the world. The time is right for aspiring Indian entrepreneurs to take calculated risks and venture into the market with their own business ideas. But for them to be successful, it is important to create a thriving ecosystem that provides the requisite support needed to drive growth and scale. Entrepreneurs also need to understand the importance of perfecting their business plans before they pitch to prospective investors. India needs more businesses which generate lucrative employment opportunities for its burgeoning workforce. The MSME sector, with the right support, can give the Indian job market a major boost.”
While GST was aimed at enhancing the Indian economy, the transition from being an informal economy to a formal one has given rise to significant challenges. Addressing them requires the government to initiate substantial modifications in the upcoming Union Budget, so that Indian industries and SMEs can reap the maximum benefits from the initiative. IndiaMART’s latest endeavor ties-in with its long-term commitment to empower Indian SMEs in collectively understanding and preparing themselves for the future, and to power India’s economy to new heights.
E-commerce firm Indiamart is planning to launch its initial public offer for which it will start the process next fiscal, a top official of the company today said.
“We will go for IPO soon. Basically, we are not in need to raise external money but we want to give an exit route to existing investors. Most of the equity sale will happen in secondary market,” Indiamart founder and CEO Dinesh Agarwal told at TiEcon Delhi NCR.
Existing investors of Indiamart include Intel Capital, Amadeus Capital, WestBridge Capital and Quona Capital.
“As a promoter I am looking for dilution of some stake and some investors like Intel Capital may look for partial sale of stake. That is the basic reason (for the IPO),” Agarwal said.
Indiamart started bringing small and medium enterprises (SMEs) on its platform to help them generate sales.
He said the company started making profits in last fiscal after continuous focus on expansion.
“Now we have also brought big brands like Tata, Mahindra & Mahindra, Godrej and others on our platform. We earned average revenue of Rs 30,000-40,000 per SME annually. From big players, our average revenue is Rs 3-4 lakh,” Agarwal said.
The company claims to have 40 lakh SMEs and over 100 big brands on its platform. It does not sell any product directly but provides business leads to companies.
“Our revenue has been growing in the range of 30-40 per cent annually. With big brands coming and launch of some new services, we expect our margins to increase by around 10 per cent,” Agarwal said.