Rising above adversities: What Indian businesses and MSMEs learned from 2020 and how they aim to kickstart 2021 | YourStory


The year 2020 was tough for Indian businesses and MSMEs. The COVID-19 pandemic changed the rules of the game, forcing entrepreneurs to find new ways to thrive and survive. As we step into 2021, SMBStory lists out some key learnings by entrepreneurs and their vision for 2021.

For generations, most Indian businesses stuck to a straight, simple, and convenient way of running their operations.

Though the startup ecosystem emerged in the early 2000s and is much younger than the traditional, family-run business setups, according to the global innovation mapping and research company StartupBlink, Indian startups globally ranked 23rd among 202 countries, based on their strength. 

But what has made the startup culture more favoured over decades-old established companies?

The answers can be found in faster digital adoption, easy access to funding, better infrastructure, larger spending potential, and so on. But the crux lies in innovation. 

Indian MSMEs and other larger businesses have traditionally operated against the flow of the changing times, which led to many of them operating out of the comfort zones, but the coronavirus pandemic has forced them to shift gears. 

The worst-ever global health emergency in recent times, COVID-19 has proven to be highly unpredictable. From the start, no business was either prepared for such a scenario or was aware of measures that needed to be undertaken to sustain themselves.

When the virus reached India’s shores in January 2020, businesses started to suffer, and post the announcement of the lockdown in late March, when all human activity came to a standstill, businesses also had to face a hard shutdown. 

Shops closed, factories shut, imports halted, and exports banned; no entrepreneur would have been prepared for such a disruptive scenario. 

The time was tough, and immediate measures were required to survive the lockdown. Indian MSMEs and small businesses stepped up their game by pivoting, innovating, and moving their operations online.

The pandemic taught major business lessons throughout the year. Even though entrepreneurs changed their conventional ways and adapted, some gaps and challenges still need to be addressed.

Greeting 2021 with open arms, SMBStory has listed out some of the key learnings from 2020 and how Indian MSMEs and entrepreneurs are looking at the way ahead in 2021. 

Government schemes helped Indian MSMEs survive

In May 2020, during the announcement of a COVID-19 related economic package, Prime Minister Narendra Modi first mentioned his vision of an Aatmanirbhar Bharat (self-reliant India). Sparking enthusiasm among entrepreneurs, he said in his speech,

“COVID-19 phase has taught the nation that we must make ‘local’ the mantra of our lives. Global brands that are there present today were once local; they became global when people started supporting them. Hence, starting today, every Indian must become vocal for local.”

This came as a much-needed push for the Indian MSMEs and large businesses.

Finance Minister Nirmala Sitharaman rolled out a slew of initiatives under the Rs 20 lakh-crore Aatmanirbhar Bharat stimulus package. Of the 15 schemes announced by the FM, six were for MSMEs. Three policies that stood out were the Rs 3 lakh crore collateral-free loan scheme, the Rs 20,000 crore subordinated debt for MSMEs, and the Rs 50,000 crore equity infusion through the Funds of Funds (FoF). The government also tweaked the definition of MSMEs to include a larger pool of companies to benefit from the sector. 

Ashok Rajpal, Founder of electronics brand Ambrane, says that the government initiatives have lent a helping hand to MSMEs by bringing various schemes to the fore. He says, “The national Ease of Doing Business Policy has put the onus on bureaucrats and has asked for justifications on compliance requirements that have been placed on the businesses for a quite long time. The finance minister also said that the ‘Aatmanirbhar Bharat package shall not be just a financial package, but a reform stimulus, a mindset overhaul, and a thrust in governance.’”

Apart from offering monetary relief, the government also encouraged Indian entrepreneurs to grow technologically.

According to an IBEF report, in September 2020, India moved four places up to reach the 48th rank, breaking into the list of top 50 countries in the Global Innovation Index (GII) for the first time. This shows that the Indian businesses and MSMEs, which strived to adapt to technological advancements, have moved upwards despite facing disruptive times. 

Key 2020 takeaways for Indian businesses/MSMEs

The year 2020 has proven to be a learning curve for everyone. For entrepreneurs, getting back to normalcy was a hard nut to crack, and the two major learnings that they aim to implement in 2021 are: managing cash better and digital innovation. 

Umar Akhar, Founder of Bengaluru-based Koskii, says every entrepreneur must increase efficiency and manage cash better. “As entrepreneurs, we are always very optimistic and leverage business as much as we can for growth. Due to the pandemic, we will be cautiously optimistic and ensure that we have enough resources to sustain in an event like this,” he adds.

Koskii, which was predominantly present in the offline space for women’s apparel and occasion wear, took the opportunity presented by the pandemic to implement automation and artificial intelligence in the procurement processes to get the right product to the right place at the right time.

The entire software development was done during the pandemic and has resulted in significant improvement in efficiency and reduced the company’s inventory holding by 40 percent. The company is now able to execute the same tasks that it did pre-pandemic, with 40 percent of the team size. 

Koskii focused on selling online during the pandemic and its online gross revenue — which was not very significant earlier — has grown 5x in the last few months. 

Seven-decade-old brand Cycle Pure Agarbathies also leveraged its online business model to provide products at consumers’ doorstep through its own portal. It also launched a mobile-based application “Pure Prayer” to connect devotees to the divine.

Dinesh Agarwal, Founder and CEO of IndiaMart, says India received a boost in manufacturing capabilities during the pandemic. This rise of internet adoption and the strong focus on making India Aatmanirbhar seems to be a promising long-term trend that will help in boosting the overall economy.  

Ecommerce: an upward trend for businesses

The coronavirus pandemic made the SMEs realise that they needed to adopt technology and constantly power themselves with digital tools to survive and thrive.

Rajneesh Kumar, Chief Corporate Affairs Officer of Flipkart Group, says the pandemic has helped MSMEs understand the potential of technology and ecommerce. He says, “The aftermath of the pandemic has had a multi-sector impact. MSMEs, the backbone of India’s economy, faced severe disruptions, and the pandemic became a call to accelerate reform and growth for them. MSMEs need to use digital tools and technology, they have to modernise, and update themselves with digital processes.” 

Ashwini Malhotra, Managing Director of one of India’s leading custard brands Weikfield, also says 2020 saw a huge spike in online demand, especially through ecommerce platforms. 

Jagjeet Harode, Head of Marketplace, Flipkart says that in 2020, ecommerce played an even more essential role as businesses re-evaluated their operations, emerging as a preferred channel to connect with consumers nationwide. 

Since the nationwide COVID-19 induced lockdown, Flipkart has seen an increased interest from MSMEs and sellers to onboard the platform. He says there was close to a 90 percent jump in sellers joining Flipkart, especially in the second half of 2020 (July- Dec), once the market opened up, as compared to the same period last year.

These sellers came from Tier II and III regions such as Tirupur, Howrah, Zirakpur, Hisar, Saharanpur, Panipat, and Rajkot. They primarily catered to categories such as household needs, women’s ethnic wear, grooming, home decor, toys, and school supplies. 

Another strong trend that has emerged out of the pandemic is that an increasing number of businesses are adopting the direct-to-consumer (D2C) business model. 

The D2C business model helps in creating stickiness and establishes customer-centricity, according to Ashutosh Singh, Co-founder of D2C FMCG band, Yayy! Naturals. He says, “Millennials don’t stick with brands, they stick with a cause, which in our case is to make products in a sustainable manner.”   

Ashutosh believes that interacting with customers through the brand’s social media platform helps in creating an indelible connection with the consumers.  

Digital adoption paves the way

Cloud adoption has been one of the biggest enablers for SMBs. Harish Vellat, Country Head – Small, Medium and Corporate Business, Microsoft India says that the technologically advanced SMBs showed more business resilience since remote working allowed them to continue being productive in a secure environment.

Recovering from the crisis, tech-enabled SMBs can now focus on optimising their operations, reimagining their businesses, and transforming products or services with the power of advanced technologies.

“There is enormous opportunity for SMBs to grow and scale in 2021 with the power of technology, and Microsoft is committed to support them in achieving more,” he adds. 

Tejas Goenka, Managing Director of Tally Solutions, believes there is a lot of potential for investments in basic infrastructure and communication. He says even though India has seen rapid digital solutions adoption among MSMEs in recent years, there is scope for a lot more.   

He says, “Businesses will need to look at digitising several processes, allowing them to have better control over their business in a largely uncertain future. Investments, especially in core business systems like accounting and inventory management systems, will bring greater visibility and control.”

He concludes that investments in running 24×7 businesses through ecommerce, and in systems that enhance coordination, will increase.

The long road ahead

The last year has been undeniably tough for Indian SMBs, which had to prove their resilience and their willingness to adapt to change. However, there’s still a long road to traverse.

Vineet Agarwal, President of ASSOCHAM, says while organised and large businesses have shown a smart recovery in the midst of COVID-19, the bounce-back among MSMEs has not been commensurate. He says,  “With more and more people learning to manage their affairs safely, recovery would go deep down the value chain.”  He also believes that while sectors like transportation, hospitality etc, will see recovery in 2021. MSMEs would need continued hand-holding by banks, their large customers including PSUs, and forbearance by regulators to smoothen the creases.  

Nipun Gupta, of Springfit Mattresses, says one of the ways the government can bolster MSMEs is by calculating the creditworthiness of small businesses using software, rather than having the staff make these decisions. MSMEs can attract large-scale foreign investment, which is needed under present circumstances to boost the economy.

Top bets! Laurus, IndiaMART see biggest jump in consensus price target | Economic Times

Economic Times

Diagnostic companies, drug makers and information technology companies have seen the biggest increases in stock target prices by analysts after their September quarter results. Banks and public sector companies have seen the biggest target price cuts, according to an analysis of BSE500 companies tracked by at least five analysts. Majority of the target price increases have come on the back of strong earnings growth in the quarter. For instance, the consensus target price for Laurus Labs has increased by 99.8 per cent to Rs 361.86 after the company registered a four-fold jump in consolidated net profit to Rs 242.3 crore in the September quarter.

The consensus target price for IndiaMART NSE -0.24 % InterMESH, Somany Ceramics, Thyrocare Technologies and Wipro has increased by 31-96 per cent. Cyient, Persistent Systems, Coforge, KPIT Technologies, Infosys and TCS increased by 22-28 per cent. “IT companies reported record margins and growth outlookalso improved… Diagnostic companies gained because of Covid-19 testing and their operations were not impacted by the pandemic,” said Abhimanyu Sofat, head of research at IIFL Securities.

“The September quarter earnings season was good as the economy was rebounding and there was stocking ahead of the festive season. The true story of recovery will be known by January,” said Sofat. PSU banks and other public sector units are among those with biggest target price cuts. Indian Bank, Edelweiss Financial Services, Union Bank, Punjab National Bank, NMDC, and BHEL saw their consensus target prices being trimmed by 5-24 per cent.

IndiaMART sues Justdial’s Jd Mart over copyright infringement claims | inshorts


Online B2B marketplace IndiaMART in November sued Justdial in the Delhi High Court alleging that it copied the website compilations for its online marketplace, Jd Mart. Justdial called IndiaMART’s allegations “baseless” and even accused them of illegal activities. The court granted interim relief to IndiaMART by staying the launch of Jd Mart and ordered searches on Justdial’s premises.

Delhi High Court orders investigation into alleged data theft by Just Dial | Economic Times

Economic Times

The bitter competition between India’s two oldest online platforms – IndiaMART NSE -0.24 % and Just Dial NSE 5.32 % – has now reached the court.

Delhi High Court has ordered an investigation into an alleged data theft by the classified search company Just Dial. Based on a case filed by India’s oldest e-commerce platform IndiaMART, the court last week appointed three local commissioners to reportedly survey the Just Dial premises along with local police and IndiaMART representatives and submit a detailed report to the court.

The court has also restrained Just Dial from using the word JDMART.

Shares of Just Dial have rallied nearly 60% since October 16 after it showcased its business-to-business (B2B) specific offering called the JD Mart. With JD Mart, the company will look to enter B2B classified space and compete with IndiaMART.

India Mart has alleged that Just Dial has indulged in slavish imitation of its content which runs into several thousands of pages and even copied the design and presentations of its customers.

According to sources aware of the development, the Delhi High Court has ordered that the local commissioners make an inventory of all the copies of the database comprising the Just Dial website, its mobile site and mobile application. The court also has asked the commissioners to take the mirror images of the entire database of the CPUs, hard disks, laptops and storage media of the Just Dial in respect of its launch of its proposed B2B project JD Mart.

Confirming the developments, Dinesh Agarwal, CEO of IndiaMart said it brought this matter to the notice of the court, which directed an on-ground investigation.

“We observed mass slavish copying of our data and copyrightable work like entire taxonomy category trees along with the bulk of supplier profiles, product names, photos, prices, description and specifications,” he said.

Abhishek Bansal, chief financial officer, Just Dial, said the company is pursuing all legal remedies in the Delhi High Court to counter Indiamart’s “absolutely baseless and frivolous allegations.”

“We respect the order; however it is pertinent to clarify that the order was passed ex parte and to date, we have not been served with a complete set of paperwork. We will present our position before the High Court shortly.”

He further clarified that the JD Mart platform’s development is running as per planned schedule and the product shall be launched in due course of time after seeking recourse from the Delhi High Court.

Just Dial has also alleged that IndiaMART are themselves indulging in illegal activities in all possible manner. “They have not only committed this crime of data theft but have also flouted the government’s SOP (guidelines) during their recent visit to our premises under the garb of an ex-parte order thereby jeopardising the health, life & limb of our employees” said Abhishek Bansal of Just Dial.

Buy IndiaMART InterMESH, target price Rs 5830: Motilal Oswal | Economic Times

Economic Times

Motilal Oswal has given a buy rating to IndiaMART InterMESH with a target price of Rs 5830. The share price moved up by 0.70 per cent from its previous close of Rs 4964.90. The stock’s last traded price is Rs 4999.45.

IndiaMART InterMESH Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 14554.08 Crore) operating in Services sector.


For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 163.20 Crore, up 6.60 % from last quarter Sales of Rs 153.10 Crore and up 4.21 % from last year same quarter Sales of Rs 156.60 Crore Company reported net profit after tax of Rs 70.00 Crore in latest quarter.

Investment Rationale

The brokerage values IndiaMART on a DCF basis at INR5,830 per share (+17% upside), on an assumption of 11% WACC and 5% terminal growth rate, implying a oneyear forward multiple of 55x.

Promoter/FII Holdings

Promoters held 52 per cent stake in the company as of Sept 30, 2020, while FIIs held 22.3 per cent, DIIs 5.7 per cent and public and others 20 per cent.

‘Takes decades to build a strong B2B platform’: IndiaMART CEO on Justdial competition | Medianama


“Justdial has historically been a good company in the telephone-based directory market. However, B2B markets experience strong network effects — it’s not a one or two quarter game, and it takes decades to build a strong B2B platform,” said Dinesh Agarwal, CEO and MD of B2B marketplace IndiaMART. Agarwal was responding to an investor’s query during a call with investors on Tuesday to discuss the company’s Q2 performance, about how IndiaMART viewed Justdial launching its own B2B marketplace — JD Mart. The company saw a jump of 706% over last year in net profit, as it raked in ₹70 crore, as opposed to ₹9 crore last year.

Despite the new competition, Agarwal said that IndiaMART doesn’t see any immediate need to increase its advertising spending for increasing customers or platform traffic. “In any case, we don’t see advertising as a means to acquire traffic or customers. Advertising only helps in brand recall,” he added.

IndiaMART registered a traffic growth of 32% YoY with 259 million in Q2 FY21 as compared to 196 million in Q2 FY21. Total business enquiries delivered increased to 175 million from 123 million, a growth of 42% YoY. Supplier Storefronts grew to 6.2 million in Q2 FY21, an increase of 9% YoY and paying subscription suppliers grew to 141 thousand, a growth of 3% YoY.

Learning from dukaan-tech companies’

Digital collection vs physical collection: When asked why the company still relied on a physical collection process, Agarwal said that 95% of the revenue that the company made this quarter came in through digital modes. “If you see pre-COVID, we used to do about 55-60% digital collection. It will never become 100%, since for a lot of our customers in the higher subscription models, their deal sizes are ₹2-3 lakh, and you have to go and meet the management of these companies, and in those sases, making a phone based sale done will be difficult,” he added.

  • However, for the lower priced subscriptions, almost all collections are done digitally, he said, while noting that he has seen a greater adoption in people in making digital payments based on the brand value and tele-consultation. Collections, overall, have reached 80% of pre-COVID levels, Agarwal said.

Lending coming to IndiaMART? 
When asked whether the company will introduce more payments features on its platform, Agarwal said that “there are some new innovations by these new age dukaan-tech companies, and we are learning from them”. “Historically we have been trying to move closer to the transactions as much as possible. We started to add a lead management system which is being utilised by buyers and sellers and then we added payment options. B2b order sizes are much higher, so our payment gateway is used only for smaller transactions,” Agarwal added.

Subscribers grew: It posted a revenue of ₹163 crore, out of which 95% is contributed by subscriptions to its various tiers of services. Paying subscribers on the platform stood at 141,000, an increase of 3% over last year.

  • However, annualised revenue per paying subscriber at ₹45,800 grew only marginally, both sequentially and yearly — in the June quarter, it had posted ₹45,500 and in the same quarter last year, it was ₹44,600.

Platform traffic saw a spike in the September quarter — it was 259 million this quarter, compared to 191 million in the previous quarter, and 196 million in the same quarter last year. Almost 82% of this traffic came via mobile phones, the company said.

Financial snapshot

  • Revenue: ₹163 crore, up 4% YoY
  • EBITDA: ₹82 crore, up 125% YoY
  • Deferred revenue: ₹628 crore, down 0.4% YoY (Refers to contract liabilities in the financial statements, i.e. including advances from customers)
  • Cash generated from operating activities: ₹78 crore, up 85% YoY
  • Net profit: ₹70 crore, up 706% YoY

Second Quarter ending September 30, 2020

Noida, India, Nov 9, 2020: IndiaMART InterMESH Limited (referred to as “IndiaMART” or the
“Company”), today announced its financial results for the second quarter ending September 30, 2020.

Financial Highlights (Q2 FY2021):

IndiaMART reported consolidated Total Revenue from Operations of Rs. 163 Crore in Q2 FY21, a growth
of 4% y-o-y, supported by marginal improvement in realization of existing customers and increase in
number of paying subscription suppliers amidst the ongoing Covid-19 pandemic. Consolidated Deferred
Revenue declined marginally from Rs. 631 Crore in Q2 FY20 to Rs. 628 Crore in Q2 FY21.

Consolidated EBITDA was Rs. 82 Crore as compared to Rs. 36 Crore in Q2 FY20. Increase in EBITDA
margin to 50% in Q2 FY21 from 23% in Q2 FY20 was primarily driven by sustained as well as temporary
benefits arising from various cost optimization initiatives undertaken during last six months. Consolidated
EBIT was Rs. 77 Crore as compared to Rs. 31 Crores in Q2 FY20, representing a growth of 147% y-o-y.
EBIT margin increased to 47% in Q2 FY21 from 20% in Q2 FY20.

Profit before Tax was at Rs. 93 Crore and Net Profit was Rs. 70 Crores, representing margins of 51% and
39% respectively.

Consolidated Cash Flow from Operations for the quarter was at Rs. 78 Crore. Cash and Investments balance
stood at Rs. 1,045 Crore as on September 30, 2020 as compared to Rs. 780 Crore on September 30, 2019,
an increase of 34% YoY.

Operational Highlights (Q2 FY2021):

IndiaMART registered a traffic growth of 32% YoY with 259 million in Q2 FY21 as compared to
million in Q2 FY20. Total business enquiries delivered increased to 175 million from 123 million, a growth
of 42%. Supplier Storefronts grew to 6.2 million in Q2 FY21, an increase of 9% YoY and paying
subscription suppliers grew to 141 thousand, a growth of 3%.
Q2 FY2021 vs. Q2 FY2020

▪ Consolidated Revenue from Operations of Rs. 163 Crore, YoY growth of 4%
▪ Consolidated EBIT of Rs. 77 Crore
▪ Consolidated Cash generated from Operations at Rs. 78 Crore

Commenting on the performance, Mr. Dinesh Agarwal, Chief Executive Officer, said:
“As we navigate through these unprecedented times and a volatile environment, we are happy to report a
moderate financial performance in this quarter. With the pick up in business activity and increasing
realization for online adoption by the small and medium businesses, our revenue and customers have shown
a positive recovery trend and helped us to maintain healthy margins as well as cashflows. Our investments
in the product over the last couple of years has strengthened the value proposition for our customers and
hold us in good stead to leverage the emerging market opportunities in these tough times.’’ | Equitybulls | | Outlook | MoneyControl | ETMarkets

INTERVIEW: IndiaMart founder Dinesh Agarwal responds to the incoming challenge from JD Mart | Business Insider

Business Insider

  • IndiaMART has posted a moderate performance for the second quarter of the current financial year.
  • In an interview with Business Insider, Dinesh Agarwal, CEO, IndiaMART said that the COVID impact hasn’t completely worn off and also spoke about JD Mart’s launch.
  • Agarwal said that one of the biggest differences has been that the lockdown has resulted in a 30-40% growth in their buyer side traction.

Indian Business-to-Business e-commerce platform IndiaMART has clocked in moderate performance for the second quarter of the current financial year. Its revenue from operations rose 4% at ₹163 crore, while its consolidated EBIT stood at ₹77 crore, up 147% on a year-on-year basis.

Its net profit shows an eight-fold surge, but IndiaMART CEO Dinesh Agarwal attributed that as a one-time jump due to a tax readjustment last year. On a quarterly basis, its profit fell by 6%, resulting in a marginal dip in its share price on Tuesday. However, IndiaMART’s share price has more than doubled during the quarter.

Competition is rising for the country’s oldest e-commerce platform IndiaMART, with Just Dial launching its B2B e-commerce platform, and the push from Amazon and Flipkart in the B2B space.

Competition from JD Mart

Justdial – the 24-year old local discovery platform –- is set to launch its own B2B (business to business) marketplace called JD Mart. This will be in direct competition to IndiaMart, which has had an unchallenged run for 24 years.

But Agarwal isn’t worried about competition from JD Mart, at least not right away. “There are various kinds of B2B businesses and there are players like Amazon, Walmart. Let us see what JD Mart comes up with,” he said.

Agarwal said that you can build a feature, but the kind of data, insights and algorithms IndiaMART has put together over the years can’t be launched overnight. “It will be a 3-5 year journey and at the end of it the buyers and sellers will see who offers a better value proposition to them. For any new player to do sales is one thing, but getting the product right is a long term plan. We didn’t build IndiaMART over a couple of quarters. Just Dial is a great company and I’m sure they will find something new, some day,” said Agarwal.

Still dealing with the COVID impact

During an interview with Business Insider, IndiaMART CEO Dinesh Agarwal explained the two main changes that the company dealt with during the second quarter. “There has been a definite shift in online adoption and the second, the kind of fear everyone had in mind initially has gone away. So, the overall economy has started to move on from June,” he said.

Agarwal added that the COVID impact hasn’t completely worn off as 20% industries listed on IndiaMART continue to struggle while 30-49% of them are doing better than pre-COVID time too.

One of the biggest differences has been that the lockdown has resulted in a 30-40% growth in their buyer side traction. “The number of buyers have gone up and their repeat rates have also gone up. Our number of buyers has gone up 30-40% from last year and the repeat rate from those buyers has gone up from 55% to 60%, which has further strengthened our network effect,” he said.

With the economy opening up, offline retail once again poses competition to IndiaMART. Agarwal agrees but adds that the adoption of online seen in April, May and June is higher than ever before, and the impact continued even in the second quarter. “Even if 5% of people go back to offline, the new normal of the internet has happened and it’s not going to vanish,” he said.

However, IndiaMART’s seller subscribers are yet to reach its pre-COVID levels and Agarwal believes it will take four-five months for them to completely get back to normal.

Betting on tech and AI

Agarwal understands that most of his buyers come from smaller cities for whom ‘search’ and using correct English might not be the first option. And that’s why IndiaMART continues to invest in voice search, AI/ML and language options for sellers and buyers. “For example, even if you write 300 different spellings of jewellery on IndiaMART, you will still get the right result,” he said.

And that’s why the company doesn’t shy away from tech investments. Of IndiaMART’s total expenses, 20% of it goes into investing in products and technology. And out of the 4500 employees, 20% of them are in product and technology.

India’s oldest e-commerce platform is bracing for its first direct challenge in 24 years as Justdial ups its game | Business Insider

Business Insider

  • IndiaMart has been a leader in the wholesale market, with a first mover advantage since 24 years.
  • Even Alibaba and Walmart’s entry has not displaced IndiaMart from pole position so far.
  • However, global investment bank UBS believes that Justdial’s new B2B (business to business) platform JD Mart may pose a serious challenge.
  • Check out the latest news and analysis on

Justdial – the 24-year old local discovery platform – is placing a new big bet. The company is set to launch its own B2B (business to business) marketplace called JD Mart. This will be in direct competition to the country’s oldest e-commerce platform IndiaMart, which has had an unchallenged run for 24 years.

Even the entry of Alibaba and Walmart into India’s wholesale market had not threatened IndiaMart as much as Just Dial’s JD Mart might. Global investment bank UBS added fillip to the excitement among Just Dial’s shareholders by raising the target price for the stock from ₹640 to ₹800. The shares of Just Dial jumped by over 3% in early trade on Wednesday.

JD Mart – powered by Justdial’s existing strengths

The potential and excitement for Justdial’s new platform comes with the fact that the company already has a strong foothold in the market and a loyal user base. According to a report by UBS, the company will be able to leverage its already existing 140 million quarterly unique users and 100,000 paid B2B subscribers to sell JD Mart.

A snapshot of Just Dial before JD Mart

IndiaMart has a headstart but e-commerce in India is so young that analysts are excited. “While IndiaMART is the leader with 150,000 paid subscribers (2.5% of listings) and $90 million in revenue in FY20, this is a fraction of the number of MSMEs in India. Given room for growth, we think two or more B2B platforms can co-exist,” said the UBS report. MSME stands for micro, medium and small enterprises.

And Just Dial is pumping big money to capture this space. For the launch of the new platform, the company has already earmarked $15 million (₹110 crore) for marketing, branding and hiring. That is equal to the money spent by the company on advertising and promotion in the last two years combined.

“We think Justdial has developed a superior platform on the backdrop of an interactive user interface along with robust depth and breadth of B2B product offerings. JD’s core strength is its large sales force (9,000), which should aid monetizing the new platform,” said the UBS report.

IndiaMart and JD Mart will have to share

India’s current B2B online marketplace has a clear leader – IndiaMart. Led by Dinesh Agarwal, the company has secured its position in the B2B marketplace space with over 150,000 subscribers. Its growing popularity has even led to analysts comparing IndiaMart to Chinese giant Alibaba (which is yet to make a mark in the Indian market).

The platform has over 68 million product listings across 100,000 categories. “If you can’t find something on IndiaMart, you won’t find it on the internet,” Agarwal had told Business Insider in an earlier interview. Agarwal believes this also keeps them different from their rising list of B2B ecommerce competitors – Amazon, Alibaba, Flipkart wholesale, TradeIndia, and among others.

However, JD Mart is coming in with the exact same payment model as IndiaMart: a ‘freemium’ model where subscription is free but leads are chargeable and it is followed by a charged subscription model for premium users.

How Indian Companies Are Using Technology to Reach New Consumers

Harvard Business Review

A couple of years ago, I was standing on a platform in the New Delhi train station and noticed several
men watching a big Mumbai-Delhi cricket match on a crystal-clear video feed streaming from their smart phones. The service worked as well as any live stream I could pull up at home in Austin, Texas. Yet in some ways the scene was right out of the 19th century — the air was dusty and hot; there were far more passengers waiting than benches for them to sit on; and it was impossible to ignore all the aromas that waft through India’s public spaces.

This tension between 19th century challenges and 21st century opportunities creates interesting dynamics for the 86 percent of global consumers who live in developing countries and the businesses that serve them. The majority of Indians don’t have access to indoor plumbing or electricity; many rural citizens, in particular, don’t have access to high-quality health care and school — but digital technologies have the potential to address many of those challenges.

I was already thinking about this in 2017, when I saw the trailers for “Toilet, a Love Story.” Based loosely on a true story about an Indian woman who refused to move in with her new husband because he didn’t have an indoor toilet, the film resonated across India. Almost half of the country’s population still defecated in the open, according to UNICEF. So, to help improve sanitation and to reduce incidents of harassment against women, Prime Minister Narendra Modi pledged to build 100 million new toilets across the country as part of the Swachh Bharat Mission. Residents could use a mobile phone app to find the nearest toilet, following the advice of billboards that said: “When nature calls, use your phone!” And while stubborn habits and issues with the program’s administration remain, the government provided toilets to more than 600 million people in five years, according to Modi.

The most successful consumer goods companies in India use digital technologies to connect with millions of rural consumers, expand markets by improving economic opportunity, and improve the health and welfare outcomes. Consider the rise of Reliance Jio, the telecom company founded in 2016 by India’s richest citizen, Mukesh Ambani. By providing lower-cost phones and offering consumers free 4G data connections for the first seven months, Jio amassed a huge subscriber base in less than two years and set itself up to reshape all kinds of Indian marketplaces — so much so that Jio has been valued at $65 billion and multiple companies, including Facebook, have acquired a stake in it.

Consumer goods companies need to understand the opportunities — and challenges — this juxtaposition poses.

SMEs and entrepreneurs can reach new customers and markets

The success of IndiaMART, an e-commerce platform, illustrates how companies can expand their own market opportunities by connecting local businesses and consumers to the outside world. Digital technologies facilitate these interactions at macro and micro levels, providing an opportunity to tap both large groups and niche audiences. In some cases, they cater to urban, educated consumers: Prime Minister Norendra Modi loves the Gucci mushrooms that IndiaMART carries. But the site also helps rural consumers — during a visit to company headquarters, I observed dozens of people selling cow dung and urine for use in organic farming.

Facilitating new connections between sellers and buyers can foster prosperity and spending power for SMEs, but it’s good for IndiaMART, too, which has enjoyed exponential growth and recently launched an initial public offering.

And markets can be modernized

Digital technologies have allowed innovative companies to blend online and offline interactions in ways that allow them to reach consumers who are less affluent or live outside urban markets. To a great extent, Indian retail will skip the large shopping mall and big-box phase, leapfrogging instead to digital sales (though bricks-and-mortar and similar in-person interactions will persist).

Thanks to the rapid emergence of digital wallets and payment platforms, online marketplaces such as Flipkart, Grofers and now JioMart have flourished, with plenty of room to grow. According to the Wall Street Journal report, Forrester Research Inc. expects Indian e-commerce sales will more than double to $68.4 billion by 2022 from $26.9 billion in 2018. That’s not just an affluent, urban phenomenon; digital technologies are enhancing the welfare of rural and less-affluent consumers, as I observed in 2018 while conducting interviews in Gurgaon. I went from a conversation with Uber, where managers explained how rural workers were streaming into urban centers to make money as drivers; to an in-depth discussion with the co-founder of Eko Financial, who talked about how their platform allowed for a frictionless, nearly real-time option for those same drivers to transfer money back home to family; and then to a small shop in the DLF Phase 3 development in Gurgaon in suburban New Delhi, where a merchant attended to drivers, delivery-wallahs and others who regularly sent money back to their home villages over the Eko platform. Launched in 2007, Eko caters to urban migrants employed informally. As customers become more familiar with digital payments, they’ve also used Eko to make utility payments or to top off mobile phone credits. Prior to the pandemic, Eko alone was processing domestic remittances worth roughly $330 million a month.

Mold your technology to the market, not the market to your technology

The key to success in this context is to customize the technology to the local market, rather than waiting for the market to adapt to the technology.

Maintaining an efficient supply chain can be especially difficult in developing countries. Companies need to modernize logistics, but in a way that adapts to on-the-ground realities. Consider, for example, the case of Rivigo, a trucking company headquartered in Gurgaon. Rivigo transformed how trucking and delivery can be done in India, adapting both digital systems and the physical construction of its trucks to improve efficiency and quality of life for its “pilots.” In the past, India’s disorganized market and challenging infrastructure meant that truck drivers had to leave home for long periods of time. Because the cabs and trailers of most trucks in the country were inseparable, drivers couldn’t leave a trailer behind at a warehouse and hitch up to a full load, nor could they drop a trailer for another driver to take across the next leg. Rivigo changed that, creating what it calls “relay as a service” trucking that allows drivers to relay trailers from hub to hub, allowing them to stay closer to home and spend more time with family — and allowing the company to keep its thousands of trucks on the move.

Already a hit with drivers, Rivigo became a hit with customers by heightening efficiency and slashing turnaround times. It did this by making each truck into a driving Internet of Things. The company covers trucks and trailers with an array of intelligent sensors that constantly interact with a real-time, responsive logistics network. For example, “smart” tires alert drivers to problems with tire pressure, vertical load, and temperature. Trucking and fleet companies can use the data to measure when repairs might be needed, retain their production and delivery records, and lower the amount of downtime for drivers. The drivers, meanwhile, have an app they can use to track trips, stay in touch with managers, and stay on schedule. All told, the company tracks almost 200 data points, all of which serve as performance measures for drivers. Rivigo slashed 50 to 70 percent off turnaround time and significantly cut costs for clients in the e-commerce, pharmaceutical, automotive, cold chain and FMCG sectors.

Empower your consumers

Imperfect infrastructure — as well as limited digital access and skills — have left emerging markets with shallower data pools than those in developed markets. Language and literacy can also be major obstacles on digital platforms, especially in India, where residents speak 22 “scheduled” languages, 99 other languages, and thousands of different dialects and pidgins.

Companies need to adapt to those realities — and the ones that do so can find ways to empower their customers. When it launched in 2012, SocialCops wanted to bring the Big Data revolution to challenges that affect the well being of billions of people who don’t have robust digital footprints.

One of SocialCops’ most remarkable programs is the Pradhan Mantri Ujjwala Yojana, an initiative started in May 2016 to replace chulhas — the traditional clay stoves that burn wood, coal, dung or other dirty fuels. The World Health Organization estimates that unclean cooking fuels lead to a half million deaths per year, mostly of women who inhale the equivalent of 400 cigarettes an hour when cooking at home. Nearly half of Indian households don’t have access to clean fuel, so the Ujjwala Yojana program — a partnership between SocialCops, the Ministry of Petroleum and Natural Gas, and the country’s three oil marketing companies — set out to provide free liquid petroleum gas (LPG) connections to households below the poverty line.

To make the program work, officials first needed to make sure more people could access an LPG distribution center. SocialCops analyzed more than 6 million data points to identify the best sites for 10,000 new centers. They analyzed clusters of villages to find the best locations, and then provided a visualization platform that allowed officials to make effective decisions. Next they set out to understand customer-application processes. More than 100 million applications generated a deep enough data pool to allow officials to track what worked and what didn’t. At one point, for example, the Ministry noticed that women were disproportionately rejected by distributors because they didn’t have bank accounts. So, they coordinated with another government initiative to expand access to financial services, virtually eliminating rejections based on lack of bank accounts — a step that, in itself, has empowered tens of thousands of Indian women over the past decade.

For government and company administrators, the SocialCops dashboard ensured greater transparency across six levels of hierarchy, from government offices in Delhi down to the citizens in small villages. Top government ministers could look at the village level and see where the program is available, how well it’s running and how to improve it. That unparalleled transparency and insight  helped link the program to more than 22 million women in the first year. In its second year, it reached 40 million women, so they upped their goal from 50 million to 80 million women. According to the SocialCops website, the program now includes more than 72 million connections.

With a little ingenuity, companies can facilitate big wins for disadvantaged consumers using digital technologies — and make a good living doing it.