New Delhi, 24 February’23: IndiaMART InterMESH Limited has been bestowed with the prestigious “Best Business App of 2022” award by the Internet and Mobile Association of India (IAMAI) at the 13th India Digital Awards announced at the 17th India Digital Summit, Amirt kaal: Digital India@100. This is the third time in a row the app of IndiaMART has been recognized to be the best business app in India.
The 17th India Digital Summit (IDS) marked the gracious presence of Shri Piyush Goyal, the Union Minister of Commerce & Industry; the event was held at the Lalit hotel in New Delhi. IDS is a flagship event organized by the Internet and Mobile Association of India (IAMAI). It brings together policymakers, pathbreaking founders, and industry doyens who congregate to discuss and deliberate on “India’s digital growth story and the future of India, across various sectors”. This year, Industry leaders such as Mr. Dinesh Agrawal, Founder, and CEO of IndiaMART, Mr. Sanjay Gupta, Chairman of IAMAI, Dr. P D Vaghela, Chairman of TRAI, Shri Vikram Sahay, Joint Secretary of Ministry of I&B to name few, joined the summit to confer on the topic: “Amrit Kaal: Digital India@100”.
On receiving the award, Mr. Amarinder Dhaliwal, CPO of IndiaMART exclaimed, “We are continuously striving to build a seamless user experience and ensure customer delight on all our platforms. From voice search in vernacular languages to lead manager system, our app is transforming into a one-stop destination for all business needs. We are thankful for this recognition.”
Dinesh Agarwal, who started IndiaMART.com (now IndiaMART InterMESH) in 1996, thinks there has never been a greater time than now to start one’s entrepreneurial journey.
A significant drop from a whopping record $38 billion in startup funding in 2021 to $25 billion in 2022 may have cautioned aspiring entrepreneurs to hold their plans to build their dream businesses just yet. This is especially because securing funding for the initial capital required to get a business going generally comes from VCs (Venture Capitalists). However, Dinesh Agarwal, who started IndiaMART.com (now IndiaMART InterMESH) in 1996, thinks there has never been a greater time than now to start one’s entrepreneurial journey.
Message to new entrepreneurs
According to Agarwal, the internet and mobile phones have penetrated to a deeper extent in the last two to three years, especially post the COVID-19 period. “With lesser funding, you will be able to build a more long-lasting business, it’ll be a more rational way to build a business. You probably won’t feed on unnecessary competition, so it’s a great time to start a business,” he told CNBC-TV18 on the sidelines of the India Digital Summit 2023 in Delhi on February 20.
According to him, while growth may be slower initially given the macroeconomic uncertainties at hand, early entrepreneurs need not worry about growing 40 to 50 percent right in the starting years, because when they compound that over the next 10 years, it’ll still be quite high.
In fact, Tracxn data cited by a media report shows that funding for early-stage startups increased marginally to $8. 2 billion in 2022, from $7. 1 billion in 2021. Seed-stage startups, on the other hand, got a total of $1. 7 billion in 2022, marginally lower than $1. 8 billion in the previous year. Funding for late-stage startups however, saw the real hit, 28 percent to $24. 1 billion from $33. 6 billion, the report said.
‘Funding is very overrated’
In the discussion moderated by Apurva Chamaria, Head of Startups and Venture Capital, Google, at the event organised by the Internet and Mobile Association of India (IAMAI), Agarwal recalled the time he started his business when getting one’s money to make big losses was not a concept.
According to him, funding is a very overrated inspirational thing. “Even today, if you go to Noida, every third building is running some or the other IT, mobile outfit (business). Not even a percent of them are actually funded or need funding… Some of the companies that get listed around the world, whether it is on NASDAQ, BSE or NSE, how come they never took any funding before going public,” he pointed out.
Most businesses are created in a manner which does not require external capital and is self-sufficient, he said.
‘Customers can fund businesses’
He believes that even today, given that the market has grown 10X, whether one makes any kind of software, be it a website, mobile apps, automation or for banking digital marketing, or any other, there’s enough market that customers can fund businesses.
“If you mix a little bit of marketing and sales along with your technology, and understanding, most of the time customers should be able to fund your business. Customers’ revenue should be able to fund their business, he said.
Agarwal added that there is a huge market if one can find the right kind of product, market fit or service that customers are willing to pay for. “You might have to run a little slower. But that’s about it. When funding comes, you run much faster but when you run faster, there’s always the chance of an accident. It’s okay to be going slow but steady,” he suggested to entrepreneurs.
When will there be a slowdown in startup layoffs?
According to reports, over 21,000 startup employees have been laid off in the past three to four months as firms look to stave off challenges posed by the funding winter, recession fears and in a bid to become profitable.
IndiaMART’s Agarwal noted that the total employed population in the entire IT industry is about 20 million and less than two lakh people (overall tech space) have been fired so far and that’s very cyclical in nature. There’s a continuous long bull run for the IT industry for the next 20, 30, and 40 years, so need not worry about it.
“I’m more worried about the current batch that’s going to come out in June-July, more than 20 lakh people will come out of college, and they might find it hard to get their dream job,” he said.
He said, for graduates, it’s important to settle in companies where they find opportunities and that everyone will have to tone down expectations a little.
“The industry has been offering 20 percent plus salary raises for the last seven odd years. In the last three years, salaries have almost doubled but the industry has not been able to sustain that, so the expectations will have to be moderate for a year or two, he said.”
Job opportunities at startups
Agarwal explained that the startup ecosystem is not going to be eradicated, it’s just that there will be 5-10 percent less number of companies or people.
He believes one is still better off joining a smaller company and learning much faster than probably a million+ employee behemoth.
“It’s a trade-off, depending on what you like. In larger corporations, you would learn systems, processes, and complex projects. In a startup, you’ll learn hustle. and I think it’s always good in the first five years to see both sides of the world,” he said.
Reflecting on salary hikes, he said, in the last five to seven years, yearly increments have been much more double or triple than inflation and even today, it is going to be higher than inflation for sure.
He cited the example of the US, where employees are given a four-five percent increment per annum, which is just 1 percent above inflation. “In India, since the last six to seven years have been really good for the startup culture, people are not aware of the reality, it should be fine in a year or two,” he said.
MSMEs can be educated on good financial practices, invoicing, and dispute resolution to reduce the occurrence of delayed payments, says Dinesh Agarwal
In an interview with BW Businessworld, Dinesh Agarwal, Founder and CEO, IndiaMART has said that the access to finance, lack of infrastructure leading to increased operational costs, market, technology, availability of raw materials, skilled labour and information has always remained a big hurdle for Micro, Small and Medium Enterprises (MSMEs).
He said that many things need to be done to educate and assist small business owners especially from emerging markets, around the use of digital means for running and growing their businesses.
“If MSMEs could leverage the technology to its full potential, many of the challenges being faced by MSMEs currently can be solved and can contribute to sustainable economic development,” added Agarwal.
Tell us about how your company is empowering small businesses in India.
When it comes to small businesses, we provide them with an open marketplace where they can connect with buyers and sellers from anywhere in the world and grow their business online. While on one hand, we provide them assistance and handholding in building their web presence, on the other hand, we use innovative and state-of-the-art digital solutions to create a larger, quicker and safer marketplace.
Thus, we believe in a holistic approach and in providing assistance to small businesses at every stage of their growth journey.
What are your views on Union Budget 2023-24 as far as the MSME sector is concerned?
The Union Budget 2023-24 showcases a forward-looking and comprehensive approach to elevate the country’s economic growth and it prioritises the utilisation of India’s vast working-age population by focusing on developing digital infrastructure and establishing International skill centres. The push on infrastructure, manufacturing and capital investments would further enable the growth of MSMEs and will lead to job creation.
The budget also focussed on empowering the MSMEs by addressing their financial needs which were most affected during Covid-19. The government has announced a credit guarantee scheme for the MSME sector and an additional 2 lakh crore collateral-free credit scheme which is very crucial for the infusion of cash in businesses.
Besides, the announcement of MSMEs to get 95 per cent of the forfeited amount for contract failure during Covid-19 and Income tax deduction only on payment of MSME dues will definitely have a huge impact on the businesses. The combination of all these initiatives presents a promising outlook for the growth of MSMEs in this Budget.
What are the things that are missing in the budget for MSMEs and what are the things the government could have added?
The government has covered many aspects of MSMEs such as credit enablement, digital payments, working capital and the simplification of tax regime for ease of doing business. But still, there are a few areas which need simplification. For instance, one place that the budget could address and set right is eliminating the separation of central goods and services tax (CGST) and state GST in bills and filings.
Similar to the direct tax filing approach, GST compliance can also be made easier by pre-filling details, especially with the thrust on e-invoicing, it should be possible. Advance tax payments can be aligned with quarter ends rather than 15 days before quarter end.
Perhaps the government will incorporate these aspects in future budgets as these moves will go a long way to simplify business processes further and help small businesses.
Do you think this budget will change anything for Indian MSMEs or is it just another regular budget?
The government has been focusing on the formalisation of the Indian economy and MSMEs for some time now. Budget 2023-24 also reflects the government’s commitment to boost economic growth by investing in infrastructure development and increasing capital expenditure. Apart from that, this budget further encourages the use of technology and digital mediums which is reflected in the push of digital payments, Make AI for India, ONDC, GeM and Digital Skill centres.
The budget also focussed on improving access to finance by revamping the CGTMSE and on lowering the burden of MSMEs who suffered during the pandemic.
While all the initiatives seem to be in a positive direction, the success of these obviously depends on the execution of the schemes and the collective effort of the businesses.
What is the current state of Indian MSMEs and what are the major challenges they are currently facing?
Well, as we know the MSMEs contribute nearly 30 per cent to the Indian GDP, when it comes to the retail sector it is the MSME which meets 70 per cent of the total demand. And MSMEs’ contribution to the gross export is 45 per cent yet, this industry suffers from the problem of long working capital and slim profit margins.
On top of it, access to finance, lack of infrastructure leading to increased operational costs, market, technology, availability of raw materials, skilled labour and information has always remained a big hurdle for MSMEs.
A lot needs to be done to educate and assist small business owners especially from emerging markets, around the use of digital means for running and growing their businesses. If MSMEs could leverage the technology to its full potential, many of the challenges being faced by MSMEs currently can be solved and can contribute to sustainable economic development.
How can we solve MSMEs delayed payment issue according to you?
The government has proposed to include payments made to MSMEs within the ambit of section 43B of the income tax act for deduction will be allowed only if the payment is made within the time mandated under the MSME act which is 45 days after the supply of goods and services. This will surely help in easing the liquidity pressures faced by MSMEs in a big way.
Alongside this, the adoption of digital invoicing and payment platforms can help streamline payment processes, reduce errors, and enable quicker payment processing. Which the UPI is doing slowly and gradually.
Government and industry bodies can promote and encourage companies to sign up for the prompt payment code, which requires them to pay suppliers promptly and fairly.
When it comes to the MSMEs, they can use supply chain finance techniques such as factoring, invoice discounting or reverse factoring to get early access to funds based on their outstanding invoices.
Lastly, we need awareness and education. MSMEs can be educated on good financial practices, invoicing, and dispute resolution to reduce the occurrence of delayed payments.
What can we expect from your company this year?
We are building a one-stop solution for businesses to facilitate online commerce in the long term. Therefore, we have been taking initiatives to augment technology and product suite for further ease of our customers, which were also manifested in our various strategic investments across sectors last year.
This year as well, we would continue to enhance our value proposition, move further towards building an ecosystem and expand our reach across emerging markets of India.
The film is an attempt by the company to recognise and solve the misery of the small business owners
B2B online marketplace, IndiaMart has unveiled its new brand video titled “#PassionBhiBusinessBhi” which is the third film of its “IndiaMart, Aur Kya!” campaign.
The “IndiaMart, Aur Kya!” campaign was launched in October 2022. The brand video attempts to address the challenges faced by small business owners, who lose the balance between their personal and professional lives while juggling each aspect of a business.
The video opens on a melodious note with Sharmaji, a business owner, playing the saxophone. Soon, another businessman, Rakeshji, his friend, calls him to consult on the proposition of joining IndiaMart.
Sharmaji gives a musical response to the same which is aimed at amusing the viewers.
The video explains that now business owners can pursue their passion and simultaneously lead a stress-free life, leaving their business concerns to IndiaMart – hence the title “Passion bhi, business bhi”!
At the germination stage, businesses run with limited manpower. Yet, nothing can afford to be compromised, be it order management, sales, marketing, invoicing, customer relationship management, or transportation of the finished products. While giving it all to the business, the business owners are left with nothing but sleepless nights. For many business owners, it may also mean sacrificing their passion and interests beyond their business goals. This is where IndiaMart comes into play, as a solution for work-life balance.
Dinesh Gulati, COO of IndiaMart, remarked, “We have witnessed over the years, small business owners face a variety of challenges while trying to establish and run their business. While meeting the demand of existing clients to onboarding the new ones, they get flustered! At IndiaMart, we have developed an ecosystem over the years to provide these small businesses with end-to-end business solutions at every stage of their journey. This film reflects on how IndiaMart has evolved and became the permanent partner of millions of business owners.”
“The offerings of IndiaMart are extensive. Covering all the aspects in a nutshell and that too in an entertaining manner was indeed a challenge. #PassionBhiBusinsessBhi effectively communicates both, the challenges faced by any business owner and the interrelation of the services of IndiaMart which eases the way of doing business,” said Akash Chatterjee, Creative Director, Schbang.
The brand film has also been released in four regional languages.
MSME Budget 2023 Expectations: MSME sector experts seek better access to credit for expanding their business, a more simplified tax system, and incentivising structure.
Finance Minister Nirmala Sitharaman will table the Union Budget 2023 on February 1. While speaking with Moneycontrol, the majority of experts from the MSME sector resonated in one voice that the sector expects the Budget of 2023-24 to further simplify the tax structure and ease of getting credit for small businesses.
Here is what the sector’s experts have to say
Dinesh Agarwal, Founder and Chief Executive Officer, IndiaMART
My expectation from Budget for MSMEs has always been the same, which is the simplification of Tax regulations and other compliances. Usually, small businesses are a one-man army, or at best, functions with limited manpower. Hence, getting the compliances done is costly and time-consuming. Its simplification will help MSMEs to devote more time to their business and innovation.
Implementation of GST has simplified the tax regime as in the erstwhile vat regime, it was quite complicated. Although, it still needs further simplification.
Similarly, as they work on a long credit cycle and slim profit margin, easy access to credit at a cheaper rate becomes crucial. This must be addressed by the government to help to do business easy.
Sandip Chhettri, CEO, Tradeindia.com
India’s economy has consistently been regarded as one of the most resilient economies when compared to other nations; this is mostly because of the effective economic policies implemented by the Indian government. Due to its robust MSME sector, which is less vulnerable to global trade flows than other economies, India is somewhat insulated from global spillovers. Prudent regulatory measures and policy reforms have played a crucial role in developing resilience in the economy. From the Union budget 2023, we expect the government to announce a better implementation plan of the policies, which shall aid India in navigating the current Macro Economic crisis.
I believe that easy credit and technological adoption should be the keys to making MSME robust.
The government should balance this coming union budget should definitely focus on increased spending on technology infrastructure for the MSME sector so that it makes access to technology easier for MSMEs, making it easier for small businesses to adopt. For MSMEs, digitalisation can act as a catalyst for generating new opportunities for growth. It can help with capturing and retaining a skilled workforce. If India wants to compete globally and become the world’s manufacturer, it needs to help its MSME expedite digitisation to unlock its true potential by leveraging technology in hiring.
Saksham Malik, Programme Manager at The Dialogue
A renewed attention on skill development and research and development will be crucial to ensure that an increased number of startups succeed in the emerging technologies space. It will be crucial that the government not only invests in sensitising children about responsible use of AI and catching them young along with nurturing an enabling environment for business to thrive through phased incentives.
What we need is a budgetary allocation that will bridge the digital divide as a short term goal and brilliance divide as a long term one.
Pranav Dwivedi, Founder at Netratvshaala
The demand for cloud services and deep technologies such as AI and blockchain is only increasing, and the Union Budget 2023 should focus on incentivising their growth and integration. This would enable businesses to become more agile and efficient and operate at an optimal level.
Overall, it is essential for the government to recognise the technology sector’s potential and invest in it to accelerate the growth of the Indian economy. With the right incentives, we can be confident that Union Budget 2023 will unlock immense value and propel India to the ranks of the world’s most successful economies.
Ranjit Barthakur, Founding Director, The Balipara Foundation
The government’s announcement of various incentives for agroforestry in the 2022 budget was a welcome move for the rural economy to increase productivity while also encouraging farming practices that are resilient to climate and ecology. We need to capitalise on this and also focus on building a broader ecosystem of incentives around processing and connecting farmers to markets for produce.
Farmers also need greater clarity on the materials they can access in agroforestry, the insurance they will receive for crops and support during the maturation period – or else receive support in agroforestry design, which becomes self-sustaining within the first year.
Since the onset of the pandemic, IndiaMART has seen a significant increase in quarterly traffic to 250 million or 40% as compared to pre-Covid levels. “Additionally, we’ve noticed a higher growth rate in certain categories such as construction, consumer durables, apparels, chemicals, and pharma-related products compared to other categories,” says company CEO Dinesh Agarwal. Edited excerpts from an interview:
How much of the growth that you saw in the December quarter is due to the seasonal demand?
In the December quarter, we experienced impressive growth across key metrics. Our consolidated revenue from operations for the quarter was Rs. 251Cr, registering a growth of 34% YoY. Deferred revenue was at Rs. 1,015Cr, showing a growth of 29% YoY, and cash generated from operations was Rs. 115Cr, with a 36% YoY increase. Consolidated collections from customers also reached Rs. 283 crores, with a YoY growth of 28% while consolidated EBITDA margin stood at 28% and net profit increased by 61% to Rs. 113Cr with a margin of 32%. Additionally, there was a 24% increase in the number of paying subscription suppliers. Our focus remains on sustained growth in our users and paying subscription suppliers and we are confident that our performance was not just driven by seasonal demand.
Which categories are seeing most of the growth?
IndiaMART is a comprehensive platform that offers listings in 56 different industries, including over 95,000 product and service categories that span the entire value chain – from raw materials to machinery to final finished products. Since the onset of the pandemic, we’ve seen a significant increase in quarterly traffic to 250 million on our platform, with growth reaching approximately 40% as compared to pre-COVID levels. Additionally, we’ve noticed a higher growth rate in certain categories such as construction, consumer durables, apparels, chemicals, and pharma-related products compared to other categories.
Any plans to enter new categories or expand geographically?
Our company has a strong presence in over 1,000 cities, thanks to our extensive network of offices, field partners, and telechannel partners. Our supplier base is well-diversified and spread across different geographies, with 44% of our paying subscription suppliers coming from Tier II and Tier III cities and the rest from metro cities.
Our buyer base is also diverse, with 32% of buyers coming from metro cities, 25% from Tier II cities, and the rest from Tier III cities. Moving forward, our goal is to continue expanding our reach by penetrating deeper across categories and geographies.
What does the outlook look like for FY24 given all the talk about slowdown and recessionary fears?
As we have seen that India’s resilience has been proven in the past with strong recoveries from the 2008 financial crisis and 2016 demonetization, I remain optimistic about the Indian economy’s resilience in the coming future and expect it to continue with decent growth in FY24.
In my opinion, the outlook for FY24 should remain positive despite the current slowdown and recessionary fears. The country’s demographic advantage, a large working-age population, and growing middle class are drivers for its growth. And the improvement in ease of doing business ranking rising from 77th in 2017 to 63rd in 2021, is a positive indicator for the business environment. I believe these factors will insulate us to a great extent from the ramifications of the global economic slowdown.
Looking back, how big a tailwind has Covid proved for your business?
While the pandemic has been a tough time for all of us, it also emerged as an opportunity for businesses and individuals to be prepared for any situation. We saw a rapid acceleration of internet adoption and were well prepared to leverage these emerging opportunities for the company and for our customers; backed by the strong business model, latest technology, and secured market positioning.
The Company actively promoted the discovery of products related to medical infrastructure during the second wave of COVID-19. Millions of users benefited from the dedicated tab on the IndiaMART platform for medical supplies enlisting all dire needs for ease of reference of buyers and suppliers visiting the platform.
This resulted in an increase in quarterly traffic on our platform, from 180 million in March 2020 to 250 million in December 2022, and a corresponding increase in registered buyers, from 102 million to 165 million. The number of supplier storefronts also increased from 6 million to 7.4 million, strengthening our network effects. Our paying subscription suppliers increased from ~147K in March 2020 to ~194K in December 2022.
During the pandemic, we also evolved the company into a hybrid workplace organization while at the same time, we adopted channel sales partners which have further helped us cover the emerging markets of the nation. As of December 2022, we have approximately 150 channel partners working with the company.
I believe we took the adversity and made ourselves and our customers more resilient and prepared for uncertainties in the future. And we plan to continue doing the same.
IndiaMART InterMESH Limited, India’s largest B2B online marketplace announced that it is all set to expand its footprint further in Tamil Nadu with new offices in Kanchipuram, Pondicherry, Tirunelveli and Vellore. Alongside, the company said it will hire local people on their payroll for operation of the new offices in the state. Besides, the company also announced their plan of establishing a customer service team in Chennai for assisting customers in the vernacular language. All these major announcements came at a conference which was held to address the difficulties faced by MSMEs which are based in Tamil Nadu, and the strategic approach taken by the company to mitigate those very challenges. The event was held at the Taj Club House in Chennai.
Speaking at the conference Mr. Dinesh Gulati, the COO of IndiaMART said, “IndiaMART has a strong presence in Tamil Nadu, it ranks 3rd in terms of total web-traffic on the platform. What we have seen is that, owing to the recent construction projects initiated by the government, most number of IndiaMART customers in Tamil Nadu are from the construction and real estate sectors. To cater to this growing market, we have already established 13 channel partners and 6 branch offices across the state including Chennai, Coimbatore, Madurai, Salem, Erode, Tiruchirappalli and Tirupur and we plan to expand its footprint in the emerging markets.”
Recently IndiaMart Intermesh Ltd reported a 61% rise in its consolidated net profit to Rs 112.8 crore for the third quarter ended December 31, 2022. The company reported a consolidated profit of Rs 70.2 crore in the October-December quarter a year ago. As per data, Its consolidated revenue from operations in the third quarter rose 33.65% to Rs 251.4 crore against Rs 188.1 crore in the corresponding period of the previous year.
IndiaMART is India’s largest online B2B marketplace, connecting buyers with suppliers. With a 60% market share of the online B2B Classified space in India, the channel focuses on providing a “360- degree solution” to Small & Medium Enterprises (SMEs), Large Enterprises as well as individuals. Founded in 1999, the company’s mission is ‘to make doing business easy’ and is trusted with 165 million buyers, 7.4 million sellers, and has 90 million products & services on its platform leading to ~40 million business enquiries every month.
Budget 2023: One of the major expectations of this sector includes increasing MSMEs’ access to finance and restructuring the existing credit schemes for the sector.
The State Bank of India (SBI) in its recent report on MSMEs stated that several Micro, Small and Medium Enterprises (MSMEs) have grown to become mid-size corporate and there has been a credit growth of nearly 20 per cent between 2021 and 2022. However, there is an urgent need to restructure the credit guarantee scheme to push the next level of growth of the enterprises, it added.
The report identifies that a key challenge for MSMEs is complicated paperwork to raise credit, hence a lot of them remained out of the MSME ambit. Alongside, the information related to credit schemes is also not easily available which further makes the process confusing for many MSME owners.
“We wanted to apply for a loan. But neither the bank employees had a clear idea about Udyam nor some concrete information was available easily online. So, we failed to apply for the loan,” said Najooka Javier, co-founder of Tohfa, a small-scale business that manufactures sustainably-made accessories and home décor.
The study proposed to increase the maximum loan amount for coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) from Rs 2 crore to Rs 5 crore for all activities under the manufacturing, services, and trade sector.
As per the regulations of the Ministry of MSME, a business set-up can only be considered an MSME if they meet the specific criteria of investment and turnover. A business comes under MSME if the investment amount ranges between Rs 1 crore to Rs 50 crore, and the turnover is between Rs 5 crore to Rs 250 crore.
Various MSME business owners said that there is immense scope for MSME business growth and penetration, but for that preliminary investment needs to be higher.
Vijaya Kumar TR, director of Rare Planet Handicrafts Pvt Ltd, a medium enterprise, said, “The coverage which is given to an MSME is only Rs 2 crore without collateral. However, the MSME of the country has grown so big that the credit requirement is high and the amount of Rs 2 crore is too low. The limit needs to be at least Rs 5 crore without collateral.”
MSME business owners said that arranging collateral is also difficult at the early stage of the business.
The Rare Planet founder stated that their company is also struggling with this. “Our limit is at Rs 1.75 crore and if we have to go ahead with this, we need to provide collateral. When we reached out to a private bank, they told us that they can’t issue the loan of Rs 5 crore that we demanded only because of the CGTMSE limit,” he added.
Various business owners said that there has been an immense push for the MSME sector after the pandemic. Be it in the section of travel or retail, the MSME sector witnessed huge growth, primarily driven by domestic consumption. While employee layoffs and job cuts have become rampant in big corporate houses like Infosys, Wipro, and Google after the pandemic, the MSME sector has become a major hub for job creation too.
In an exclusive interaction with Zee Business, Minister of State, Dr. Bhagwat Kishanrao Karad stated that in the recent past, the MSME sector has created six crore jobs. The government is also focusing on MSMEs for more job creation in the coming quarters.
Dinesh Agarwal, founder of Indiamart, an online B2B marketplace also agreed that after the economy started recovering post-pandemic, a large section of the salaried people shifted to small and medium-scale businesses.
With Budget 2023 around the corner, several industry leaders have also suggested the same for the sector. One of the major expectations of this sector includes increasing MSMEs’ access to finance and restructuring the existing credit schemes for the sector.
“The government overlooked a crucial aspect of the OCEN process that prevents 60 million SMEs from using this programme for loan purposes. While account details are available to individuals, they are not available for small and medium companies,” added Arvind TCA, ex-senior banker of Deutsche Bank India, and co-Founder of Artfine, a supply chain finance company.
The government introduced the Open Credit Enablement Network (OCEN) two years ago. It is a retail credit programme that uses online marketplaces to connect borrowers and lenders and expand access to microcredit for the hitherto underserved MSME sector.
MSME players also expect a relaxation of an interest rate cap of 18 per cent on the Credit Guarantee Fund Scheme.
“Certain measures, such as offering a GST subsidy on PoS (Point-of-Sale devices), refinancing options for MSMEs on the lines of the National Housing Board’s refinancing scheme and the relaxation of an interest rate cap of 18 per cent on the Credit Guarantee Fund Scheme (CGS) will facilitate more accessible credit besides laying down the framework for the growth of MSME sector, which accounts for 30% GDP of the country,” said Shweta Gupta, Co-Founder, MUDS Management, a management consulting firm.
Companies like Paytm, Zomato, Rapido, and Swiggy among others, have been among the top partners posting maximum jobs for women
In a survey conducted by the jobs and professional networking platform, apna, it was said that participation of women from tier 2 cities in the gig economy increased by 34 per cent.
The report found that there was an overall 36 per cent YoY (year on year) hike in women users on the platform from tier 1, tier 2 and beyond cities, while 34 per cent women users on the platform took jobs as drivers, delivery partners, lab technicians, factory workers, etc. Companies like Paytm, Zomato, Rapido, and Swiggy among others, have been among the top partners posting maximum jobs for women to diversify their workplaces, it said.
Ajoy Thomas, VP and Business Head – Staffing, TeamLease Services said, “More women are entering the industry due to the continuous rising demand from e-commerce companies, which are setting up fulfilment centres, coupled with corporates looking to improve their gender diversity. Women hold a third of the sorting, packing, loading, and customer support jobs this year, up from about a tenth even three-four years ago.”
Rise in Gig Economy during Pandemic
The pandemic has prompted multiple companies to adopt flexible work cultures, with gig workers finding new opportunities in nearly every industry.
If statistics are to be believed, India has over 15 million freelancers working on technology projects. According to ASSOCHAM, India’s gig economy is projected to reach USD 455 billion by 2024, growing at his CAGR of 17 per cent. Nearly 60 per cent of tech industry organisations are now investing in gig workers, and 97 per cent of these companies want to keep gig workers at their current level or hire more gig workers .
Dinesh Gulati, COO, IndiaMART said, “For the young population of India, freelancing has become a lucrative alternative and helped them unleash their aspirations, banking on the recent fast-clipped emergence of freelance online platforms. The trend of gig workers which was initiated by start-ups has now become a new norm among organisations of all sizes and scales.”
Budget role towards Gig Workers
In the union budget 2021, Finance Minister Nirmala Sitharaman announced allocation of Rs 150 crore for the national database of unorganised workers. Also a proposal was made for launching a portal to collect relevant information about gig economy workers, including those working in construction, among others. Sitharaman had said that, for the first time globally, social security benefits will extend to gig and platform workers.
For the year 2023 too, it is expected that the union budget brings relief to the lower and middle-income classes in regard to income tax. Also, provisions and policies on social security, healthcare, etc are required for the gig workers.
Avadhesh Dixit, CHRO, Acuity Knowledge Partners said, “The annual budgetary exercise is one of the most awaited regulatory updates, especially for the salaried class. Given the high-inflation environment, the income tax exemption or modification would provide some relief to lower and middle-class income earners, along with long-term benefits like healthcare, superannuation, and retirement benefits from the government in the upcoming budget. There is also a need to simplify the capital gains structure for different asset classes and different durations. With the increasing deployment of gig workers by a number of sectors, it is time for the government to initiate discussions on extending provisions such as social security to gig workers. It is equally critical to build consensus among important stakeholders on this subject before a concrete announcement is made, to ensure their acceptance.”
New Delhi: B2B e-commerce company, IndiaMART InterMESH reported a rise of 60.68 per cent in its consolidated net profit to Rs 112.8 crore for the quarter that ended December 31, 2022. Its consolidated revenue from operations increased by 33.65 per cent to Rs 251.4 crore. ETRetail spoke to IndiaMart’s founder and CEO, Dinesh Agarwal to understand the company’s performance and strategy, and vision going forward.
Edited excerpts below:
How would you analyse your quarterly results?
It is a steady growth. On a standalone basis, we saw about 20-25 per cent of revenue collection with stable margins in the third quarter. Some one-off gains have also come.
You reported healthy margins. Where do you plan to invest?
As in the past, we will continue to return the money to the shareholders. As well as, we will continue to see if there are any good merger and acquisition opportunities, either from our own invested companies or outside that. We look for technology and SaaS-based business enablement software, which can add more value to us or IndiaMART can add more value to them. These are the synergies we look for. We will continue to add more layers of technology so that it becomes easier for buyers and sellers to transact.
How many registered sellers and buyers does IndiaMART have?
We have registered 165 million buyers so far and the number of sellers registered on our platform is 7.4 million SMEs. Out of this, we have 1,94,000 paid customer subscribers. We function across 95,000 plus categories.
What is your outlook to increase paid subscribers?
Our paid subscribers have gone up by 25 per cent on a Y-o-Y basis and 3 per cent on a Q-o-Q. We have added about 6,300 paid subscribers this quarter. We aim to add 8,000 paid subscribers every quarter.
Competition in B2B e-commerce space has increased significantly. What will be your strategy to stay ahead of the competition?
It is not easy to compare different B2B and SME platforms, as each has different characteristics. IndiaMART alone cannot solve all the problems and opportunities. We do not yet see any direct competition in the space we operate in.
Also, more buyers attract more suppliers and vice versa. As the number of buyers and suppliers keeps increasing, it becomes a more sticky platform. And it results in a high entry and high exit barrier for any platform. It also adds value to the new buyers and sellers, as they enjoy the benefits accumulated over the years.
IndiaMART holds approximately 60 per cent of the market share in B2B e-commerce. What is your vision 5 years from now?
We see ourselves as an integral part of the Indian economy and aim to make it easier for smaller players to compete with each other and create a level playing field.
Five years ago, all the categories of B2B products we see today, were hard to find. We democratized that information so that every small supplier has the ability to do promotion and lead generation through a platform like IndiaMART. 45 per cent of our traffic comes from beyond tier 1 and tier 2 cities. Hinterlands never had this supplier and pricing information, which is now democratised.
Over the next decade, we will continue to enrich this experience of finding buyers and suppliers, and products across categories. We want to create a trusted marketplace. Out of the 1,94,000 paid subscribers we have, almost 99 per cent are GST-registered and verified suppliers. It is a purely B2B business portal. We will continue to work in that direction and add business enablement layers.