Brijesh Agrawal, co-founder and director, IndiaMART InterMESH, spoke to Business Today's Taslima Khan on the launch of Tolexo, a marketplace that enable SMEs to sell besides listing their products.
Q. When was Tolexo launched?
A. The beta version was launched about a month ago, and we have been serving more than 150 plus customers. We have about 50,000 products available on the platform. We plan to take it to a million products in a year's time. We will leverage the IndiaMART platform, which has 1.5 million SMEs listed and we will be onboarding them.
Q. What has been the response so far?
A. The first few days have been exciting. We have already processed about 150 orders in the past three weeks, purely through sending out mailers to our existing customer base. We are going fairly aggressive with our customer acquisition and merchant acquisition platform. In the next three months, we should be probably doing about $100 a day.
Q. How did the idea for such a platform come about?
A. All the while IndiaMART has been focussed on what do we do to make these small and medium-sized businesses grow. The IndiaMART platform was essentially to help them reach out to potential buyers and get connected with them. That is what we started off with. We believe that we can make them grow further if we help them get connected with buyers and also help them place an order and buy the product. Most of these businesses stop growing because they don't have enough pipeline of orders. Most of these small businesses would be typically between Rs 4 crore and Rs 10 crore in size. They stop growing beyond that level because they cannot invest into people or brands. Quality is not the problem. Products from a large number of SMEs are great. Such a platform will help build their brand when users buy their products and post reviews.
Q. How will the platform work?
A. It will be exactly as Snapdea l. Sellers can list their products on Tolexo. Users can compare prices and reviews, and buy online. There won't be a listing fee. We will only get a cut on the actual sales made. We will take care of the complete user experience after the sales until the product is delivered. For deliveries we have partnered with FedEx, BlueDart, Delhivery and others. Sellers can choose to keep their goods in our warehouse or get the product get picked up from his premises.
Q. Globally which is the model you are trying to emulate?
A. We are following AmazonSupply, which is chasing a huge market in the US.
Q. This will be for both businesses and consumers?
A. This whole ecommerce movement, which started as a consumer movement, will be adopted by businesses big time. The distinction between B2B and B2C is going to die very soon. For buying consumables and supplies, which are very standardised products, businesses will like to buy online. The market for consumables and supplies or standardised products, which include hand tools, drill machines, screw drivers, office supplies, etc. is more than $100 billion in India itself, which is all offline. Tolexo will have millions of standard consumables and supplies. These are products wherein specifications are standardised and they don't change across brands. We don't have an organized form of retailing to get such products. They are only available in small hardware shops. For now we are staying away from core raw materials like cement.
Q. How will that help small companies in marketing or branding?
A. There may be a thousand makers of spectacle frames, for instance, in India and bigger brands obviously score in terms of brands preference. But preference is primarily on the basis of trust. If the trust factor can be built with these smaller companies, over time they will become brands themselves.
Q. Has IndiaMArt raised funding?
A. We bootstrapped for the first 12 years from 1996 to 2008. In 2008, we raised $10 million from Intel Capital. That is the only capital we raised and it is still in the bank. We have been profitable ever since. But capital comes in handy when we want to do an acquisition or we want to do a large marketing exercise. We took it at that time sensing potential threats from competition. However, we were able to beat them. Essentially it was Alibaba that was entering India at that point of time. We wanted to be sufficiently capitalized, so that we do not lose out on that fight.