Even as the growth of online retail start-ups has been hampered by regulations and fund crunch, a group of e-commerce entrepreneurs are sidestepping these issues by targeting a completely different section—the enterprise market.
Enterprise clients are fast becoming a lucrative market for online ventures in India like OfficeYes, Printland, Printvenue, eSupply and 1click1call, among others. Industry experts say the improvement in connectivity and infrastructure across the country has had a big role in the development of this business model.
"While they (business-to-business players) may not have the visibility in the larger consumer mindset, they have the visibility in the right target audience," said Ashvin Vellody, partner in management consulting at KPMG. A Technopak report estimates that the Indian ecommerce market will reach $200 billion (about Rs 10.8 lakh crore) by 2020. There is no reliable data on the Indian market for office services and supplies— either online or offline— but industry estimates pegged it at $15- 20 billion now.
"Unlike online retail sites that cater to a customer's need, we focus on a client's need. We are solving a pain point for them," said Sandeep Behl, cofounder of Printland, a year-old online printing solutions venture. There are many operational advantages too, say the entrepreneurs. "Not too many B2C e-commerce companies have positive margins after deducting marketing spends, while we have average margins of 15-20%," said OfficeYes cofounder Siddharth Nambiar, 29, a graduate from the University of Oxford's Said Business School. His company is targeting $3 million in revenue for this fiscal.
OfficeYes, launched last year, supplies office needs like stationery, cleaning supplies and furniture. Backed by Germany-based incubator Rocket Internet, OfficeYes has around 500 large corporate clients, such as Microsoft, GE and HCL, and around 6,000 SME clients. Printland's Behl, 49, who worked previously as the global head of customer service and enterprise services at Bharti Airtel, said repeat orders and large transaction values make this category attractive.
Printland, which has around 20,000 registered SME and corporate clients, has around 40% gross margins. The company, which is targeting over Rs 4 crore in revenue this fiscal and expects to reach Rs 100 crore in the next three years, lets clients order online for visiting cards, letter heads and printed corporate merchandise. About 40% of Printland's customers regularly order on the platform, while OfficeYes sees 50% repeat orders. The average transaction size ranges between Rs 30,000 and Rs 50,000 on most portals. These entrepreneurs have also refuted the popular belief that large firms do not order online.
"We find the online platform useful, as we can order whenever we want and there is minimum human error," said Praveen Choudhary, human resources head of Kyocera, an over- $14 billion Japanese electronics and ceramics company, which uses Printland for buying visiting cards, envelopes, letter heads and cash receipts. While OfficeYes and Printland are size-agnostic, Power2sme is an online group buying platform just for SMEs. The company, which is targeting to reach Rs 120 crore in revenue in fiscal 2013, raised $6 million from Accel Partners earlier this month. It had previously raised $2 million from Inventus Capital and Kalaari Capital.
Entrepreneurs in the B2B segment are also looking beyond office supplies. NPASource, which was launched in August 2011, aggregates non-performing assets of banks, puts up the details on its site, and helps customers buy them. "We realised there is a great gap in information available to investors who want to buy such properties," said Devendra Jain, 44, a chartered accountant, who is targeting revenue of Rs 6 crore in fiscal year 2014. "Banks are also not able to publicise details of such properties easily." The company has around 20,000 users and has tied up with around 10 banks so far, including SBI, IDBI Bank and NABARD.
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