SlideShare a Scribd company logo
1 of 7
Download to read offline
INDIAMART: Analysis of Business Model
Under the supervision and guidance of Dr.Vinay Singh
Anni Gupta (2013IPG-022)
ABV-IIITM, Gwalior
Madhya Pradesh, 474010
awesomeanni@gmail.com
Deepak Kumar (2013IPG-037)
ABV-IIITM, Gwalior
Madhya Pradesh, 474010
deepak62147@gmail.com
Abstract—This report explains about a Company based on
Freemium Business Model namely, INDIAMART. The objective
is to analyze the implementation of the freemium model and its
implications. The rampant growth of the company based on its
value propositions are also portrayed under this analysis of
business model.
Keywords—freemium; value proposition; business model; e-
commerce; e-business.
I. INTRODUCTION
IndiaMART is an Indian internet limited company
headquartered in Noida. It is an online business-to-
business B2B marketplace which matches buyers and
suppliers. It has about 1.5 million suppliers listed on its
website, with as many as 1 crore buyers visiting the company's
platform every month. In 2009, IAMAI conducted a study,
which declared that India MART has a 60 percent market
share in India's online B2B marketplace. It has also been
declared as the world's second largest online B2B marketplace
by Economic Times.
As on March 2014, IndiaMART had helped over 1.4 million
businesses market their products online with 10 million users
using the platform every month. IndiaMART was also making
significant investments to leverage the growth of mobile
internet penetration in India, by offering location-specific
search, and user profile-based personalization, for the
smartphone users.
Today, e-Commerce is entering the third phase with the focus
on how the internet can impact profitability. We call this phase
e-business and it includes all the applications and processes
enabling a company to service a business transaction. In
addition to encompassing e-commerce, e-business includes
both front and back office applications that form the core
engine for modern business. Thus, e-business is not just about
e-commerce transactions or buying and selling over the web;
it’s the overall strategy of redefining old business models,
with the aid of technology, to maximize customer value and
profits. To paraphrase Business Week, “Forget B2B or B2C,
e-Business is about P2P – path to profitability
Fig.1: IndiaMART LOGO
II. ORIGIN OF THE E-COMMERCE PLATFORM
After returning from the US in 1996, Dinesh Agarwal started
Intermesh, a company that made websites for Delhi-based
companies like Nirula's. He then created India MART, a
website directory of the sites that his company created. In
1998, he set up the second office in Mumbai. By 1999, around
1,000 clients were added to the list. After the US terror attack
on 11 September 2001, India MART's revenue fell by nearly
40 per cent but the company overcame the slump. In early
2009, IndiaMART raised an undisclosed amount of money
from Intel Capital. A total of $23 million was invested in India
MART 197 Communications and Global Talent
Track. Building on the platform for suppliers, it also created a
buyer-dedicated forum in 2011. Today, India MART has 40
offices in 100 cities across the country and total employee
count of 2600. Of these, 800 employees work at the head
office in Noida, Uttar Pradesh. India MART roped in Irrfan
Khan as its brand ambassador for its latest brand campaign
that went live in November 2014.
Fig.2: IndiaMART Web Portal
III. SERVICES AND OFFERINGS
With this was born IndiaMART the first company in India to
provide directory services for exporters and importers on the
net. Initially, for IndiaMART, the project was that of
collecting the queries and forwarding the same to the
merchants free of cost. It seemed to be a big boost for the
SME (small & medium enterprise) who otherwise would
never have even think of selling their goods globally on their
own. The next important revenue source is the B2B auctions,
which was launched last year in December. In fact this
addition of auctions on to the site has given IndiaMART a
opportunity to cash to the high visibility that it has earned for
itself for the past few years.
The Auction platform, which is the biggest in Asia, caters to
over five lakh global B2B buyers that visit IndiaMART every
month. Here suppliers can register online and list their
inventory for auction on an annual basis. The seller decides on
the Reserve Price, Minimum bid price and bid increment
amount. Interested buyers can bid on the items listed free of
cost after going through the product information online. After
the auction times out the seller is introduced to the winner to
complete the transaction. The success of the B2B auction
portal can be gauged from the fact form its introduction in Dec
2001 it has already earned through commissions Rs. 0.48 lakh
for the last financial year. The other income streams for
IndiaMART are Web advertising which accounted for Rs
35.86 lakhs, e-business solutions worth Rs. 24.21 lakhs and
co-branded online promotion campaigns for Rs 21 lakh.
Fig.3: IndiaMART Services & Offerings
Internet Profile:
IV. VALUE CHAIN ANALYSIS
The value chain analysis for IndiaMART brings forth the key
primary activities are;
 Maintaining database of suppliers.
 Directory listing and categorization.
 Manage queries and buy-sell transactions.
 Delivery and payments.
 Suppliers rating.
 Key support activities include;
 Focus on product, process and business model
innovation.
 Setting up technology and operational benchmarks.
 Setting up infrastructure (Technology and physical
setup)
Fig.4: IndiaMART Value Chain
V. VALUE PROPOSITION
IndiaMART defined its business around the key objective of
more buyers, more suppliers and more business. The rationale
behind this objective was that the creation of a technology
platform as a virtual market place would lead to growth in
business by bridging the connectivity and accessibility barriers
between small-scale suppliers in India and global buyers.
For suppliers, the value proposition included;
 Increase in revenues by having access to global
buyers.
 Access to information on competitive market
trends.
 For buyers, the value proposition included;
 Access to network of suppliers offerings.
 Access to feedback and rating of suppliers.
 Ease of evaluation and transactions.

VI. THE COMPETITION
The Competition IndiaMART’s biggest and nearest
competitor was Alibaba.com a China-based e-commerce
company, founded by Jack Ma a former English teacher and
18 others in 1999. Other competitors included Justdial,
TradeIndia, globalsources.com, thomasnet.com among many
others.
Although all of them offered lead generation and were
matchmaking platforms bringing buyers and sellers together,
each of them had a different focus. IndiaMART for instance,
focused on its suppliers’ directory, whereas Alibaba focused
on products, TradeIndia on print media and Justdial on
telephone services. Though these online trading companies
served the SME market to a certain extent, they were present
across markets, and sometimes even overlapped in their
listings.
According to a report by the Federation of Indian Export
Organizations (FIEO), exports through the e-commerce route
had grown over 400 % to $1.4 billion from 2010 to 20128.
According to Forrester Research Inc., a market research firm,
e-commerce sales in 2013 were estimated at about $1.6
billion9.
However, exports declined 1.76% to $300.6 billion in 2012-
201310. According to Ernst & Young, India's B2B market in
2011 stood at just US$50.37 million, a fraction of a small but
rapidly growing domestic e-commerce market of US$10
billion11.
As various models evolved and coexisted, the B2B
opportunity in India began to attract attention from many
players.
Alibaba Group: The Alibaba Group, China's leading B2B e-
commerce Company, was started to cater to small businesses.
The Group’s major businesses included Taobao Marketplace -
an online shopping site, Tmall.com a platform for online
shopping for top-quality international and Chinese branded
merchandise, Juhuasuan - a buying platform, 1688 - a
wholesale marketplace for domestic China trade among small
businesses, AliExpress - an e-marketplace for global
consumers, Alibaba.com - a global wholesale platform for
small businesses, Alibaba Cloud Computing for developing
platforms for cloud computing and data management and
Alipay to facilitate online and mobile payment solutions in
China.
Alibaba went public with its maiden IPO in 2007 at a
valuation of US$10 Biliion, which grew past US$ 17 Billion
within no time. Immediately after its IPO, Alibaba opened
offices in India and started marketing its services to Indian
Exporters. Later, they partnered with Mumbai-based yellow
pages services company, Infomedia India.
In India, Alibaba.com drove various local initiatives, for
instance, workshops were conducted to train supplier members
on how best to leverage e-commerce and how to make the
most of their account. Alibaba.com had local offices in
Mumbai, Delhi, Chennai, Bangalore and Ahmedabad.
Comparing the Indian market with its major competitors,
Khalid Isar, the Country General Manager of Alibaba.com
India, said, “India is a unique market as the characteristics of
Indian SMEs are very different to Chinese counterparts. For
instance, what may work well for a supplier in India, with
local buyers, may not work with a buyer in China, as cultural,
technological and socioeconomic factors have an impact on
local businesses. Indian businesses on the Alibaba.com
platform also differ from other markets as they have a
language advantage. This allows them to respond to inquiries
in a timely and efficient manner while reducing language-
barrier issues12.”
Alibaba.com’s unaudited financial profits for March end 2012
were USD53.8 million, with a total of 79.8 million registered
users, 10.3 million storefronts and 753,955 paying
members13.
Justdial: A search service provider with a database of listings
across categories was founded by VSS Mani. The company
started offering local search services in 1996 under the Justdial
brand, and became a dotcom company in 2007. It was the first
mover in this space in India.
In 2013, Justdial had a database of approximately 9.1 million
listings, of which 2.39 lakh listings were paid campaigns. It
addressed 364 million search requests across multiple
platforms, such as the internet, mobile Internet, over the
telephone (voice) and text (SMS), with 68% of the search
requests from the internet. The business model was to offer a
dial-in number which was an operator assisted, hot line
accessible, 24/7 with multi lingual support. Business owners
had the option of listing their business on the database for free
and if they wanted priority in listing or prominence, Justdial
charged a fee. Justdial was listed on the Bombay stock
exchange in 2013. In the first quarter of 2014, Justdial’s
revenues grew 28.3 % over the same period in 2012-13 to
around Rs.271 crore, while its net profit rose 82.2 % to Rs.57
crore. The organization had a market capitalization of
Rs.12,430 crores and ranked 99th in the 100 most valuable
companies in India in 201414. In the same year, Justdial
initiated a ‘Search Plus’ Service for users, in order to
transition from being a provider of local search and related
information to being an enabler of such transactions. Justdial
had its registered and corporate offices based in Mumbai, with
branches in Ahmedabad, Bengaluru, Chandigarh, Chennai,
Coimbatore, Delhi, Hyderabad, Jaipur, Kolkata and Pune.
Tradeindia.com: Tradeindia, headquartered in New Delhi,
with pan India operations was maintained and promoted by
Infocom Network Ltd, and conceptualized in 1996. The
business model was to take the offline yellow pages model
online.
Tradeindia received an average of 20.5 million hits per
month. In 2013, the platform had a database of 27,44,394
registered users15. Tradeindia’s revenues were earned from
listings which ran into several lakhs with charges ranging from
Rs.3,000-13,000 annually.
Global Sources Ltd.: It was a Hong-Kong based business-to-
business media company that provided information and
integrated marketing services, with a particular focus on the
Greater China market. The Company, together with its
subsidiaries, provides services that allowed global buyers to
identify suppliers and products, and enabled suppliers to
market their products to a number of buyers. It operated in
three segments: online and other media services, exhibitions
and other segments.
Thomasnet.com: It was an information and technology
company that connected manufacturing and industrial buyers
and sellers. The platform had a news section which covered
product news, information, business trends and analysis
Some platforms also catered to niche products or services,
like, for instance, the e-commerce Kolkata-based Mjunction
Services, which ran Metaljunction, the world's largest online
marketplace for steel and allied products. The MetalJunction
portal, the largest e-marketplace for steel in the world, was a
50:50 online steel sales and procurement joint venture
between SAIL and Tata Steel, and followed a transaction-led
model. It had sold over 4 million tonnes of steel for its clients
at an average rate of 150,000 tonnes per month. Its over 5,400
strong buyer community comprised of traders, fabricators, re-
rollers and end-users.
VII. DOMESTIC FOCUS AND RAPID GROWTH (2007-2010)
2007-10 was an interesting phase in the evolution of Internet-
based businesses in India, as well as IndiaMART’s growth
strategy. Indian currency had appreciated significantly against
US$ and reached to Rs.38 for 1 US$, severely impacting the
export from India. This was followed by the global financial
meltdown in 2008 – arguably the worst economic crisis since
the Great depression of the 1930s. India was no exception, and
the rules of the game changed dramatically.
A customer base of over 10,000 posed a fresh set of problems
for IndiaMART. High dependence on low skilled manpower
led of increasing number of errors in customer catalogues,
resulting in an increase in customer churn; while higher
inflation was pushing the costs up.
The meltdown took Dinesh back to the era of 2001, albeit with
one difference – now, there was money in the bank, and a
competent team in place to execute. Dinesh got down to doing
what he did best – re-engineering processes to improve
efficiencies and protect its operating margins.
IndiaMART decided to increase the subscription price and
also launched the scheme, wherein customers could pay for
two years and get the subscription for the third year absolutely
free of cost. Three year lock-in helped in reducing customer
churn. Premium listing was also contributing in improving the
ARPU.
To reduce human errors, template based mini-dynamic
catalogue was launched. It replaced the custom made
microsite, and the subscription price was increased from Rs.
9000. to Rs. 15000.
From a customer’s perspective also, it was a good move, as
the single page microsite was upgraded to a 5-page dynamic
catalogue with many features. Templates led to elimination of
errors and reduced dependence on low skilled design team –
there was a significant increase in the quality of catalogues.
All these changes gave a great boost to the overall sales
performance of the company.
During the same period, search engines, Google in particular,
realized that people searching through the Internet preferred to
see local results and therefore, modified it and made it locally
relevant. This implied that search results would prioritize links
to pages that were in the same geography as the user. For
IndiaMART, it meant that their appearance in the international
search results (made by prospective buyers) would be lower
than before. For instance, if one searched for “pencil
suppliers” from a PC in Mountain View, CA, the top ranked
results would include suppliers from that geography, rather
than a global listing of suppliers (including the IndiaMART
writing instruments category page). This shift by Google to
provide locally relevant search helped IndiaMART garner a
huge share of domestic B2B (business-to-business) trade.
Two developments took place at IndiaMART. With the
rapidly increasing domestic adoption, IndiaMART started to
shift its focus from international business to domestic
business. The shift meant that another round of product
innovation was required. Dinesh instructed his team to step
out and meet customers to gauge their reaction to the slump in
export business. As anticipated, the feedback was clear that
the exporters who were earlier averse to domestic orders had
started catering to local clientele, despite the drop in margins.
There was a huge business opportunity amidst this crisis –
domestic focus meant rapid growth in the market size;
possibility of building an online business community in a
highly fragmented domestic B2B marketing segment started to
look much more appealing than the international business.
Dinesh & Brijesh decided to raise capital and invest in
products with an aim to establish its leadership position in the
domestic market. IndiaMART raised US $10 Million from
Intel Capital in 2008.
While the revised business strategy was getting formulated,
IndiaMART had already started re-modelling the online
directory behind the scenes. In fact, the process was initiated
long time back – to transform IndiaMART.com from a
company directory into a giant product catalogue.
Until then, IndiaMART offered only a two-liner business
description to Free Listed companies, and its product
catalogue was derived from its paying customers. Dinesh
decided to offer a full-featured business catalogue to all free
listed companies as well– and suddenly the product catalogue
started to grow in leaps and bounds. The sales team evaluated
on a regular basis if clients benefitted from the domestic focus.
The move helped IndiaMART in retaining its preferred
positioning in Google, as even with its changed algorithm,
Google continued to find high quality content to show to its
users. Google’s locally relevant searches helped IndiaMART
garner a huge share of domestic B2B (business-to-business)
trade.
Investments made by BCCL in 2006 and Intel Capital in 2008,
significantly aided the growth intent. Following these
investments, IndiaMART built a professional board filled with
independent directors, including well-respected business
leaders like Sarayu Srinivasan (Intel Capital), Nachiket Mor
(ICICI), Deep Kalra (MakeMyTrip.com), and PN Vijay
(Investment Advisory). This reconstituted board helped
IndiaMART significantly in disciplined financial reporting.
Increased internet awareness and its usage as a marketing tool
implied that many SMEs were using IndiaMART as their chief
source of buy leads. More and more SMEs who used free
listings as a trial converted into paid subscribers on the
IndiaMART platform, resulting in IndiaMART achieving
around US$ 750 ARPU in 2009.
By 2010, IndiaMART had 14,000 Paying subscribers and had
achieved its ARPU target of US$1000 per paying customer.
The annual cash collection topped Rs.61 Crore. This was
achieved partly by increasing the subscription pricing, and
partly from premium listing solutions.
Dinesh presented an aggressive plan to its Board, a plan which
was based on rapid customer acquisition. It was an audacious
move, after staying profitable for 12 consecutive years,
IndiaMART was now prepared to tread the path of high cash
burn. The revised aim was to grow to 1 million listed
businesses and 100,000 paying customers.
By 2010, after strongly trying to gain market-share for two
years, Alibaba, IndiaMART’s closest and biggest competitor,
had started to reduce its focus from the Indian market. It was
clear that it aimed at only those companies which were
focusing on Exports from India – apparently it did not show
any intent of serving India’s domestic B2B Businesses.
IndiaMART’s “Do-it-for-me” approach, as against “Do-it-
Yourselves” approach of Alibaba, coupled with the large
differences in Internet adoption within Indian SMEs and
Chinese SMEs, turned out to be the biggest roadblocks in
Alibaba’s path.
VIII.RAMPANT CUSTOMER ACQUISITION (2010-2012)
By 2010, the internet penetration and usage landscape in India
had changed significantly. MakeMyTrip, one of the leading
online travel agencies, had created history by listing on
Nasdaq with a bumper IPO. There was a renewed faith of
investors in online businesses. Several online ventures had
received initial round of funding, and had also started
advertising heavily in the traditional media to create
awareness about their businesses.
IndiaMART embarked on an ambitious customer acquisition
target of 100,000 SME subscribers. Sales closures were
monitored by the week (as opposed to by the month, as was
the norm until 2008). Further, in order to accelerate their
customer acquisition efforts, IndiaMART opened offices at the
rate of one per week – at times, several within the same city.
In just the year 2010, IndiaMART opened 52 offices in 52
weeks – the idea was to ensure that a sales person officers
(commonly referred to as “Feet on the Street”) should not
travel more than 30 minutes to meet a customer. Attractive
incentive plans were offered to motivate the sales team to go
out and bring in more customers. With burgeoning number of
sales officers, IndiaMART acquired about 21,000 new
customers in 2010, and another 28,000 customers in 2011.
The size of the domestic business went up to 80% of
IndiaMART’s volumes due to these rampant customer
acquisitions. Within a span of two years, the rate of customer
acquisition had climbed to 2500 customers a month, from
around 400 customers a month. IndiaMART had spent Rs.40
Crore in a year in branding and customer acquisition process.
During this period, IndiaMART also re-located its corporate
office to a larger and far-superior facility on NoidaGreater
Noida Expressway.
The growth in customer acquisition, however, brought with it
a variety of problems. It exposed chinks in the organizational
processes that were designed to support a lower growth,
resulting in the acquisition of non-relevant customers –
essentially the ones who could not have benefited from the
IndiaMART platform.
Fig.5: IndiaMART’s customer acquisition process
IX. CONCLUSION OF THE BUSINESS MODEL
The company followed a Freemium (free + premium) business
model, where it offered certain services for free to the MSMEs
and charged for the registration fee for the premium services.
This approach helped to build awareness and acceptance
among the MSMEs, especially those who are not willing to
avail the fee based services without seeing the results. The
free registration on IndiaMART enabled the MSMEs to get an
online presence and access to global market. Once the MSME
felt happy and found value in having presence with India mart,
they had the option of upgrading themselves for a paid
membership, which entitled them an access to premium
services like web catalogues, priority listing and trusted seal
rating. The company also introduce pay per lead model to the
MSMEs which provided the facility of choosing relevant
business lead at India mart website with nominal amount and
continuing the same. The platform will also avail support
services including logistics, insurance buyer verification and
sampling services online to participating members through a
tie-up with global verification giant SGS (Société Générale
de Surveillance, Geneva) to help build trust in online trade.
India MART is already talking to ICICI and Citibank for
provision of online payment gateway services for B2B
transactions through the portal.
Fig.6: Freemium Model
A conservative estimate by the company reveals B2B
transactions worth Rs 1,200 crores through the portal in the
current year, resulting from estimated 3000 online auction
deals. In addition, IndiaMART is confident of achieving at
least 2,500 online0 catalogues of member businesses on the
portal by the end of the year, making IndiaMART.com the
largest Indian B2B portal, not far behind those largest in the
world. IndiaMART.com offers products that enable small &
medium size businesses generate business leads (online
catalogs/store-fronts), establish their credibility (third party
verified trust profile) and use business information (finance,
news, trade shows, tenders) for their business promotion.
REFERENCES
[1] http://www.authorstream.com/Presentation/Triggr-1084248-
IndiaMART-case-study/
[2] http://www.digitalbusinessmodelguru.com/2013/03/how-to-analyze-
business-model.html
[3] http://www.slideshare.net/nayananayana355/ecommerce-
assignment?qid=a19a93b6-6ecb-463b-8a17-
a9643efb307c&v=&b=&from_search=15
[4] https://www.quora.com/Whats-the-best-way-to-analyse-a-business-
model-of-a-company
Indiamart  Analysis

More Related Content

What's hot

Presentation of d mart
Presentation of d martPresentation of d mart
Presentation of d mart
ganaraya
 
ITC Classmate Brand Extension
ITC Classmate Brand ExtensionITC Classmate Brand Extension
ITC Classmate Brand Extension
Sameer Mathur
 

What's hot (20)

PowerPoint Presentation on Meesho
PowerPoint Presentation on MeeshoPowerPoint Presentation on Meesho
PowerPoint Presentation on Meesho
 
Product Marketing Strategy.
Product Marketing Strategy.Product Marketing Strategy.
Product Marketing Strategy.
 
Presentation of d mart
Presentation of d martPresentation of d mart
Presentation of d mart
 
Myntra strategy
Myntra strategyMyntra strategy
Myntra strategy
 
Flipkart integrated marketing communication ppt
Flipkart integrated marketing communication pptFlipkart integrated marketing communication ppt
Flipkart integrated marketing communication ppt
 
Ppt on Reliance jio
Ppt on Reliance jioPpt on Reliance jio
Ppt on Reliance jio
 
D'mart supply chain management
D'mart supply chain managementD'mart supply chain management
D'mart supply chain management
 
Flipkart
Flipkart Flipkart
Flipkart
 
The Story of LensKart
The Story of LensKartThe Story of LensKart
The Story of LensKart
 
Flipkart success story
Flipkart success storyFlipkart success story
Flipkart success story
 
HUL Distribution Model
HUL Distribution ModelHUL Distribution Model
HUL Distribution Model
 
Complete marketing analysis of Flipkart.
Complete marketing analysis of Flipkart. Complete marketing analysis of Flipkart.
Complete marketing analysis of Flipkart.
 
Business Analysis of Paytm
Business Analysis of PaytmBusiness Analysis of Paytm
Business Analysis of Paytm
 
Paytm
PaytmPaytm
Paytm
 
ITC Classmate Brand Extension
ITC Classmate Brand ExtensionITC Classmate Brand Extension
ITC Classmate Brand Extension
 
Hul ppt scm
Hul ppt scmHul ppt scm
Hul ppt scm
 
Flipkart business model
Flipkart business modelFlipkart business model
Flipkart business model
 
Study of “Flipkart.com”: India’s Leading E-business Portal
Study of “Flipkart.com”: India’s Leading E-business PortalStudy of “Flipkart.com”: India’s Leading E-business Portal
Study of “Flipkart.com”: India’s Leading E-business Portal
 
Nykaa.com ppt
Nykaa.com pptNykaa.com ppt
Nykaa.com ppt
 
Flipkart - Strategic Business Management
Flipkart - Strategic Business ManagementFlipkart - Strategic Business Management
Flipkart - Strategic Business Management
 

Similar to Indiamart Analysis

Marketing plan for Buildabazaar
Marketing plan for BuildabazaarMarketing plan for Buildabazaar
Marketing plan for Buildabazaar
Rishabh Singh
 
Ppt buyonlineindia case study
Ppt buyonlineindia case studyPpt buyonlineindia case study
Ppt buyonlineindia case study
GAURAV SHARMA
 
ONLINE B2B MARKETPLACES
ONLINE B2B MARKETPLACESONLINE B2B MARKETPLACES
ONLINE B2B MARKETPLACES
kiruthikanaga
 
Web Market Space_B2B Project
Web Market Space_B2B ProjectWeb Market Space_B2B Project
Web Market Space_B2B Project
Mohan Suyamburaj
 

Similar to Indiamart Analysis (20)

E-commerce assignment
E-commerce assignmentE-commerce assignment
E-commerce assignment
 
Indiamart.com
Indiamart.comIndiamart.com
Indiamart.com
 
Flipkart, amazon, snapdeal SWOT analysis
Flipkart, amazon, snapdeal SWOT analysisFlipkart, amazon, snapdeal SWOT analysis
Flipkart, amazon, snapdeal SWOT analysis
 
business-to-business
business-to-businessbusiness-to-business
business-to-business
 
Study on ecommerce opportunities in india
Study on ecommerce opportunities in indiaStudy on ecommerce opportunities in india
Study on ecommerce opportunities in india
 
PROJECT REPORT ON “E-COMMERCE”
PROJECT REPORT ON “E-COMMERCE”PROJECT REPORT ON “E-COMMERCE”
PROJECT REPORT ON “E-COMMERCE”
 
Marketing plan for Buildabazaar
Marketing plan for BuildabazaarMarketing plan for Buildabazaar
Marketing plan for Buildabazaar
 
Ppt buyonlineindia case study
Ppt buyonlineindia case studyPpt buyonlineindia case study
Ppt buyonlineindia case study
 
E commerce and Make in india
E commerce and Make in indiaE commerce and Make in india
E commerce and Make in india
 
B2b web portals
B2b web portalsB2b web portals
B2b web portals
 
ONLINE B2B MARKETPLACES
ONLINE B2B MARKETPLACESONLINE B2B MARKETPLACES
ONLINE B2B MARKETPLACES
 
Simple draft on Snapdeal case write up
Simple draft on Snapdeal case write upSimple draft on Snapdeal case write up
Simple draft on Snapdeal case write up
 
Case study analysis of Alibaba.com
Case study analysis of Alibaba.com Case study analysis of Alibaba.com
Case study analysis of Alibaba.com
 
Training module tradeget
Training module tradegetTraining module tradeget
Training module tradeget
 
Indiatimes shopping market analysis
Indiatimes shopping market analysisIndiatimes shopping market analysis
Indiatimes shopping market analysis
 
Online Shopping Behaviour in India
Online Shopping Behaviour in IndiaOnline Shopping Behaviour in India
Online Shopping Behaviour in India
 
Alibaba Case Study on Strategic Management
Alibaba Case Study on Strategic ManagementAlibaba Case Study on Strategic Management
Alibaba Case Study on Strategic Management
 
CASE STUDY ON GROWING SAGA OF E – COMMERCE GIANT SNAPDEAL IN INDIA WITH SPECI...
CASE STUDY ON GROWING SAGA OF E – COMMERCE GIANT SNAPDEAL IN INDIA WITH SPECI...CASE STUDY ON GROWING SAGA OF E – COMMERCE GIANT SNAPDEAL IN INDIA WITH SPECI...
CASE STUDY ON GROWING SAGA OF E – COMMERCE GIANT SNAPDEAL IN INDIA WITH SPECI...
 
Web Market Space_B2B Project
Web Market Space_B2B ProjectWeb Market Space_B2B Project
Web Market Space_B2B Project
 
E-commerce
E-commerceE-commerce
E-commerce
 

More from ANNI GUPTA

More from ANNI GUPTA (20)

Indian Insurance Sector Market Analysis
Indian Insurance Sector Market AnalysisIndian Insurance Sector Market Analysis
Indian Insurance Sector Market Analysis
 
GSTN Report
GSTN Report GSTN Report
GSTN Report
 
GSTN Analysis
GSTN AnalysisGSTN Analysis
GSTN Analysis
 
Beverage Industry Analysis
Beverage Industry AnalysisBeverage Industry Analysis
Beverage Industry Analysis
 
GST INDIA: Impact Analysis
GST INDIA: Impact AnalysisGST INDIA: Impact Analysis
GST INDIA: Impact Analysis
 
Presentation Template
Presentation TemplatePresentation Template
Presentation Template
 
Core Competencies
Core Competencies Core Competencies
Core Competencies
 
FINANCIAL ANALYTICS
FINANCIAL ANALYTICSFINANCIAL ANALYTICS
FINANCIAL ANALYTICS
 
Operations at Coca Cola
Operations at Coca ColaOperations at Coca Cola
Operations at Coca Cola
 
McDonalds Marketing Strategy Report
McDonalds Marketing Strategy ReportMcDonalds Marketing Strategy Report
McDonalds Marketing Strategy Report
 
McDonalds
McDonaldsMcDonalds
McDonalds
 
Information System Implementation of Procter and Gamble
Information System Implementation of Procter and GambleInformation System Implementation of Procter and Gamble
Information System Implementation of Procter and Gamble
 
Perception and Decision Making
Perception and Decision MakingPerception and Decision Making
Perception and Decision Making
 
Dainik Bhaskar Jaipur doc
Dainik Bhaskar Jaipur docDainik Bhaskar Jaipur doc
Dainik Bhaskar Jaipur doc
 
Steve Jobs Vs Bill Gates
Steve Jobs Vs Bill GatesSteve Jobs Vs Bill Gates
Steve Jobs Vs Bill Gates
 
Procter and Gamble
Procter and Gamble Procter and Gamble
Procter and Gamble
 
Dainik Bhaskar Jaipur
Dainik Bhaskar JaipurDainik Bhaskar Jaipur
Dainik Bhaskar Jaipur
 
Digital india
Digital indiaDigital india
Digital india
 
How GOOGLE works? - A Must Read
How GOOGLE works? - A Must ReadHow GOOGLE works? - A Must Read
How GOOGLE works? - A Must Read
 
Core Competencies
Core CompetenciesCore Competencies
Core Competencies
 

Recently uploaded

obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...
obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...
obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...
yulianti213969
 
Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312
LR1709MUSIC
 
Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metrics
CaitlinCummins3
 

Recently uploaded (20)

How does a bike-share company navigate speedy success? - Cyclistic
How does a bike-share company navigate speedy success? - CyclisticHow does a bike-share company navigate speedy success? - Cyclistic
How does a bike-share company navigate speedy success? - Cyclistic
 
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
 
Mastering The Art Of 'Closing The Sale'.
Mastering The Art Of 'Closing The Sale'.Mastering The Art Of 'Closing The Sale'.
Mastering The Art Of 'Closing The Sale'.
 
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deck
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deckPitch Deck Teardown: Goodcarbon's $5.5m Seed deck
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deck
 
WheelTug Short Pitch Deck 2024 | Byond Insights
WheelTug Short Pitch Deck 2024 | Byond InsightsWheelTug Short Pitch Deck 2024 | Byond Insights
WheelTug Short Pitch Deck 2024 | Byond Insights
 
A DAY IN LIFE OF A NEGOTIATOR By Pondicherry University MBA Students.pptx
A DAY IN LIFE OF A NEGOTIATOR By Pondicherry University MBA Students.pptxA DAY IN LIFE OF A NEGOTIATOR By Pondicherry University MBA Students.pptx
A DAY IN LIFE OF A NEGOTIATOR By Pondicherry University MBA Students.pptx
 
obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...
obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...
obat aborsi jakarta wa 081336238223 jual obat aborsi cytotec asli di jakarta9...
 
Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312Shots fired Budget Presentation.pdf12312
Shots fired Budget Presentation.pdf12312
 
Chapter 2 Organization Structure of a Treasury
Chapter 2 Organization Structure of a TreasuryChapter 2 Organization Structure of a Treasury
Chapter 2 Organization Structure of a Treasury
 
Pixar Case Analysis.....................
Pixar Case Analysis.....................Pixar Case Analysis.....................
Pixar Case Analysis.....................
 
Sex service available my WhatsApp number 7374088497
Sex service available my WhatsApp number 7374088497Sex service available my WhatsApp number 7374088497
Sex service available my WhatsApp number 7374088497
 
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdfThe Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
 
HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024
 
Presentation on cross cultural negotiations.
Presentation on cross cultural negotiations.Presentation on cross cultural negotiations.
Presentation on cross cultural negotiations.
 
Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metrics
 
Ital Liptz - all about Itai Liptz. news.
Ital Liptz - all about Itai Liptz. news.Ital Liptz - all about Itai Liptz. news.
Ital Liptz - all about Itai Liptz. news.
 
Thompson_Taylor_MBBS_PB1_2024-03 (1)- Project & Portfolio 2.pptx
Thompson_Taylor_MBBS_PB1_2024-03 (1)- Project & Portfolio 2.pptxThompson_Taylor_MBBS_PB1_2024-03 (1)- Project & Portfolio 2.pptx
Thompson_Taylor_MBBS_PB1_2024-03 (1)- Project & Portfolio 2.pptx
 
SCI9-Q4-MOD9.pdfetiwtitw3i3uu45w5wtitwjt
SCI9-Q4-MOD9.pdfetiwtitw3i3uu45w5wtitwjtSCI9-Q4-MOD9.pdfetiwtitw3i3uu45w5wtitwjt
SCI9-Q4-MOD9.pdfetiwtitw3i3uu45w5wtitwjt
 
Navigating Tax Season with Confidence Streamlines CPA Firms
Navigating Tax Season with Confidence Streamlines CPA FirmsNavigating Tax Season with Confidence Streamlines CPA Firms
Navigating Tax Season with Confidence Streamlines CPA Firms
 
Solar Panel Installation A Comprehensive Guide.pdf
Solar Panel Installation A Comprehensive Guide.pdfSolar Panel Installation A Comprehensive Guide.pdf
Solar Panel Installation A Comprehensive Guide.pdf
 

Indiamart Analysis

  • 1. INDIAMART: Analysis of Business Model Under the supervision and guidance of Dr.Vinay Singh Anni Gupta (2013IPG-022) ABV-IIITM, Gwalior Madhya Pradesh, 474010 awesomeanni@gmail.com Deepak Kumar (2013IPG-037) ABV-IIITM, Gwalior Madhya Pradesh, 474010 deepak62147@gmail.com Abstract—This report explains about a Company based on Freemium Business Model namely, INDIAMART. The objective is to analyze the implementation of the freemium model and its implications. The rampant growth of the company based on its value propositions are also portrayed under this analysis of business model. Keywords—freemium; value proposition; business model; e- commerce; e-business. I. INTRODUCTION IndiaMART is an Indian internet limited company headquartered in Noida. It is an online business-to- business B2B marketplace which matches buyers and suppliers. It has about 1.5 million suppliers listed on its website, with as many as 1 crore buyers visiting the company's platform every month. In 2009, IAMAI conducted a study, which declared that India MART has a 60 percent market share in India's online B2B marketplace. It has also been declared as the world's second largest online B2B marketplace by Economic Times. As on March 2014, IndiaMART had helped over 1.4 million businesses market their products online with 10 million users using the platform every month. IndiaMART was also making significant investments to leverage the growth of mobile internet penetration in India, by offering location-specific search, and user profile-based personalization, for the smartphone users. Today, e-Commerce is entering the third phase with the focus on how the internet can impact profitability. We call this phase e-business and it includes all the applications and processes enabling a company to service a business transaction. In addition to encompassing e-commerce, e-business includes both front and back office applications that form the core engine for modern business. Thus, e-business is not just about e-commerce transactions or buying and selling over the web; it’s the overall strategy of redefining old business models, with the aid of technology, to maximize customer value and profits. To paraphrase Business Week, “Forget B2B or B2C, e-Business is about P2P – path to profitability Fig.1: IndiaMART LOGO II. ORIGIN OF THE E-COMMERCE PLATFORM After returning from the US in 1996, Dinesh Agarwal started Intermesh, a company that made websites for Delhi-based companies like Nirula's. He then created India MART, a website directory of the sites that his company created. In 1998, he set up the second office in Mumbai. By 1999, around 1,000 clients were added to the list. After the US terror attack on 11 September 2001, India MART's revenue fell by nearly 40 per cent but the company overcame the slump. In early 2009, IndiaMART raised an undisclosed amount of money from Intel Capital. A total of $23 million was invested in India MART 197 Communications and Global Talent Track. Building on the platform for suppliers, it also created a buyer-dedicated forum in 2011. Today, India MART has 40 offices in 100 cities across the country and total employee count of 2600. Of these, 800 employees work at the head office in Noida, Uttar Pradesh. India MART roped in Irrfan Khan as its brand ambassador for its latest brand campaign that went live in November 2014. Fig.2: IndiaMART Web Portal
  • 2. III. SERVICES AND OFFERINGS With this was born IndiaMART the first company in India to provide directory services for exporters and importers on the net. Initially, for IndiaMART, the project was that of collecting the queries and forwarding the same to the merchants free of cost. It seemed to be a big boost for the SME (small & medium enterprise) who otherwise would never have even think of selling their goods globally on their own. The next important revenue source is the B2B auctions, which was launched last year in December. In fact this addition of auctions on to the site has given IndiaMART a opportunity to cash to the high visibility that it has earned for itself for the past few years. The Auction platform, which is the biggest in Asia, caters to over five lakh global B2B buyers that visit IndiaMART every month. Here suppliers can register online and list their inventory for auction on an annual basis. The seller decides on the Reserve Price, Minimum bid price and bid increment amount. Interested buyers can bid on the items listed free of cost after going through the product information online. After the auction times out the seller is introduced to the winner to complete the transaction. The success of the B2B auction portal can be gauged from the fact form its introduction in Dec 2001 it has already earned through commissions Rs. 0.48 lakh for the last financial year. The other income streams for IndiaMART are Web advertising which accounted for Rs 35.86 lakhs, e-business solutions worth Rs. 24.21 lakhs and co-branded online promotion campaigns for Rs 21 lakh. Fig.3: IndiaMART Services & Offerings Internet Profile: IV. VALUE CHAIN ANALYSIS The value chain analysis for IndiaMART brings forth the key primary activities are;  Maintaining database of suppliers.  Directory listing and categorization.  Manage queries and buy-sell transactions.  Delivery and payments.  Suppliers rating.  Key support activities include;  Focus on product, process and business model innovation.  Setting up technology and operational benchmarks.  Setting up infrastructure (Technology and physical setup) Fig.4: IndiaMART Value Chain V. VALUE PROPOSITION IndiaMART defined its business around the key objective of more buyers, more suppliers and more business. The rationale behind this objective was that the creation of a technology platform as a virtual market place would lead to growth in
  • 3. business by bridging the connectivity and accessibility barriers between small-scale suppliers in India and global buyers. For suppliers, the value proposition included;  Increase in revenues by having access to global buyers.  Access to information on competitive market trends.  For buyers, the value proposition included;  Access to network of suppliers offerings.  Access to feedback and rating of suppliers.  Ease of evaluation and transactions.  VI. THE COMPETITION The Competition IndiaMART’s biggest and nearest competitor was Alibaba.com a China-based e-commerce company, founded by Jack Ma a former English teacher and 18 others in 1999. Other competitors included Justdial, TradeIndia, globalsources.com, thomasnet.com among many others. Although all of them offered lead generation and were matchmaking platforms bringing buyers and sellers together, each of them had a different focus. IndiaMART for instance, focused on its suppliers’ directory, whereas Alibaba focused on products, TradeIndia on print media and Justdial on telephone services. Though these online trading companies served the SME market to a certain extent, they were present across markets, and sometimes even overlapped in their listings. According to a report by the Federation of Indian Export Organizations (FIEO), exports through the e-commerce route had grown over 400 % to $1.4 billion from 2010 to 20128. According to Forrester Research Inc., a market research firm, e-commerce sales in 2013 were estimated at about $1.6 billion9. However, exports declined 1.76% to $300.6 billion in 2012- 201310. According to Ernst & Young, India's B2B market in 2011 stood at just US$50.37 million, a fraction of a small but rapidly growing domestic e-commerce market of US$10 billion11. As various models evolved and coexisted, the B2B opportunity in India began to attract attention from many players. Alibaba Group: The Alibaba Group, China's leading B2B e- commerce Company, was started to cater to small businesses. The Group’s major businesses included Taobao Marketplace - an online shopping site, Tmall.com a platform for online shopping for top-quality international and Chinese branded merchandise, Juhuasuan - a buying platform, 1688 - a wholesale marketplace for domestic China trade among small businesses, AliExpress - an e-marketplace for global consumers, Alibaba.com - a global wholesale platform for small businesses, Alibaba Cloud Computing for developing platforms for cloud computing and data management and Alipay to facilitate online and mobile payment solutions in China. Alibaba went public with its maiden IPO in 2007 at a valuation of US$10 Biliion, which grew past US$ 17 Billion within no time. Immediately after its IPO, Alibaba opened offices in India and started marketing its services to Indian Exporters. Later, they partnered with Mumbai-based yellow pages services company, Infomedia India. In India, Alibaba.com drove various local initiatives, for instance, workshops were conducted to train supplier members on how best to leverage e-commerce and how to make the most of their account. Alibaba.com had local offices in Mumbai, Delhi, Chennai, Bangalore and Ahmedabad. Comparing the Indian market with its major competitors, Khalid Isar, the Country General Manager of Alibaba.com India, said, “India is a unique market as the characteristics of Indian SMEs are very different to Chinese counterparts. For instance, what may work well for a supplier in India, with local buyers, may not work with a buyer in China, as cultural, technological and socioeconomic factors have an impact on local businesses. Indian businesses on the Alibaba.com platform also differ from other markets as they have a language advantage. This allows them to respond to inquiries in a timely and efficient manner while reducing language- barrier issues12.” Alibaba.com’s unaudited financial profits for March end 2012 were USD53.8 million, with a total of 79.8 million registered users, 10.3 million storefronts and 753,955 paying members13. Justdial: A search service provider with a database of listings across categories was founded by VSS Mani. The company started offering local search services in 1996 under the Justdial brand, and became a dotcom company in 2007. It was the first mover in this space in India. In 2013, Justdial had a database of approximately 9.1 million listings, of which 2.39 lakh listings were paid campaigns. It addressed 364 million search requests across multiple platforms, such as the internet, mobile Internet, over the telephone (voice) and text (SMS), with 68% of the search requests from the internet. The business model was to offer a dial-in number which was an operator assisted, hot line accessible, 24/7 with multi lingual support. Business owners had the option of listing their business on the database for free and if they wanted priority in listing or prominence, Justdial charged a fee. Justdial was listed on the Bombay stock exchange in 2013. In the first quarter of 2014, Justdial’s revenues grew 28.3 % over the same period in 2012-13 to around Rs.271 crore, while its net profit rose 82.2 % to Rs.57
  • 4. crore. The organization had a market capitalization of Rs.12,430 crores and ranked 99th in the 100 most valuable companies in India in 201414. In the same year, Justdial initiated a ‘Search Plus’ Service for users, in order to transition from being a provider of local search and related information to being an enabler of such transactions. Justdial had its registered and corporate offices based in Mumbai, with branches in Ahmedabad, Bengaluru, Chandigarh, Chennai, Coimbatore, Delhi, Hyderabad, Jaipur, Kolkata and Pune. Tradeindia.com: Tradeindia, headquartered in New Delhi, with pan India operations was maintained and promoted by Infocom Network Ltd, and conceptualized in 1996. The business model was to take the offline yellow pages model online. Tradeindia received an average of 20.5 million hits per month. In 2013, the platform had a database of 27,44,394 registered users15. Tradeindia’s revenues were earned from listings which ran into several lakhs with charges ranging from Rs.3,000-13,000 annually. Global Sources Ltd.: It was a Hong-Kong based business-to- business media company that provided information and integrated marketing services, with a particular focus on the Greater China market. The Company, together with its subsidiaries, provides services that allowed global buyers to identify suppliers and products, and enabled suppliers to market their products to a number of buyers. It operated in three segments: online and other media services, exhibitions and other segments. Thomasnet.com: It was an information and technology company that connected manufacturing and industrial buyers and sellers. The platform had a news section which covered product news, information, business trends and analysis Some platforms also catered to niche products or services, like, for instance, the e-commerce Kolkata-based Mjunction Services, which ran Metaljunction, the world's largest online marketplace for steel and allied products. The MetalJunction portal, the largest e-marketplace for steel in the world, was a 50:50 online steel sales and procurement joint venture between SAIL and Tata Steel, and followed a transaction-led model. It had sold over 4 million tonnes of steel for its clients at an average rate of 150,000 tonnes per month. Its over 5,400 strong buyer community comprised of traders, fabricators, re- rollers and end-users. VII. DOMESTIC FOCUS AND RAPID GROWTH (2007-2010) 2007-10 was an interesting phase in the evolution of Internet- based businesses in India, as well as IndiaMART’s growth strategy. Indian currency had appreciated significantly against US$ and reached to Rs.38 for 1 US$, severely impacting the export from India. This was followed by the global financial meltdown in 2008 – arguably the worst economic crisis since the Great depression of the 1930s. India was no exception, and the rules of the game changed dramatically. A customer base of over 10,000 posed a fresh set of problems for IndiaMART. High dependence on low skilled manpower led of increasing number of errors in customer catalogues, resulting in an increase in customer churn; while higher inflation was pushing the costs up. The meltdown took Dinesh back to the era of 2001, albeit with one difference – now, there was money in the bank, and a competent team in place to execute. Dinesh got down to doing what he did best – re-engineering processes to improve efficiencies and protect its operating margins. IndiaMART decided to increase the subscription price and also launched the scheme, wherein customers could pay for two years and get the subscription for the third year absolutely free of cost. Three year lock-in helped in reducing customer churn. Premium listing was also contributing in improving the ARPU. To reduce human errors, template based mini-dynamic catalogue was launched. It replaced the custom made microsite, and the subscription price was increased from Rs. 9000. to Rs. 15000. From a customer’s perspective also, it was a good move, as the single page microsite was upgraded to a 5-page dynamic catalogue with many features. Templates led to elimination of errors and reduced dependence on low skilled design team – there was a significant increase in the quality of catalogues. All these changes gave a great boost to the overall sales performance of the company. During the same period, search engines, Google in particular, realized that people searching through the Internet preferred to see local results and therefore, modified it and made it locally relevant. This implied that search results would prioritize links to pages that were in the same geography as the user. For IndiaMART, it meant that their appearance in the international search results (made by prospective buyers) would be lower than before. For instance, if one searched for “pencil suppliers” from a PC in Mountain View, CA, the top ranked results would include suppliers from that geography, rather than a global listing of suppliers (including the IndiaMART writing instruments category page). This shift by Google to provide locally relevant search helped IndiaMART garner a huge share of domestic B2B (business-to-business) trade. Two developments took place at IndiaMART. With the rapidly increasing domestic adoption, IndiaMART started to shift its focus from international business to domestic business. The shift meant that another round of product innovation was required. Dinesh instructed his team to step out and meet customers to gauge their reaction to the slump in
  • 5. export business. As anticipated, the feedback was clear that the exporters who were earlier averse to domestic orders had started catering to local clientele, despite the drop in margins. There was a huge business opportunity amidst this crisis – domestic focus meant rapid growth in the market size; possibility of building an online business community in a highly fragmented domestic B2B marketing segment started to look much more appealing than the international business. Dinesh & Brijesh decided to raise capital and invest in products with an aim to establish its leadership position in the domestic market. IndiaMART raised US $10 Million from Intel Capital in 2008. While the revised business strategy was getting formulated, IndiaMART had already started re-modelling the online directory behind the scenes. In fact, the process was initiated long time back – to transform IndiaMART.com from a company directory into a giant product catalogue. Until then, IndiaMART offered only a two-liner business description to Free Listed companies, and its product catalogue was derived from its paying customers. Dinesh decided to offer a full-featured business catalogue to all free listed companies as well– and suddenly the product catalogue started to grow in leaps and bounds. The sales team evaluated on a regular basis if clients benefitted from the domestic focus. The move helped IndiaMART in retaining its preferred positioning in Google, as even with its changed algorithm, Google continued to find high quality content to show to its users. Google’s locally relevant searches helped IndiaMART garner a huge share of domestic B2B (business-to-business) trade. Investments made by BCCL in 2006 and Intel Capital in 2008, significantly aided the growth intent. Following these investments, IndiaMART built a professional board filled with independent directors, including well-respected business leaders like Sarayu Srinivasan (Intel Capital), Nachiket Mor (ICICI), Deep Kalra (MakeMyTrip.com), and PN Vijay (Investment Advisory). This reconstituted board helped IndiaMART significantly in disciplined financial reporting. Increased internet awareness and its usage as a marketing tool implied that many SMEs were using IndiaMART as their chief source of buy leads. More and more SMEs who used free listings as a trial converted into paid subscribers on the IndiaMART platform, resulting in IndiaMART achieving around US$ 750 ARPU in 2009. By 2010, IndiaMART had 14,000 Paying subscribers and had achieved its ARPU target of US$1000 per paying customer. The annual cash collection topped Rs.61 Crore. This was achieved partly by increasing the subscription pricing, and partly from premium listing solutions. Dinesh presented an aggressive plan to its Board, a plan which was based on rapid customer acquisition. It was an audacious move, after staying profitable for 12 consecutive years, IndiaMART was now prepared to tread the path of high cash burn. The revised aim was to grow to 1 million listed businesses and 100,000 paying customers. By 2010, after strongly trying to gain market-share for two years, Alibaba, IndiaMART’s closest and biggest competitor, had started to reduce its focus from the Indian market. It was clear that it aimed at only those companies which were focusing on Exports from India – apparently it did not show any intent of serving India’s domestic B2B Businesses. IndiaMART’s “Do-it-for-me” approach, as against “Do-it- Yourselves” approach of Alibaba, coupled with the large differences in Internet adoption within Indian SMEs and Chinese SMEs, turned out to be the biggest roadblocks in Alibaba’s path. VIII.RAMPANT CUSTOMER ACQUISITION (2010-2012) By 2010, the internet penetration and usage landscape in India had changed significantly. MakeMyTrip, one of the leading online travel agencies, had created history by listing on Nasdaq with a bumper IPO. There was a renewed faith of investors in online businesses. Several online ventures had received initial round of funding, and had also started advertising heavily in the traditional media to create awareness about their businesses. IndiaMART embarked on an ambitious customer acquisition target of 100,000 SME subscribers. Sales closures were monitored by the week (as opposed to by the month, as was the norm until 2008). Further, in order to accelerate their customer acquisition efforts, IndiaMART opened offices at the rate of one per week – at times, several within the same city. In just the year 2010, IndiaMART opened 52 offices in 52 weeks – the idea was to ensure that a sales person officers (commonly referred to as “Feet on the Street”) should not travel more than 30 minutes to meet a customer. Attractive incentive plans were offered to motivate the sales team to go out and bring in more customers. With burgeoning number of sales officers, IndiaMART acquired about 21,000 new customers in 2010, and another 28,000 customers in 2011. The size of the domestic business went up to 80% of IndiaMART’s volumes due to these rampant customer acquisitions. Within a span of two years, the rate of customer acquisition had climbed to 2500 customers a month, from around 400 customers a month. IndiaMART had spent Rs.40 Crore in a year in branding and customer acquisition process. During this period, IndiaMART also re-located its corporate office to a larger and far-superior facility on NoidaGreater Noida Expressway.
  • 6. The growth in customer acquisition, however, brought with it a variety of problems. It exposed chinks in the organizational processes that were designed to support a lower growth, resulting in the acquisition of non-relevant customers – essentially the ones who could not have benefited from the IndiaMART platform. Fig.5: IndiaMART’s customer acquisition process IX. CONCLUSION OF THE BUSINESS MODEL The company followed a Freemium (free + premium) business model, where it offered certain services for free to the MSMEs and charged for the registration fee for the premium services. This approach helped to build awareness and acceptance among the MSMEs, especially those who are not willing to avail the fee based services without seeing the results. The free registration on IndiaMART enabled the MSMEs to get an online presence and access to global market. Once the MSME felt happy and found value in having presence with India mart, they had the option of upgrading themselves for a paid membership, which entitled them an access to premium services like web catalogues, priority listing and trusted seal rating. The company also introduce pay per lead model to the MSMEs which provided the facility of choosing relevant business lead at India mart website with nominal amount and continuing the same. The platform will also avail support services including logistics, insurance buyer verification and sampling services online to participating members through a tie-up with global verification giant SGS (Société Générale de Surveillance, Geneva) to help build trust in online trade. India MART is already talking to ICICI and Citibank for provision of online payment gateway services for B2B transactions through the portal. Fig.6: Freemium Model A conservative estimate by the company reveals B2B transactions worth Rs 1,200 crores through the portal in the current year, resulting from estimated 3000 online auction deals. In addition, IndiaMART is confident of achieving at least 2,500 online0 catalogues of member businesses on the portal by the end of the year, making IndiaMART.com the largest Indian B2B portal, not far behind those largest in the world. IndiaMART.com offers products that enable small & medium size businesses generate business leads (online catalogs/store-fronts), establish their credibility (third party verified trust profile) and use business information (finance, news, trade shows, tenders) for their business promotion. REFERENCES [1] http://www.authorstream.com/Presentation/Triggr-1084248- IndiaMART-case-study/ [2] http://www.digitalbusinessmodelguru.com/2013/03/how-to-analyze- business-model.html [3] http://www.slideshare.net/nayananayana355/ecommerce- assignment?qid=a19a93b6-6ecb-463b-8a17- a9643efb307c&v=&b=&from_search=15 [4] https://www.quora.com/Whats-the-best-way-to-analyse-a-business- model-of-a-company