The pandemic has forced upon us new ways of doing things, modifying existing practices and transforming entire ecosystems, and that too for a considerable length of time.
Brief us about your company, its business model and operations?
Dhatu Online is a process-driven and market-centric B2B e-marketplace designed to simplify the buying and selling of industrial raw materials and consumables for Micro, Small & Medium Enterprises in India. It brings together customers, suppliers, financiers, logistics and quality assurance in one platform to interlink their trading needs. With real insights into the current market trends and robust B2B trade features, Dhatu online brings to its users the power of technology to scale and grow their business. We have been closely observing SMEs in the component manufacturing sector and understood their challenges as buyers or sellers. We noticed that micro and small industries are facing many challenges such as tedious supply chain management, lack of awareness about quality raw material suppliers, using intermediaries resulting in high cost of raw materials, inaccessibility of financial options due to lack of knowledge, fluctuating raw material price and unsatisfactory services by sellers. There was an urgent need to improve the traditional raw material market. So, we conceptualized a platform where SMEs can do business regardless of their size, age of the company and other attributes platform where we connect every buyer and seller with access to a top-class market of raw materials and consumables. Having all these factors in mind, we created Dhatu Online.
Our business model includes an aggregator platform in the B2B space for industrial goods where buyers can purchase from a catalogue of more than 5 lakh products offered by more than 2000 sellers. Here, buyers generate RFQ, and suppliers can quote the best price with equal opportunity for small and large businesses. After the completion of the requested RFQ time limit, our platform forwards the best price to the buyer. Once the buyer confirms the price and releases the purchase order, our quality assurance team visits the seller’s place to certify the quality of the product as requested by the buyer while placing the RFQ. After receipt of the inspection report and its acceptance, the buyer can choose the different secure payment methods. Once the payment is made, goods will get delivered by our logistic partners. Because of our robust technology, we assure seamless transactions with the least interaction between buyers and sellers.
What are the unique key points (USP) of your company?
We are removing intermediaries from industrial raw material and consumable segments by facilitating the best-in-class tech platform for buyers and sellers for a hassle-free transaction while guaranteeing the best-in-business raw materials, excellent logistical support and secure payments with the help of robust IT Infrastructure.
How are you different from the existing competitors?
We need to understand things from a B2B purchase perspective; while looking closely, you will find there is a void for an aggregator specifically dealing with metal and allied solutions to MSMEs. The buyer largely depends on conventional methods to identify the sellers, but there is no “true” aggregator platform. Recently a few players such as Moglix, Industry Buying, Power2SME, etc. have tried making in-roads into this system. However, they work on an e-commerce inventory model, which is different from the concept and services offered by Dhatu Online. Our platform is the only aggregator platform, which provides various options to the buyers where they can purchase quality products suiting their needs, and suppliers can benefit from a new customer base.
What is the monetization model?
We work as an aggregator. Our main revenue is through sales commissions, which we generate via the platform. Apart from this, we provide various value-added services such as logistics, supply-chain finance, Quality Assurance and other related services, which also generate revenue for us.
We provide our tech platform to various OEMs where they can use it among their vendors as per their custom requirement on a subscription model.
What challenges are you facing in running your business? What is the impact of the pandemic? How has your customer response been so far post-lockdown?
When you start an unconventional business model and you are trying to disrupt the market, you face a lot of challenges that you need to convert into opportunities. Some of the challenges we face include educating the user about online transactions method as most industrial raw material suppliers prefer to do business conventionally. Since they are running a family business, and the cost of the material is high, people believe in purchasing from known persons where they get personal attention. To change such a mindset among the users was the most challenging part during the initial phase of our launch.
The pandemic has forced upon us new ways of doing things, modifying existing practices and transforming entire ecosystems, and that too for a considerable length of time. From a business perspective, we have become more relevant during the pandemic as we are uniquely placed to fulfil the needs of our clients of the industry and provide them with a variety of suppliers.
Today, customers will shift to new ways of doing things if they are ‘more convenient, affordable and accessible. The shift to digital persists across countries and categories as consumers in most parts of the world keep low out-of-home engagement. Most of the categories have seen an average of over 30 per cent growth in online customer bases across countries. Today, buyers have to just provide the requirements at our platform, and they can be rest assured of getting the best pricing from approximately 50-60 sellers for each product, which is filtered automatically in the back-end with the best pricing amongst them. Our online RFQ process helps them to get the best quote within the timeline. We are transforming this sector with the help of deep tech. The pandemic is beneficial as users have got better awareness and acceptability towards digitalisation post-lockdown, which has provided an opportunity to connect our buyers and sellers digitally.
What are the traction details (achievements of the company?
We have over 5000 registered users, out of which 1000 are active users with more than 20 per cent repeat users. We have more than1.5 lakh SKUs on the platform, which is growing exponentially every week.
We have generated more than 3500 RFQs, out of which 40 per cent have got converted into orders.
The average order value in the B2B segment is higher than with B2C segments. As of date, our average order value is INR 20,000. If we see the monthly growth in an average order value, then it must reach INR 30000 within the next six months.
How do you look at expansion plans?
Currently, we are operating in Delhi-NCR, Mumbai-Pune region and Bengaluru. We are looking at exponential expansion plans in the next five years by starting operations in various cities. We are starting our operations in Hosur, Tumkuru, Satara and Sonipat. In 2022, we will start operations in Coimbatore, Ahmedabad, Hyderabad, Vishakhapatnam, Raipur, Kolkata, Chennai, Mysore, Belgaum, and Ludhiana. In 2023, we will start operations in Aurangabad, Nagpur, Jaipur, Jamshedpur, Ranchi, Nashik, Rajkot and Indore. In 2024, we will start operations in Ernakulam, Ambarnath, Surat , Vijayawada , Vadodara and in 2025, in Patna, Salem, Kharagpur, Kanpur, Kolhapur and Cochin.
In product categories, we are planning to add construction steel, aluminium, measuring instruments etc.
We also plan to launch an app-based platform by year-end and Logistics + finance channel partner app within two years.
What are your marketing plans?
We have a 30:70 ratio of ATL to BTL activities in our marketing calendar. Along with this, we are focusing on digital marketing as well. Right now, our main aim is to target organic channels of digital marketing, which include SEO, SEM and social media. We have created a very good organic ecosystem, which we will use for customer retention andnew customer acquisitions. We are planning to spend heavily on targeted campaigns with Google and Facebook and are tying up with various industry associations and clusters as well to encourage trust and feel-good factor among the user base. We are also activating new WhatsApp features to reach out among industrial association members. Since it’s a B2B space, which drives on trust and seamless processes, we are getting an excellent response from word-of-mouth marketing, too, as satisfied users have started falling into the advocacy phase.
What has been the biggest learning so far?
We are at a very nascent stage, and Dhatu Online has the unique first-mover advantage. We are continuously evolving and developing the tech from a tech perspective as per the buyers’ and sellers’ feedback. Our objective is to provide users with a seamless, hassle-free experience of buying and selling.
Also, it is a credit-driven industry, and we are currently working on a cash model for our buyers and sellers. We are in the process of tying up with various NBFCs and banks to help them grow without risk.
We have received a very encouraging response from our users (both buyers and sellers). So far, it has been a very positive experience, and we are generating more than 20 per cent of repeat sales from our active users.
What is the market size and opportunity?
We are working in the manufacturing sector worth INR 8 trillion Market, which comprises 1Mn+ MSMEs and 1000K+ traders. The industry is growing at a CAGR of 7.2 per cent and is poised to grow at a much faster rate seeing the growth of the Indian economy. We have an opportunity to achieve 8000 crore+ GMV if we capture one per cent of the market share. If we take achievers’ benefit into consideration, then we can easily capture around 1.5 per cent – 2 per cent of the market share, which results in 12000-15000 crore GMV.
What are your plans in the Indian market?
We are operating in a sector that has no real aggregator who understands the pain points of buyers and sellers. We want to be the first real aggregator platform in the B2B space for industrial goods where the consumers are assured of quality and suppliers can benefit from a new customer base. To achieve this, we are running a robust web-based tech platform and are going to launch an Android & iOS app by the end of 2021. We will also launch the logistics app by early 2022 and integrate supply chain finance by the end of 2022. We also have plans to launch omnichannel experience for our users later.
Source: Business World