Mumbai: Ansif Asharaf, a photographer from Kochi, logged on to the Internet to search for cheap photo printers and cartridges and stumbled upon Alibaba.com – a business-to-business (B2B) e-commerce website. That was a few years ago.
Soon, he was using the website to buy products from a Chinese company before graduating to become their commission-based agent.
Later, he diversified and entered the rubber and chemicals business. After some time,
Asharaf signed exclusive distribution contracts with some suppliers and formed joint ventures with others.
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He now imports and exports natural rubber from India, Sri Lanka, Vietnam, Thailand and Malaysia, and supplies rubber chemicals and additives to rubber manufacturers by leveraging tools for B2B e-commerce.
B2B e-commerce, which was written off by critics after the dotcom bust in 2000, is experiencing a resurgence, spearheaded by small and medium enterprises (SMEs).
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“There has been a significant increase in participation from the Indian SMEs on the e-commerce front, reflecting that SMEs have awakened to the fact that online trading holds big opportunity for them as far as global reach is concerned,” said Brian Wong, senior director, international business development and marketing, Alibaba.com.
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Alibaba.com, based in China, helps SMEs in India find suppliers and buyers both domestically and globally in the B2B marketplace. The company recently opened a channel in India partnering with local company – Infomedia to offer both online and offline products.
Wong said the number of SMEs opting for e-commerce is swelling at 100% a year in India, a growth that is unprecedented in any part of the world “wherever we have operations”.
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“In the last one year, our membership grew from 3,68,000 companies to 7,30,000 in India, a growth rate witnessed only in China when we had first launched the website,” he said.
Viresh Oberoi, managing director of Mjunction Services, one of India’s foremost B2B portals, said, “E-commerce is one of the best possible ways for SMEs to take on the big guys.”
It allows SMEs to expand their reach – whether in finding buyers or sourcing raw materials – and increases their vendor base while even offering them avenues to access capital. Mjunction has several portals through which players can buy and sell steel, coal or even auto-parts.
“We source coal from 8 major clients, but sell it to close to 6,000 companies, out of which 5,800 are from the small sector,” Oberoi said, adding that 95% of its revenue comes from the SME sector.
Rakesh Singh, a trader in agro-commodities, chemicals and garments, feels that e-commerce actually provides an organised approach to the unorganised and cluttered sector where the SMEs operate.
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“Since the time I opted for e-commerce, a boundless overseas marketplace opened up for me,” he said adding that 65% of his business comes from trading his commodities through e-commerce. “The awareness level in India, though growing rapidly, is still very less. There is a lot of apprehension among smaller companies as they cannot physically see the buyer or vendor,” said Singh.
However, these fears are completely unfounded because online trading actually helps the companies locate and reach the best buyer, the best price and offers third-party inspection to ensure authentication.
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A Nasscom report said advantages of B2B e-commerce include unlimited access to shelf space for buyers and sellers, as well as a 24-hour shopping environment. Portals offering e-commerce services charge around $500 for a year as membership fee. This, in turn, throws open the global market and various value-added services.
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