mSupply: Simplifying Buying & Selling
TGC Prasad, Founder& CEO
The B2B e-commerce is very different when compared to B2C e-commerce. In B2C e-commerce,companies catalogue products, define pricing and payment terms. Consumers access the site, select the product,feel convinced about the pricing, carry out the transaction and pay online. However, in the B2B space, at times customers define the products, pricing is negotiated and payment terms are usually credit driven. This clearly indicates that the digital platforms have to be flexible to accommodate discovery of product, price, logistics and payment terms. mSupply understands the same and has redefined its model into two business verticals and is disrupting the supply chain on both the buy and sell side.
When it comes to the digital sales and distribution(DSD)business, mSupply.com through its digital platform enables SMEs and manufacturers to sell their products to wholesalers and large dealers. In turn, these dealers access demand on mSupply platform from retailers, customers and consumers and sell downstream. Also mSupply has tied up with NBFCs to facilitate credit for these dealers. “The digital sales and distribution business akin to global B2B Ecommerce models is a game changer. It is disrupting the supply chain with revenues doubling every quarter and with a 10x increment on the margins” says TGC Prasad, Founder & CEO.
In the Digital indirect purchase(DIP) business, mSupply offers enterprise technology platform(Purchase Request to Payment–PR2Pay),combined with a product &price discovery marketplace and fulfilment services. This has yielded significant results as large enterprises look for trust, transparency and convenience of doing business. Importantly,the enterprises generate demand on the platform for suppliers who are on the marketplace.
Singapore headquartered mSupply.com is one of the largest B2B e-commerce companies with predominant operations out of India. The company was founded in August 2015 and has so far raised US$13 Million of funding in two successive rounds from global investors viz., Artiman Ventures, a US-based(Palo Alto) Private Equity fund &IIML With the help of its technology platform, mSupply.com caters to 22,000 pin codes in the Indian sub-continent, has access to a 14,000 supplier network on the platform and has since inception worked with about 1800 small, medium and large customers. With Bangalore as its hub, it operates out of 8 office locations in India.
The founder conceptualised mSupply from a simple observation about the Construction, Infra, Interiors and Consumables supply chain. The domain is vast, addressing almost 25 percent of the country’s GDP, but there hardly is any technology disruption.
Organised manufacturers constitute about 20 percent of this segment, the rest are small and mid size manufacturers, producing great quality products. These mid size manufacturers are often sub-contractors to large brands and do not have their own marketing or distribution reach. Seeing this, Prasad thought it was best to partner with them and provide an opportunity to sell their products into the wholesaler/dealer segment, there by bringing world-class products with great pricing into the segment and disrupting the supply chain. Here was an opportunity to launch private labels. Importantly the thesis worked - to market and distribute using a tech platform thereby eliminating the need for mSupply to own a shop floor or a wholesale shop. The numbers started to spiral upwards.
The same dealers who bought from mSupply could be suppliers on the marketplace. mSupply tied up with them on other categories and helped them supply materials to large enterprise customers, where good pricing and assured payment was a given. “This led us to managing indirect material purchase for corporates. To our sheer delight, we stumbled upon a problem that that we could solve for corporate customers, where the cost of procuring material is more than the cost of the material itself. We offered PR2PAY(Purchase Request to Payment) technology platform, we opened the market place for corporates, managed fulfilment, enhanced transparency of quotes,
It wasn’t easy put together a successful business model in place. The team went through its own challenges. It dealt with many failures and difficult times where growth, margins, securing money, pleasing customers and suppliers was a tall order. But our people stuck on, especially the core team. That made a big difference.“Luckily our series A investors, especially Ramesh Radhakrishnan of Artiman Ventures, who believed in us, the segment and the evolving business model, stood by us. He literally waded rough waters alongside us. Not that a start-up is out of woods in the first few years since inception; but soon we could pick ourselves up, persevered and got going. I remember vividly, when a potential investor asked, 'what is your biggest strength?' We summed in one word,'Adaptability'. I think the one thing a start-up needs to have in its DNA isPerseverance and Adaptability,” Prasad asserts.
" Singapore headquartered mSupply.com is one of the largest B2B e-commerce companies with predominant operations out of India"
An Array of Services
In the digital sales and distribution business, many small and medium sized manufacturers have tied-up with mSupply exclusively, to market and distribute their products to the 14K dealers/whole salers who are on the platform. For instance, Flyomix is a graded silica product that has been introduced on to the platform a few months back and the SME has seen a 10x growth.“We introduced private label Tiles with brand name 'Zen'. Our premise is Design. We think that no other tile company can offer the designs we can because we bring digital technologies. We backwards integrate Italian design with manufacturers and bring the best possible texture,colour and designs to consumers,”says Prasad. The company has recently tied-up with a plywood manufacturer and within the first month of its launch, the sales are soared. That is what digital platforms with terrific marketing and distribution reach can do.
Other than this,the company has created immense demand for the wholesalers to sell the products they buy from mSupply, downstream to retailers, consumers and customers. In addition to demand, mSupply has partnered with a few NBFCs to help wholesalers secure transactional short term credit. Besides mSupply also help with logistics and fulfilment.
In the digital indirect space, mSupply has tied up with several MNCs to become their platform driven lead supplier for procurement of their indirect material. The platform helps consolidate POs, Invoices and importantly manages the GST reconciliation.“This is possible because we have the PR2Pay technology combined with a discovery marketplace and logistics services. That is a whole new ball game, a model which is extremely hard to replicate. It gets embedded in the customer's ecosystem,” he avers.
The Road to Success
With its Indian subsidiary headquartered in Bangalore, 8 offices in the country and close to 100 people, mSupply covers 22,000 pin-codes across the country with its logistics chain. The company has access to 14,000 dealers and suppliers, who buy and sell and 2000 customers on the platform who are on to demand generation. Prasad confidently says, “Our focus is growing top line and margins as well. With higher take-rates, we expect to be cash positive by mid next year. Our vision in the next five years is to achieve a billion-dollar transaction value and it is very much possible”
Every customer, supplier, partner, NBFC has been a great source of learning and inspiration. And mSupply has all through been supported by its investors and mentors–especially RameshRadhakrishnan& Yatin Mundkur of Artiman Ventures, Rajesh Adhikary and Mark Silgardo of IIML. Going forward, mSupply wishes to expand and execute to manage the hockey stick growth.
On the digital sales and distribution, the team wants to add more products, generate online demand, deploy more credit in the market, reach more customers an,expand to more locations in India. mSupply intends to penetrate deeper into the small-medium manufacturer and the dealer, retailer segment by focusing on creating strong online brands.
In the indirect purchases space, besides deploying technology-customer acquisition, sourcing and logistics is critical for growth and is the core focus area of the company.
In both these business units, we
" With its Indian subsidiary headquartered in Bangalore,8 offices in the country and close to 100 people, mSupply covers 22,000 pin-codes across the country with its logistics chain"
mSupply's Business Verticals
Buy Side- Digital Sales & Distribution(DSD)– mSupply engages on an exclusive basis with SMEs; Local/Regional/Global Manufacturers who do not have marketing and distribution reach; and sells their products to wholesalers /dealers. Typical categories include – Construction, Industrial Products & Materials, Interiors, Plumbing, Electrical, Mechanical, Infrastructure etc. Secondly, mSupply has signed an MOU with Government of Andhra Pradesh (India) for setting up a material-park for SMEs/Manufacturers to display, stock, sample, manage logistics. Thirdly mSupply has a national agreement with NSIC(National Small-scale Industries Corporation), US$5B Public sector undertaking, to supply materials for their aggregated demand from SMEs. Lastly, Wholesalers /Retailers use the digital platform for buying quality products at better margins; have access to organized credit and get demand from potential customers. Alibaba, Amazon and Rakuten are global models in this business.
Sell Side - Digital Indirect Purchase(DIP)– As marketplace and digital platform driven lead supplier; mSupply engages with large Manufacturing/FMCG/Process companies & other Institutions for managing purchase of indirect material/tail spend/office supplies; by buying from the wholesalers /dealers. Typical Categories Include-Office Supplies, IT Peripherals, MRO & Consumables, Electrical, Mechanical, Interiors and Construction related products & materials. Corporates and Institutions get the advantage of managing their entire tail spend /indirect purchases on the digital platform. They get to aggregates suppliers, POs, Invoices, GST. Besides there is optimization of logistics and cost reduction. Wholesalers/Retailers get access to the demand platform to sell their products to hundreds of corporates across the country. Amazon,Office Supplies, Ariba, Coupa are some of the global models in this business.
TGC Prasad,Founder& CEO
Prasad was the CEO and Board Member for Misys Software Solutions, a USD 4 billion software product company. He was part of the initial start-up team of Mindtree, a USD 900 million software services company. He specialises in B2B Ecommerce, Supply Chain Solutions (Retail& Enterprise). He is author of several management and fiction books with Penguin Random house. He has done his B.Tech(Civil), NIT Calicut, MBA, Tata Institute, Mumbai.
Role in mSupply
As the founder and CEO,the role is to pursue the right B2B Ecommerce business model, showing the direction, ensuring right talent is on board, rallying people, customer acquisition, branding, fund raising, investor relations and so and so forth. “As we are growing rapidly, now a days, I am spending a lot of time raising series C funding and meeting potential investors”. Prasad says.
Be committed to what you are doing, put endless hours of hard-work. Stay focused on the Customer. Strongly believes that technology is at the core of growth. Create non-hierarchical teams. Enable people to think and take decisions. Push for stretch. Recognise results. In tolerance for bad attitude and non-performance.
Message for the Readers
mSupply is growing rapidly and in the process of raising series-C funding.
• Digital Sales & Distribution helps SMEs/Manufacturers helps manufacturers market and distribute faster. Whole salers/dealers gain by accessing good quality products and materials at better margins and with access to credit and demand generation on the online platform.
• Digital Indirect Purchase helps corporates &enterprise customers streamline their indirect purchases/tail spends by using mSupply’s platform and marketplace driven lead supplier methodology. The leverage is PR2PAY platform, marketplace of 14,000 suppliers and logistics services to meet on-time fulfilment. On the supplier side, the same platform generates demand for the suppliers on the marketplace.