SMEs who would earlier procure raw material from various sources and stock it for one month to three months, are now opting for B2B e-commerce players like Tradohub and IndiaMart which are offering inventory on behalf of SMEs, thereby reducing the former’s inventory costs by over 40 per cent. According to SMEs, this has reduced their stock maintenance cost drastically and also supplying has become easy.
“Because of technology, new kind of traders have emerged in past few years which known as SME marketers. They have strong domain knowledge. SMEs are now not creating inventory as ‘just in time’ sourcing has increased in India“, said Dinesh Agarwal, Founder and Chief Executive Officer of IndiaMART.com.
Moreover, B2B platforms are providing multiple choices to the SMEs to source their requirement from across India and across the globe.
Agarwal said, “SMEs can get local catchment in offline procurement while in online, B2B are offering multiple choice for SMEs to source any materials from online. It connects them with the world where SMEs gets best of their requirements.“
According to B2B companies, as the availability of information is easy, many SMEs who stock raw material for a month or three months are now storing their required goods for a week only. Moreover, online procurement is also quite cheaper than offline.
Anil Gupta, Executive Director of Delhi based Allied Strips Limited said, “Two years back we had stored raw materials for a month which cost us something about Rs 16 crore but after sourcing materials online, we have stopped to create inventory as we get it any time. Supply becomes easy so we need not to stock it.“
The way ‘just in time’ sourcing trend is increasing, B2B platforms are also providing working capital fund and marketing support to the SMEs. B2B ecommerce players, by offering various services are trying to tap more and more SMEs from across India.
Akash Domadiya, Founder Chairman of tradohub.com said, “We have observed that by sourcing industrial raw material from B2B platforms, inventory related costs of SMEs have reduced by 60 per cent.“
SME companies also now comfortable with the new channel of sourcing and it has helped them to manage their cash deployment and reduction in production costs.
Siddhartha Agrawal, Managing Director of Surat based Hutch India Private Limited said, “B2B provides raw materials on credit which helps us manage our cash deployment better. Also The production cost has been reduced due to better pricing of raw material that we buy online.“
Source: Business Standard