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Index
B2B E-Commerce – Potential 3
Primary Research on B2B platform value proposition – Buyer & Seller 5-6
Market Size by Category – Office Supplies, Healthcare, MRO & Construction 10-11
McKinsey framework 15
Technology Options 20
www.ascendum.com 2
B2B E-Commerce – Lot of potential to grow
$ 470B
$ 700 B
Indiamart $4,500M
Industrybuying $15M
$ 300 B
TradeIndia $10M
Others $50M
$ 4.7B
2015 2020
2017
www.ascendum.com 4
B2B Primary Research: Buyers interested in a new B2B platform, and group buying
Research Sample :
Targeted Cities Ahmedabad & Bengaluru
Wholesalers & Retailers across different industries i.e., Healthcare, Industrial Supplies, Office Supplies, Electrical & Electronics
Targeted Users supplies
Reached Approached 100 Buyers (Retailers/ SME)
Interviewed 29 Buyers
Buyer Analysis
Buyer Insights
• 55% of the buyers showed interest in B2B platform if offered
• Buyers are more interested in getting a better online B2B platform which
• 45% of the buyers find suppliers thru online portals like Indiamart or provide best convenience, service & better price benefit
Justdial and remaining buyers use their referral network to find buyers
(24% find through Indiamart & 76 % find through Justdial) • Finding & Reaching right suppliers is a pain for all buyers when they want to
get quotes for their requirements
• 52% of the buyers are interested in Group buying
• Market Intelligence on Price is a pain area for buyers to get better price
• 20% of the buyers using WhatsApp as a source for finding suppliers &
products - They are part of few WhatsApp Group advantage
• 10% of the buyers provide feedback to the suppliers via Phone/ Email • Buyers are more interested in Group buying in order to get best price in the
Market
• 55% of the buyers prefer online payment or Cheque mode for supplier
payment • WhatsApp is being used strongly in the Market to find & communicate with
suppliers
• 75% of the buyers prefer logistics by the supplier own logistic mode
rather than third party logistics • Buyers expect best convenience & service when it comes to timely delivery
of goods & handling returns
• 55% of the buyers expects replacement for defective/ damaged goods
rather than refund or Credit Note • Payment Guarantee & flexible payment terms are expected by the buyers
www.ascendum.com 5
B2B Primary Research: Sellers interested in a new platform, selling to group, and
use Whatsapp
Research Sample :
• 40% of the Sellers request reviews from their buyers, their preferred • Sellers don't have a mechanism to capture review/ rating about their
channel to collect reviews are Phone & WhatsApp – but the conversion is service or Product
less than 10%
• Sellers don't get insights or support to forecast demand
• 45% of the Sellers have online Catalogue created by their own and Portal
(15% Catalog is created by Portal & 85% are created by their Own) • Sellers have received false leads from portals & classifies like Indiamart &
Justdial and leads received via Indiamart or any other online B2B portals
are less convertible
www.ascendum.com 6
Category Selection Framework
B2B market categories and subcategories were evaluated after research and interviews with experts in industry.
The entry of a B2B marketplace in a specific business category is driven by market entry forces.
Payers
www.ascendum.com 7
Category Selection Framework( To be further validated with
market research)
Office Supplies to be most attractive followed by Healthcare Supplies & construction
Office Supplies Construction Material Healthcare Supplies MRO
www.ascendum.com 8
Market Size: By Category based on secondary data.
Market research Organization to be finalized post discussion
Office Supplies Construction
$5,000 $1,000
$474 $3,000
$4,000
Office Products
Ceramic Tiles
$2,060 Housekeeping Bathroom Fittings
Products Air Conditioning
Office Furniture Kitchen
$53,500
$5,450 Others
Office Equipment
$316
Healthcare Supplies
www.ascendum.com 10
MRO (WIP)
$20.0B
Global Leaders of MRO in India Revenue/Findings
Sonepar $22.4m(Annual Report)
Rexel India $80m(Vikas Garg, Rexel India)
Grainger Annual Reports WURTH own b2b ecommerce site
bulkMRO Major Indian Player
www.ascendum.com 11
Office Supplies: Primary Buyer Research: Convenience, Service and
Price are important that current online platforms don’t provide COMPANY Annual
spend(lacs)
VIS *** 2.4
Calls were done with 14 companies from different verticals across India for office supplies of total Delta Mobility 3.0
purchases worth Rs.9.58 Crs annually. We spoke to both buyers and decision makers.
MSBC 2.3
• They have not been approached for online marketplace thus first mover advantage Cfirst 2.4
• Buyers are willing to move to Online if conveniences are met IANT-110 offices*** 840.0
Cignis Datamatics 2.88
• Convenience and Service is equally important as Price: Lower price is a value for customers only if
convenience, safety and negotiating parameters are met. Satmetrix 2.64
Satmetrix 1.8
• They buy all their supplies from single vendor for convenience and service. Same day or next day delivery
with 30-90 days credit period. Cleartrip*** 24.0
Zebra Tech 9.6
• Transparency: Decision makers value transparent prices without any possibility of commissions and genuine
products. Three of them buy from Metro cash and carry even if it is inconvenient Infiniti h*** 3.6
Brillio 6.0
• Prices are not real time: Buyers get prices for one year and they don’t recheck real time prices even after a
year C-Metrics 4.2
Aegis (24 48.0
• Competitors like Amazon and Industry buying will not be able to match the convenience and service Offices)***
required by buyer of office supplies. More details are on next slide.
Ascendum 3.6
• Low risk for frauds & better buyer credibility
Ascendum KPS 1.2
Sourcebits 3.0
www.ascendum.com 12
Companies can save minimum 25% of their office spends by using
platform as they are not getting the lowest price
On comparing office purchases by three companies, it was found that they are paying 25-53% more as compared
to Ascendum on 11 common products. If we compare all products, it would be minimum 20% savings.
S.No Product Name Variant ASC BLR Cleartrip QTY Amount Savings % Savings IPL QTY Amount Savings % Savings SourceBits QTY Amount Savings % Savings
Colin Cleaning 500ml 79 99 6 591 143 24% 105 7 735 237 32% 87 10 870 84 10%
1 Liquid
2 Duracell Battery AA 40 45 12 538 69 13% 45 12 538 69 13% 42 144 6,083 392 6%
3 Duracell Battery AAA 40 0 0 41 10 413 17 4% 0 0
Harpic Cleaning Liquid 76 97 20 1,946 561 29% 92 7 645 142 22% 89 18 1,593 274 17%
4 Liquid
75
151 196 12 2,352 697 30% 34 0 0 196 5 980 290 30%
5 JK Copier Paper GSM
Vim Dishwash 500ml 114 136 4 543 104 19% 186 5 928 584 63%
11 Liquid
Total 13,649 3,368 6,669 2,215 20,986 11,022
Savings % 25% 33% 53%
www.ascendum.com 13
Offline vs. Amazon B2B & Industrybuying: An opportunity to supply basket of
products from single Vendor with huge savings
Analyzed 3 months purchase (Monthly Basket – Monthly Purchase) data of 7 companies – Ascendum, KPS, Sourcebits,
Cfirst, Satmetrix, Cleartrip & Institute of Product Leadership.
Analysis
● 90 different types of office supplies are being consumed by 7 companies
● 70% to 85% spend is on top (30 out of 90) common products across 7 companies and all products are available from single supplier
● 60% to 75% of total office supplies spend is on Cleaning Supplies.
● 100% of the buyers prefer buying all their office supplies from a single vendor for better convenience and service
● Only 25 % of these products are available on Amazon B2B currently and 35% of the basket items are currently cheaper on Amazon B2B
● 25 % of these products are not available with Industry buying and 56% of non available products are top consumed products (Eg: Cleaning liquid, Paper
products et). Industry buying has MOQ restrictions, making it inconvenient to buyers
Insights
● Buyers can create a basket of products (recurring purchase items) and make it as a monthly purchase list
● Suppliers have agreed to offer additional discount up to10 % to the buyers if we commit the basket of 50+ companies
● Buyers don’t have transparency in the pricing and they are being charged more by the vendors
● None of the online portals satisfy the buyer requirements or provide better convenience
● It is convenient to buy all products from one vendor as it helps in billing, ordering and faster delivery.
● Monthly Basket Order model fulfills the buyer requirements & adds value to their monthly office supplies purchase.
www.ascendum.com 14
Office Supplies GMV projection at 5.4 mn USD – SME’s across 4 Cities
Opportunity
Cities # of Companies
Ahmedabad 2440
Bengaluru 4660
Mumbai 9230
Delhi 11665
Total 27995
Projections
www.ascendum.com 15
Office Services (Security Guards) - Per Office Revenue can be 4x i.e. Rs. 10
lacs per office if we add manpower service like security guards to platform
• These requirements are commoditized based on skills of the service needed and the salary offered to the guards.
This makes it easier for a facilities manager(buyer) to order these services easily online.
• Ascendum office services (security & housekeeping) spend is 2.3lakhs which is 6x of office products spend
• They operate in a very segmented and organized market which is almost fair and open. This should make it easier for
us to aggregate security requirements from different smaller firms and present as one big contract to Perigrine.
• They will not accept very small contracts for a company which is less than 5 guards or less than 1 lac volume of
transaction. Hence aligns with our idea of group buying.
• They have found it harder to break-in to a new geographical location such as Mysore. If we can aggregate the
security requirements for smaller vendors in Mysore and create a group buy offer, this will be enticing for a supplier
like Perigrine.
Perigrine-Security services is willing to reduce their margin to 5% from 10% if we can group buyers for them.
www.ascendum.com 16
McKinsey Framework
Value Add for Buyers
Goal
Factors Weightage AMZN IndiaMart Industry Buying Pwer2SME AliBaba Open Commerce
Service 35% 2 1 2 2 2 4
Convenience 25% 2 3 2 2 2 4
Price 15% 3 1 3 3 4 4
Safety 20% 5 1 3 3 5 4
Special Deals 5% 4 1 4 4 1 4
Goal
Factors Weightage AMZN IndiaMart Industry Buying Pwer2SME AliBaba Open Commerce
Reach 25% 3 5 2 2 3 3
Conversion 25% 2 3 2 2 1 4
Margin 25% 1 4 3 3 4 4
Safety 10% 5 1 4 4 4 4
DSO 10% 3 4 2 2 2 2
Special Opportunity 5% 3 1 4 3 2 4
• Lowest price in the • Choice of Products & • Verified Suppliers • Faster dispatch & • Special deals are not
Market Suppliers • Safe Delivery of Delivery of goods provided by Sellers.
• Bulk Purchase • Product Comparison goods • Text/ Video Chat with
Discount • 24/7 Online Ordering Suppliers
• Basket Purchase • Real time order & • Buyer Support
• Dynamic Pricing shipment tracking • Dispute Management
• Automated Monthly • Basket buying
Ordering • Credit period through
• Transparency in suppliers
transactions to
eliminate malpractices
www.ascendum.com 19
Value Proposition for Suppliers: Easy and More
business with higher margins
Reach Conversion Margin Safety DSO Special Deals
• Visibility of • Reach qualified • Pay low • Assured payments • Shorter • Special deals are
Products buyers commission from buyers Remittance cycle not provided by
• Find buyers from • Basket Sales • Joint Promotions • Safe delivery of • Cash Sales or Sellers.
different cities • Repeat Purchases • Inventory cost Goods dispatched Cash on Delivery
www.ascendum.com 20
Dynamic Pricing – Can be our UVP
Source: https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/5122/B2B_relationships.pdf
www.ascendum.com 21
Technology Options
EXTENDING AQUIIRE MAGENTO NEW MICRO SERVICES PLATFORM
Cost: ~22 Lakhs (MVP Only) Cost: ~10 Lakhs (MVP Only) Cost: ~45 Lakhs (MVP Only)
Go Live: 5th Mar 2018 Go Live: 31st Jan 2018 Go Live: 14th May 2018
www.ascendum.com 22
Healthcare Supplies – Initial Thoughts (WIP)
Reached 19 suppliers via Phone and received clear response from 2 suppliers, others have asked for a face to face
discussion.
www.ascendum.com 23