BuyHive was set up in 2019 by Minesh Pore, Michael Hung and Brent Barnes to address the growing demand of global buyers who want to source quality products without huge overheads
The company offers an ecommerce platform (theBuyHive.com) and a network of freelance procurement consultants
The startup aims to go for its first round of funding in a few months to expand its platform for sourcing professionals
Be it ready-to-wear collections, home décor/household items or even medical equipment (in some cases), Indian retailers often source a large chunk of these products from neighbouring countries and regions as well as other global markets due to superior product quality and cost-effectiveness.
Traditionally, both manufacturers and retailers depended on a vast network of experienced sourcing professionals. But when the Covid-19 pandemic struck in 2020, the businesses and the professionals they depended on suffered heavily as the latter could not physically travel to global manufacturing hubs for inspection and sourcing.
Although some companies shifted these operations entirely online (read B2B ecommerce), none was entirely satisfied. This was especially true for thousands of small retailers from India, who used to visit Southeast Asian markets for in-person evaluations. Would things be better if a trusted source in the foreign markets could do it on their behalf and take responsibility for post-sales complaints and concerns?
Interestingly, a team of professionals with decades of experience in global supply chain management realised this addressable gap even before the pandemic. So, Hong Kong-based BuyHive, a tech-enabled global platform for B2B sourcing, came up in 2019 with a bouquet of services to this effect.
BuyHive offers an ecommerce platform (theBuyHive.com) and a network of procurement experts who freelance for the startup to ensure convenient and reliable procurement for global buyers.
Two different service offerings are in place for this purpose.
As part of its ecommerce offering, BuyHive acts as a sourcing consultancy and helps global manufacturers and retailers identify and work with suitable suppliers worldwide based on sector-specific requirements. In short, BuyHive provides a managed B2B ecommerce service in this space.
But there is yet another and unique offering. According to cofounder Minesh Pore, many retailers went out of business over the past few years, especially during the pandemic, and their experienced procurement specialists became jobless. These professionals freelance on the platform and offer their services to smaller companies that cannot afford them full-time. The company has ambitious plans to grow its base of freelancers in India but more on that later.
Building A Global Sourcing Platform For Manufacturers And Retailers
BuyHive was set up by Minesh Pore, Michael Hung and Brent Barnes to tap into the growing demand of buyers worldwide. It looked like a sunrise segment much before the pandemic as businesses were looking for more efficient ways to procure quality products minus the large overheads of buying offices and expensive annual visits to sourcing fairs.
“There are domestic versions of Alibaba-like platforms in all markets. However, these do not necessarily help overseas buyers manage quality control or post-sales issues. But given the current scenario where everyone is working remotely, having that quality assurance from experienced procurement specialists can make the job a lot easier,” Pore told Inc42.
Pore and Barnes had previously worked for NASDAQ-listed and Hong Kong-based B2B trading media company Global Sources that created content related to global procurement solutions. (It was acquired by Blackstone in 2017.) Working there helped the duo understand the nitty-gritty of global sourcing challenges.
Hung comes from a family that owns the Headwind Group. The group designs and manufactures products for retail giants, including Target, Walmart, Polyconcept and Hit Promotional Products, among others.
“We could see a lot of new technologies in the B2B sourcing space and a large number of third-party marketplaces. But we also saw the need to connect people with expertise to handle these solutions. Many B2B marketplaces know their buyer markets very well but are lacking in sourcing capabilities. And remember, this is a global situation,” said Pore.
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BuyHive’s clients include sellers on B2C ecommerce platforms and B2B marketplaces besides major retailers in developed markets like the US, Europe and India. The company says it has more than 60,000 registered users and caters to customers in the US, the UK, the European Union, India, Greater China and Southeast Asia.
According to Pore, each client is placing orders worth $250K-$300K using the freelance consultancy services available on the platform. The data captured via these orders help the startup build a network of requirement-specific suppliers, further used to drive the company’s ecommerce platform.
During the Covid-19 pandemic, the platform has emerged as a global resource for procuring PPE kits and medical equipment, serving experienced buyers, B2B and B2C sellers and professionals doing high volume procurement for the first time. The startup worked with the Hemkunt Foundation team during the second Covid wave to meet the requirements for medical supplies.
“We have not shied away from going for the low-hanging fruit,” said Pore. “The products most in demand during the pandemic were medical supplies and PPE kits, and a large chunk of our global clients got in touch with us due to pandemic-induced emergency requirements.”
Sourcing As A Service For Global Clients
“In a trading marketplace, buyers usually search for sellers producing the goods they need. Then they contact those sellers, get quotes and manage the entire evaluation and quality control on their own. Here we offer a matchmaking service and recommend the best suppliers based on budget, product requirements and other metrics,” said Pore.
It charges 5% of the order value as a service fee for its ecommerce solutions and looks after the entire quality control and service management part. On the ecommerce side, the platform services orders worth $180-250K per client. In India, it works with third-party marketplaces like Moglix and Zilingo.
Among its global B2B clients are US-based retailer Sprouts Farmers Market, the University of Pittsburgh Medical Centre, the National Health Service (UK) and ecommerce sellers from the US, among others.
The company primarily competes with traditional global trading houses, which have complete control over the sourcing ecosystem globally. It claims to be profitable and has clocked a revenue of $18 Mn+ since it became operational in July 2020.
Building A Freelance Sourcing Network In India
BuyHive has recently rolled out its Expert-Assisted Sourcing Program (EASP) in India. This initiative helps global buyers connect directly with independent Indian professionals, specialising in various product categories. Pore likened it to global freelancing platform Upwork, but it is tailored for procurement and sourcing jobs.
These freelancers should have worked with local manufacturers and procured goods for international buyers for more than 10 years with a thorough knowledge of manufacturing processes and must be comfortable with local languages and business etiquette.
BuyHive’s EASP claims to be the first-of-its-kind programme that provides global buyers direct access to freelance sourcing experts from India. In Greater China, the company has more than 650 sourcing experts specialising in consumer goods industries, and 75% of them are based in Hong Kong.
Given India’s significance as a sourcing destination, BuyHive plans to recruit 5,000+ independent sourcing professionals here over the next 12 months. These recruits will cover a diverse set of categories, including apparel and textile, home décor, handicrafts, metalware, garden and outdoor furnishing, electronics, hardware and hand tools.
It plans to work with manufacturing associations and export promotion councils to recruit top sourcing professionals across verticals.
The Future Of Global Sourcing
India’s manufacturing sector currently contributes nearly 17% to the country’s GDP and employs about 21% of the workforce, totalling 30 Mn or so. And the Make-in-India vision document aims to increase this GDP contribution to 25%.
Interestingly, BuyHive plans to tap into this manufacturing sector with its ESAP initiative and ecommerce solutions to grow its business and also raise growth capital.
“We are profitable right now, but as we add on freelancers and expand faster globally, we would want to raise capital,” said Pore. This capital should come from sourcing and manufacturing sector leaders so that the company can work with investors towards growing their businesses.
The company expects to start fundraising in another three months when it upgrades the freelancing platform. “We are not just looking for venture capital but for strategic investors,” Pore added.