“I could either watch it happen or be a part of it.” — Elon Musk
With a similar motivation to be a part of something bigger than themselves, Aaditya Sharda and Souvik Sengupta founded Infra.Market, a B2B online procurement marketplace for real estate and construction materials, with technology as their focal point.
During a recent conversation about the current scenario of India’s construction industry, the founders at Infra.Market told Inc42 that the infrastructure and construction industry of India is estimated to be valued at $300 Bn by 2020.
However, the industry is largely unorganised and adding to that was the aftermath of the demonetisation of currency notes in 2016, where India witnessed a major fall in the revenue of the construction industry due to the cash crisis in the market. Besides, around the same time, the global financial turmoil pushed the construction curve further downwards, demanding that the government step in to stabilise the sector.
The Centre then started taking major steps to uplift the economy by creating new fiscal policies supporting the construction sector, leading to it becoming a multi-billion dollar industry contributing majorly to India’s growing GDP.
Infra.Market is looking to be a key player in the construction industry by taking the procurement process online and bringing parity and transparency in pricing. Aaditya Sharda explains, “We all know, how critical is it for construction companies in India to avoid project cost over-runs to stay financially viable. We believe that procuring the materials at the right price can help them avoid these cost over-runs to a large extent.’’
Infra.Market realises that every construction project is unique in its own way and procurement of materials for these projects is an art which requires strong technical and negotiation skills and a local geographical know-how, which many construction companies in India find difficult to build in-house. Compared to large companies, smaller companies are deprived of the cost benefit on procurement of materials due to their small order-size or due to the presence of multiple middleman in the supply chain. Further, the supply chain for various materials is fragmented and unorganised.
‘’We sought to re-define this and decided to bring transparency in the procurement process of construction companies,’’ emphasises Aditya Sharda.
Infra.Market: Lower Prices And A Level Playing Field
- Central procurement unit to help Real estate and Construction companies procure materials for their project
- Better pricing and credit facilities to enhance parity, transparency, and productivity in the construction sector
Mumbai based Infra.Market has built a centralised online market for real estate and construction materials that offers fair pricing and an enhanced technology experience to its clients. It does this by aggregating clients’ demands, matching them with its supply chain, and offering economies of scale on material pricing, along with affordable credit options that were earlier not available to individual customers.
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Aaditya Sharda says, “We have enabled our clients to make an average of 5%-7% savings on their input costs.”
There are some other B2B ecommerce companies serving in the same space, the notable being Moglix, IndustryBuying, OfBusiness, and Power2SME. Though these online startups are providing efficient services to the construction industry, not all of them act as a one-stop solution for construction and related products. Infra.Market’s edge is its industry specific focus.
Souvik Sengupta adds, “If you consider some of the other startups in the B2B ecommerce industry in India like Industrybuying & Moglix, they have chosen to cater to a large number of products across diverse sectors. We are following a different model than them. We consciously have been industry focused, product focused and geographically focused so far.’’
Infra.Market believes that the dynamics of running a business as a B2B are starkly different than that of running a B2C, be it offline or online. Only giving discounts to attract customers doesn’t work in B2B.
‘’We will remain relevant only if we add value to our customers by helping them consistently procure cheaper in the long run, ‘’ says Souvik Sengupta.
Infra.Market’s strategy has helped the company achieve the target of bringing value for customers by helping them save 5%-7% of their input cost. In a nutshell, Infra.Market truly believes that as a B2B ecommerce platform it is bringing India’s unorganised construction industry online.
The Infra.Market Edge
- Enhanced technology platform connecting client requirements directly to its supply chain, enabling ease of ordering and delivery tracking through their mobile application.
- Online hassle free registration with ease of credit and instant quotes
As a technology platform, Infra.Market creates a direct communication chain between its clients and supply chain, ensuring an efficient delivery tracking facility. The startup dishes out a unique and personalised experience for its clients and allots each one of them a dedicated relationship manager to help understand and fulfill their requirements.
Aaditya Sharda adds “Our customer repetition is close to 90% due to our customer specific relationship managers. This enables us to bring to our clients an experience none of our competitors are currently providing. Our mobile application is helping us ensure our customers have a substantially better experience in ordering and tracking their order till delivery to their site, an experience unheard-of in the industry.”
Souvik Sengupta says, “We are growing at 100% year-on-year for the last couple of years; we expect to continue this growth. Our focus is to stay profit-centric and consequently, we wanted to first build a profitable ecommerce model and then grow it by diversifying into multiple products and expanding geographically, instead of the other way around.’’
Infra.Market’s strategy has helped the company become successful in touching the projected levels of revenue growth and maintaining positive PAT levels every year since inception. They believe in raising only what the business needs and hence the company has only raised $1 Mn in the last three years from an angel investor. ‘’We will further raise $3 Mn in a Series A in FY20 to widen our network, market penetration, launch new products and enter new markets,” says Souvik Sengupta.
The Sweet Spot That Infra.Market Has Picked
Infra.Market aspires to become India’s largest B2B ecommerce player in the construction space and its next target is achieving revenue of $15 Mn in FY20. With this in mind, the startup is aiming to capture a larger market and bring more and more construction and infrastructure products online.
The industry has a positive outlook with experts forecasting that India is going to be the third largest construction market globally by 2025. In fact, the construction sector has been the second highest recipient of FDI in 2017.
In order to increase the participation of foreign players in the ecommerce field, the Indian Government hiked the limit of foreign direct investment (FDI) in the Ecommerce marketplace model for up to 100 per cent (in B2B models).
There are projections that by 2020, the B2B ecommerce market is set to grow at 2.5 times from the present pace to touch $7 Bn. The global B2B ecommerce market will reach $6.7 Tr.
Though the projected statistics seem opportune, ironically, construction is one such sector where companies invest less than 1% of their revenues in adopting new technologies. The sector however is ripe for disruption and the adoption of technologies can help greatly enhance the quality, productivity, and output of the industry as a whole. And that is exactly the sweet spot that Infra.Market is leveraging — using technology to design its product and ultimately benefiting the construction segment in its entirety.
With its USP as a centralised platform for all construction-related procurement solutions, better pricing and an enhanced customer experience, Infra.Market is emerging as a game-changer in the construction industry.