IndiaMART is an Indian B2B platform that connects manufacturers to retailers, and sellers to buyers by providing listicle data such as location, services, or products they offer.
In this article, we explore what is the business model of IndiaMART and their fantastic marketing strategy that dominates the market.
About The IndiaMART
|Noida (Uttar Pradesh)
|Dinesh Agarwal & Brijesh Agarwal
|$40.8 mn (August 2023)
|$98.40 mn (Rs 753 cr in FY22)
|IndiaMART InterMESH Limited
Founder & Team of IndiaMART
Dinesh Agarwal, the Co-founder and CEO of IndiaMART, comes from a traditional business family in the Napara district of Uttar Pradesh. He pursued his education at a Hindi medium school before attaining his B.Tech degree in Computer Science & Engineering from Harcourt Butler Technological Institute, Kanpur. Prior to establishing IndiaMART, Agarwal gained experience working in various companies, including HCL Technologies, which led him to move to the US. At HCL, he held the role of a Senior System Analyst. Furthermore, Dinesh also served as a Software Engineer at CDOT Alcatel Research Centre.
Brijesh Agrawal, the Co-founder and Director of IndiaMART, earned his BMS degree from the University of Lucknow. Subsequently, he pursued his PGDBM from NIILM before joining forces with Dinesh Agarwal in their entrepreneurial journey.
As of August 2023, IndiaMART employed approximately 4,821 professionals across various cities in India.
IndiaMART – Startup Story
After graduating in software engineering, Dinesh embarked on a journey that would lead him to co-found IndiaMART. He initially received tempting job offers, but after several years of work in various Indian organizations, he sought greater purpose. His path led him to the US, where he spent three years at CDOT. Despite a comfortable life, Dinesh sensed a lack of passion in his work and decided to return to India in 1996.
Inception of IndiaMART
Dinesh, an early internet adopter, recognized the potential it held for business promotion. Motivated by this insight, he initiated an eCommerce venture from his Delhi flat in collaboration with Brijesh. The concept revolved around creating a platform for businesses to exhibit their products through dedicated web pages. However, attracting clients was a challenge initially due to limited computer and internet awareness.
Educating and Expanding
To address this, IndiaMART recruited marketing and sales professionals to educate businesses about the internet’s potential. They also participated in trade fairs at Pragati Maidan to amplify awareness. ‘Nirula’s,’ a prominent North Indian food chain, became IndiaMART’s inaugural client. The company not only designed but also maintained Nirula’s website for an annual fee.
IndiaMART’s early strategy focused on providing free listing services. As queries from listed businesses multiplied, the company’s sales representatives engaged directly, emphasizing the benefits. Slowly but surely, businesses recognized the value and began purchasing paid services, propelling the platform’s growth.
However, the absence of robust internet infrastructure posed its challenges. Communicating queries to businesses without email IDs required creative solutions like printing and faxing. Yet, the company managed to acquire around 1000 clients by 1999.
Adapting and Thriving
The 9/11 attacks presented a substantial challenge, severely affecting exports and slashing IndiaMART’s revenue by nearly 40%. Nevertheless, the team remained resolute.
A Shift in Focus
A pivotal moment came when IndiaMART shifted its focus from exports to the domestic market, serving businesses within the country. Today, the platform proudly hosts over 6 million registered suppliers, a testament to its journey from inception to prominence.
How IndiaMART Works?
Connecting Sellers and Buyers: IndiaMART functions as an intermediary, facilitating connections between sellers and buyers in the business ecosystem. Sellers have the option to create listings, whether free or paid, on the platform to showcase their products and services. They can also leverage IndiaMART’s assortment of marketing tools to enhance their reach and visibility within a broader audience.
Navigating the Buyer’s Experience: Buyers, on the other hand, have the opportunity to explore an extensive range of products and services on IndiaMART. Utilizing categories, keywords, and location-based searches, they can efficiently discover what they’re looking for. Additionally, buyers can directly interact with sellers, either to solicit quotes or to initiate orders.
Role of IndiaMART: At the core, IndiaMART provides the foundation for buyers and sellers to engage in business transactions. Beyond this pivotal role, the company extends an array of supplementary services aimed at bolstering the growth of sellers’ businesses. These encompass marketing initiatives, lead generation strategies, and streamlined payment processing, among others.
Key Aspects of IndiaMART’s Functionality:
- Diverse Seller Database: IndiaMART hosts a substantial repository of sellers spanning diverse industries. This comprehensive array of suppliers makes it a hub for sourcing products and services from a wide spectrum of providers.
- Flexibility in Listings: Sellers enjoy the flexibility to choose between free and paid listings on IndiaMART. While free listings cater to all visitors, paid listings offer enhanced features and a higher likelihood of capturing the attention of potential buyers.
- Empowering Marketing Tools: IndiaMART equips sellers with an array of marketing tools to broaden their outreach. This toolkit encompasses email marketing, search engine optimization (SEO) strategies, and social media marketing, amplifying sellers’ visibility and engagement.
- Simplified Payment Processing: The platform streamlines the payment process, offering an array of secure options for sellers. This ensures a seamless payment experience for buyers, further enhancing the ease of transactions on IndiaMART.
IndiaMART – Business and Revenue Model
As the pioneering B2B eCommerce marketplace, IndiaMART functions on a subscription-based model catering to suppliers. While IndiaMART extends its services to buyers at no cost, its primary revenue stream originates from subscription fees paid by sellers, proceeds from the sale of ‘request for quote’ services to buyers, and the facilitation of payment services. Additionally, IndiaMART generates advertising revenue by permitting individuals and businesses to place advertisements on the IndiaMART app.
IndiaMART – Growth and Revenues
IndiaMART’s journey, from its inception during the nascent stages of the B2B e-commerce sector to its current status as the leading player, exemplifies its remarkable growth trajectory. Moreover, IndiaMART has earned the distinction of being the world’s second-largest online B2B marketplace.
Here’s a glimpse into some of the noteworthy growth achievements of the company:
- The company boasts a network of over 143 million registered buyers and more than 6.4 million suppliers.
- IndiaMART hosts an extensive catalog of over 71 million products and services.
- With a commanding 60% market share in the online B2B Classified space within India, IndiaMART stands as a formidable force.
- In the December quarter of 2022 alone, the platform garnered an impressive 379 million+ hits on its website and app.
- IndiaMART achieved a significant milestone by establishing 52 offices in as many weeks, resulting in a tenfold increase in sales within a single year.
- Recognizing the value of a flexible and supportive work environment, IndiaMART has embraced a weekly salary disbursement system. This approach, identified as a critical factor influencing employee satisfaction, has been successfully adopted in various countries including New Zealand, the United States, Hong Kong, Australia, and more.
IndiaMART’s accomplishments underscore its role as a trailblazer in the B2B e-commerce landscape and its commitment to innovation, growth, and employee well-being.
IndiaMART Financials – Q4 FY22 Performance
IndiaMART recently unveiled its financial results for the fourth quarter of fiscal year 2022, demonstrating strong growth and performance. The company achieved a consolidated operating revenue of Rs 201 crore, marking an impressive 8% quarter-on-quarter increase from the Rs 188 crore revenue reported in Q3 FY22. This growth can be attributed to an 11% rise in the number of paying customers, showcasing the expansion of IndiaMART’s customer base.
Profit and EBITDA Trends
However, the quarter also witnessed a decline in profits. While Q3 FY22 reported profits of Rs 70 crore, Q4 FY22 recorded a figure of Rs 57 crore. It’s worth noting that this decline aligns with a trend observed over FY21’s quarters. Looking at the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of IndiaMART, the company achieved a consolidated EBITDA of Rs 57 crore. Nevertheless, the EBITDA margin for Q4 FY22 stood at 28%, a decrease from the 48% EBITDA margin reported in Q4 FY21.
FY 2019-2020 Highlights
Switching focus to the financial year 2019-2020, IndiaMART’s growth was remarkable. The company’s revenue surged to Rs 707 crore, a significant increase from the Rs 507 crore reported in FY 2018-2019. Moreover, IndiaMART’s net profit for FY 2019-2020 soared to Rs 147 crore, a notable climb from Rs 20 crore in FY 2018-2019. Impressively, the company’s collections from customers experienced a 10% surge, reaching Rs 738 crore in FY 2019-2020 from Rs 671 crore in FY 2018-2019.
IndiaMART’s consistent growth and financial performance underscore its robust market position and effective strategies for capturing and expanding its market share.
IndiaMART – Awards
Here’s a glimpse of the array of awards and accolades bestowed upon IndiaMART over the years:
- Red Herring 100 Asia Awards 2008
- Manthan Award South Asia and Asia Pacific 2013 under the ‘E-business and Financial Inclusion’ category
- ‘Special Contribution Award’ at WASME – Super SME Awards, 2016
- ‘Best Online Classified Website Award’ at Drivers of Digital Awards, 2016
- ‘Best Business App Award’ at GMASA 2017 and ‘Best Business App’ at Drivers of Digital Summit & Awards, 2018
- ‘Best Online Classified Application’ at Drivers of Digital Summit & Awards, 2018
- ‘Video Content in a Business Website- Special Mention’ at Video Media Awards and Summit 2019
- India Law Awards 2019 for ‘Technology, Media and Telecommunication In-House Legal Team’
- “Most Promising Company of the Year” at the CNBC Awaaz CEO Awards
- ‘Bada Aasaan Hai’ received the ‘Best Video Content in a B2B Marketing Campaign Award’ at the Video Media Awards & Summit, 2020.
- LACP2022 Spotlight Awards: IndiaMART’s annual report won the “Best Annual Report” award at the LACP2022 Spotlight Awards. The awards recognize companies that have produced exceptional annual reports demonstrating excellence in communication, design, and content.
- CIO100 India: IndiaMART’s CIO, Vivek Agarwal, received the “CIO of the Year” award from CIO100 India. The award honors CIOs who showcase remarkable leadership in leveraging technology to enhance organizational efficiency.
- NASSCOM E-Tech Awards: IndiaMART clinched multiple NASSCOM E-Tech Awards, including the “Best B2B Marketplace” award in 2016 and the “Best B2B E-Commerce Platform” award in 2018. These accolades celebrate companies exhibiting technology-driven innovation and growth.
- Red Herring Top 100 Asia: IndiaMART has earned a place on the prestigious Red Herring Top 100 Asia list on multiple occasions. This list highlights the most innovative private technology companies across Asia.
- Frost & Sullivan Best Practices Award: IndiaMART has consistently secured the Frost & Sullivan Best Practices Award for “Best B2B Marketplace” in India. The recognition is conferred upon companies that excel in developing and implementing groundbreaking B2B marketplace solutions.
IndiaMART – FAQs
IndiaMART facilitates payments through various modes, including online payment gateways and traditional methods like bank transfers. The platform ensures secure transactions between buyers and sellers, providing a seamless payment experience.
Unlike Amazon and Flipkart, IndiaMART primarily focuses on business-to-business (B2B) transactions, connecting suppliers and buyers within the industrial and commercial sphere. Amazon and Flipkart, on the other hand, cater to a broader range of retail customers with a focus on business-to-consumer (B2C) sales.
IndiaMART does not typically offer franchises in the traditional sense. However, you can explore partnership opportunities and become a registered seller on the platform to offer your products and services to a wide audience.
IndiaMART generates revenue through various channels. The primary sources include subscription fees from sellers for premium services, fees from offering “request for quote” services to buyers, payment processing services, and advertising revenue from businesses that post ads on the platform.