METRO AG is a German wholesale giant ,
having 22 stores in 13 Indian cities , from where your local grocers buy goods
at " Wholesale Prices " , for retailing in your neighborhood at
" Retail Prices "
It plans to invest Rs 2100 cr in India ,
to open 50 stores by 2020
Now , out of self interest , METRO is
reaching out to help create thousands of " Start Ups " all over India
These could be , small hotels / catering
businesses / dhabas / kirana stores etc
METRO is helping " Create " these
brick-and-mortar Start-Ups ( as opposed to Online web sites ) by :
#
Sharing expertise and business secrets /
Providing office equipment at competitive prices
# Designing an exciting menu /
Putting you in touch with chefs / Kitchen Supplies / Food Safety ( for hotels )
#
Help you manage your back-end operations
/ Keeping costs low /
Streamlining supply chain
#
Managing your stocks / Inventory Management / Displaying your products
#
Helping entrepreneurs understand customer demand and market trends / Quality standards and hygiene
#
Plan more efficiently / provide better customer service and delivery
techniques
No doubt METRO's competitors ( Ambani / Adani / Biyani / Tata / Walmart
etc ) , are keenly watching !
But METRO is not the only one "
mentoring / guiding / lending a helping hand " to small retail businesses
To know how a new set of " Online Middlemen"
are also helping India's retail shops ,read my following earlier blog :
--------------------------------------------------------------------------------------------------------------------------------
Wednesday, 18 November 2015
For long , marketing pundits have been telling us :
" Internet is all about disintermediation . There is no
place for middlemen .
Distributors / Dealers / Agents / Retailers etc ,
will gradually become redundant .
With arrival of Online Market Platforms ( aka,
e-Commerce web sites ) , manufacturers
will accept orders online and directly deliver
to end users , bypassing supply chain "
Coming from Marketing Gurus of Harvard etc, this was accepted as
Gospel Truth !
Now a bunch of Indian Start-ups are proving them wrong !
These are , Bluebox / Browntape / Unicommerce ( and others I
have not heard of )
How ?
By acting as " Middlemen " ( of some sort )
between e-Commerce web sites and MSMEs of India
And what role do these " Middlemen " play ?
* Getting MSME listed on e-Commerce web sites as
" Sellers "
* Cataloguing their products
* Managing their inventories
*
Reconciling payments
* Maximizing Sales
*
Photo-shooting products.......etc
Is there a big enough " Market " for such "
Middlemen " Start-ups ?
Consider this :
# There are 500
lakh MSMEs in India
# Of these , barely 3.6 lakhs are currently
registered as " Sellers " on e-Commerce web
sites , distributed as follows :
*
Flipkart............... 60,000 sellers
* Amazon..............
100,000 sellers
*
Snapdeal............ 200,000 sellers
# Indian e-Commerce market was worth mere $ 5.3
billion in 2014
# As per Merril Lynch , this would go up to $ 220
billion by 2025, with 530 million buyers
So , there is scope
for many more of such " Mentoring Middlemen "
May be some such
" Middlemen " can help the MSME to export their products, considering
that India's exports have been continuously shrinking for past 10 months
Is there a "
Scope " to increase exports from MSME ?
Take a look at the following :
---------------------------------------------------------------------------------
Country /
No of MSME / Ave Export / year ( $ )
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Singapore
/
9,296
/ 6.74 Million
------------------------------------------------------------------------------------
Malaysia /
28,840
/ 2.05 Million
-------------------------------------------------------------------------------------
S.Korea
/ 2.9
million
/ 45 , 000
-----------------------------------------------------------------------------------
India
/ 30 million
/ 4, 000
------------------------------------------------------------------------------------
Now , even if each of our MSME succeeds in exporting just $
40,000 worth of exports per year , that would amount to ,
$ 40,000*50 million !
Currently each MSME ( on an average ) employs 2.5 persons
How many more persons would 50 million MSME need to employ , if each
were to raise exports by 10 times ? ( from $ 4000 to $ 40,000 )
It is reported that , even at the current level of operations ,
India's MSME sector creates 1.3 million jobs every year
For raising (Ave) MSME exports by 10 times , would that figure
go up to 13 million new jobs / year ?
Enough to absorb the 12 million persons joining our job market
each year ?
It is time for Indian Governments ( Central + States ) , to
encourage these " Mentoring Middlemen " Start-ups , by abolishing for
them , Corporate Income Tax , for next 10 years
Anything other than
such a " BIG BANG REFORM " , will amount to
tinkering !
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
20 Aug
2016
www.hemenparekh.in
/ blogs
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