Friday, 19 August 2016

Re-Inventing of Business



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


Rise of the Middlemen ?




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





 



  


No comments:

Post a Comment