We aspire to be the next Alibaba in B2B e-commerce: Moglix, founder & CEO, Rahul Garg
In an interaction with ET, Rahul Garg, founder & CEO, Moglix discusses the B2B market in India, impact of GST on manufacturing, Moglix plans and more.
Economic Times (ET): How big is the B2B commerce market in India? What is Moglix’s share in the business?
Rahul Garg (RG): The Indian B2B e-Commerce market is expected to reach $700 billion by 2020. India has 14 million retailers fueling a $525 billion market. B2B e-commerce is a fast-emerging space. The e-commerce industry continues to evolve and experience high growth in both developed and developing markets. B2B e-commerce in India is also in line with the government’s digital growth plans. This initiative through a targeted investment of nearly $17 billion, will transform India into a connected economy and attract investment in electronics manufacturing while creating millions of jobs.
We aspire to be the next Alibaba in this sector in India. Global B2B e-commerce market is estimated to touch $7 Trillion by 2020, which is much larger than the B2C space even today. Moglix is building on its expertise of technology and scale to ride this wave coupled with government's thrust on ‘Make in India’ and ‘Digital India’.
Moglix, currently serves the manufacturing sector, both institutional customers (B2B) and individual customers (B2C). Automotive sector, metals and mining and FMCDs are the top three sectors we cater to.
ET: How much of B2B procurement is done online at present. How will this change in the next five years?
RG: India's manufacturing sector has immense potential but its contribution remains a mere 16% of GDP. According to reports by consultancy PwC, 80% supply chain of manufacturing companies are still running offline and indirect purchase across India is largely unorganized.
Currently B2B ecommerce market is at a nascent stage. In the next few years, B2B ecommerce market is expected to mature and I see manufacturing companies (at all scale) adopting online mode of purchase. Like B2C ecommerce space, B2B ecommerce space is expected to grow by leaps and bounds.
ET: What is your vision for Moglix?
RG: Today, Moglix, has 300+ large manufacturing clients and over 200K SMEs as well as 5000+ supplier partnerships across 35+ categories. Some of our large customers include Vedanta, Lumax Industries, Unilever, GSK, Havells, Uno Minda, Tata Hitachi.
Moglix’s vision is to digitize and transform every aspect of supply chain and B2B commerce which is unorganized and manual and develop solutions to transform supply chain through technology. We want to touch at least half of the manufacturing companies through one of our solutions. We aspire to become a global B2B commerce company, looking forward to expanding to at least two countries in the next five years.
ET: GST has had a profound impact on the manufacturing sector. What is your view on the tax reform?
RG: The Goods & Service Tax (GST) regime has triggered a transformation in the manufacturing sector like never before. The migration from a multi-layered indirect taxation system to a unified indirect taxation system is fueling India’s manufacturing sector. In the latest Ease-of-Doing-Business rankings, India has made the highest jump of 30 spots with a year’s time bringing the nation to the 100th position among 190 countries. GST will eventually streamline business operations to become more organized and profitability oriented, rather than being tax oriented.
In my opinion, the manufacturing companies don’t have the resources and the technology to understand the nuances of GST and adopt GST regime at a rapid pace. Consequently, this has increased the tax compliance costs for manufacturing companies in hindsight. The onus lies on the technology companies to create cost effective digital solutions like GreenGST for manufacturing companies who are looking for a seamless transition from multi-tiered tax structure to a unified and consistent one. Lessening the travails of small and medium sized enterprises to make business easy is of high priority. This need of nurturing a ‘easy-business’ environment for manufacturers is what Moglix believes in and is working towards achieving.
ET: What are Moglix’s hiring plans?
RG: Moglix looks for individuals with the ability to think like an entrepreneur, are innovative and who have high problem-solving abilities. We also look for candidates who are passionate about making an impact on the manufacturing sector in India. Our culture empowers millennials with the freedom to think out of the box and be fearless to make decisions. Moglix is inclined towards hiring people who have start-up experience to leverage the workaholic nature.
Currently, we have an employee base of around 300. We are continuously hiring in technology, supply chain, sourcing and vendor management domains.
ET: With Digital India and other initiatives launched by the government what opportunity do you see for Moglix?
RG: Government of India has an ambitious plan to make India the third largest manufacturing country in the world by 2020. It’s a challenging goal but the government is making efforts having introduced reforms like Make in India, Digital India and GST to give impetus to this sector and make it a reality.
Digital ways of manufacturing and supply chain management, such as artificial intelligence, machine learning, cloud computing blockchain and more, that are already established in leading global economies, are now taking a forefront in India.
Technology plays a key role in bringing about disruption. In line with India’s Make in India and Digital India initiatives, we are working towards elevating manufacturing sector of the country by organizing and digitizing the supply chain of manufacturing units. Through centralized digital procurement we are laying a foundation stone to deploy new age technologies like machine learning, IoT and Blockchain. It will, therefore, lead to overall growth of the manufacturing sector in future, albeit slowly and steadily.