POWER2SME: A powerful helping hand to MSME sector
POWER2SME: A powerful helping hand to MSME sectorNew Delhi, July 31 (KNN) Small and medium enterprises are the backbone of industrial development and has a huge role to play in the inclusive growth that a developing country like India demands. Small and medium enterprises always represented the model of economic development, which emphasized high contribution to domestic production, significant export earnings, low investment requirements, employment generation, effective contribution to foreign exchange earning of the nation with low import-intensive operations.
Keeping in mind the importance and extensive need of a strong MSME sector in India, KNN spoke to R Narayan, CEO & Founder, Power2SME in order to get some insights about the challenges of SME sector and how Power2SME provide a helping hand to eradicate them.
Q.1 WHAT IS POWER2SME ALL ABOUT?
Power2SME is the first ‘Buying Club’ for SMEs in India that is primarily established to help SMEs gain access to quality raw material at highly competitive rates. Essentially, we provide an integrated platform for a diverse range of raw materials like Chemicals, Inks, Paints, Metals, and Polymers etc. By taking complete ownership of the order process, including taking title of the goods, Power2SME eliminates the middlemen and their associated costs. We work with well-established suppliers such as Indian Oil, Arcelor Mittal, SAIL, GAIL, Rathi Steel, Jindal Steel, Haldia Petrochemicals, Dupont, and Dulux among others, to enable SMEs having turnovers ranging from INR 1-250 Cr to enable SMEs to gain quality raw materials at competitive rates.
As a consequence of working in close consonance with SMEs, we have been able to understand the problems that plague them, the most commonly cited one being, access to finance at easy credit rates that don’t put excessive strain on their limited capital. Recognizing the significance and ramifications of lack of easy finance that hinders the process of growth for these enterprises, Power2SME has expanded their services and is bullish about making SMEs in India bankable.
Our desire to ensure maximum satisfaction for our clients, coupled with the aim of integrating SMEs into India’s growth story has led us to offer the following categories of services, too -
· Business development & Marketing
· Financial services – advisory, funding and loan
· HR services
· Insurance services
· IT Solutions
· Training and Skill Development
Additionally, Power2SME’s online platform allows its customers to track all their purchases as well as undertake transactional activity such as placing new enquiries, checking price quotes, uploading purchase orders, checking status of delivery, account statement, notification of payment due etc. We have also launched India’s first app to source raw material with a couple of clicks. Currently available on Android, Power2SME app has all the capabilities in app that it offers on the website.
2. FROM WHERE DID YOU GET THE IDEA TO START POWER2SME?
In 2009, I along with a team of students from IIM, Lucknow, conducted extensive research to properly understand the problems faced by the SME sector – which only served to validate the notion of the unfair advantage enjoyed by corporates. Recognizing that one of the major problems hampering the growth of the SME sector was raw material procurement and its associated problems, I decided to build a portal where SMEs could submit their requirements and Power2SME would buy on their behalf. We started operations in 2012 and now we are present in 8 states with more than 30,000 customers in India.
3. WHAT ARE THE BENEFITS MSMEs ARE GETTING FROM POWER2SME?
POWER2SME is working truly to enhance the operations of MSME’s in India. Some of them include:
· Optimal pricing for raw material procurement
· Access to large manufacturers
· Single platform for wide variety of products
4. WHAT DIFFICULTIES DID YOU FACE WHILE STARTING POWER2SME?
One of the key challenges we faced in the early stages, was winning our suppliers’ trust for product procurement at competitive rates. Vis-à-vis competition, what differentiates us is that presently, we are the sole “Buying Club” for SMEs. Although, we do expect changes in the form of new entrants in the market and increased competition, it is heartening to see that today we have more than 30,000 SMEs registered with us and a quarterly business growth of 50%!
5. WHAT IS THE SOURCE OF FINANACE POWER2SME USE?
Power2SME raised foreign direct investment (FDI) amounting to USD 15 million from Inventus Capital, Kalaari Capital & Accel Partners in 3 rounds of funding.
6. WHERE DO YOU STAND RIGHT NOW? HOW ONE CAN MEASURE POWER2SME GROWTH PATTERN TILL DATE?
Power2SME has become a force to be reckoned with and has carved a place for itself in Delhi-NCR, Mumbai, Pune, Kolkata, and Chennai. We have also entered Jaipur, Coimbatore, and Cuttack (Odisha) and Lucknow market. By establishing a sizeable presence in such markets that are fast becoming SME hubs for manufacturing of various products, we hope to unleash the as yet untapped potential of the SME sector.
Our growth pattern has been on an upward trajectory, as is reflected in our annual turnover figures – in FY13 we had GMV of INR 19 crores, which then became 64 crores in FY14, and at the end of this year we expect to touch Rs. 500 crore.
With a current customer base of 30,000 SMEs, Power2SME is witnessing a business growth of 50% by the quarter with 70% repeat buying behavior.
7. WHAT IS POWER2SME’s FUTURE PLANS?
Studies have shown that the SME sector’s contribution to the country's GDP is expected to increase from the present 8% to 12% by 2020. Realizing the enormous opportunity that the SME sector presents vis a vis economic and social welfare and it’s potential to transform India’s business landscape and strengthen India’s position as a force to be reckoned with, the new government has designed various campaigns (Make in India, Swachh Bharat Abhiyan etc.) and policies that will have a long term impact on the economy.
With an already sizable presence in 8 states, our plan is to further expand to 20 states in 2 years .We, at Power2SME, aim to become a 7000+ crore company serving at least 50,000 clients by 2020 – an aim that considering our hugely satisfied consumer base, should be easy to achieve.
8. HOW YOU ARE GOING TO ACHIEVE THEM?
We are entering the regional markets to create strong brand awareness among the stakeholders and simultaneously connect SMEs and large manufacturing corporates. Our Vendor Development aims at supporting regional SMEs to aid them in “ease of doing business”. Additionally, entering the regional markets will be a significant step towards introducing the company's services to a contingent of brand marketers and build long-lasting business relationships with potential customers and deepen their engagement going forward. (KNN/ Zeba)