e-Commerce is not e-retail
The good story is that e-Commerce has started getting coverage that it justly deserves across all the media channels in India. The unfortunate part is that the media confuses e-retail for e-Commerce. E-retail which focuses on sale of consumer products has not really been able to get their act in order and has led to astronomical valuations of some companies despite unbelievable losses which have been over-shadowing many wonderful initiatives that have taken place in the other spheres of e-Commerce in India over the past decade. As a matter of fact some of the e-Commerce initiatives launched in India have silently grown to become the largest in their class in the world. Creating convenience, efficiency and transparency for all the stakeholders that they have touched.
A leading example of a value creating e-Commerce initiative is www.metaljunction.com. This initiative focused on solving the problem that small and medium sized re-rollers, fabricator and traders of steel had in sourcing secondary steel products from the main producers of steel. metaljunction was able to identify and eliminate not only the pain points of both seller and buyer but also eliminate those middlemen who were not creating value but adding to cost. In view of the improved e-Commerce process for the sale of secondary steel, metaljunction has enabled 12 million tons of steel to be sold online for their clients to a buyer base across India which exceeds 4000. It would be important to mention here that one of the pain points that metaljunction was able to focus on and eliminate was the need for the seller of steel to be paid upfront while small and medium sized buyers required 30 to 60 days of credit. This funding requirement, before metaljunction entered the picture, was fulfilled by middlemen who charged the buyer interest in excess of 24% per annum. metaljunction was able to encourage both foreign and Indian banks to offer the buyers buying on the metajunction platform to get overdraft facilities at rates which were half of what was being paid by them, i.e., 12%. It was a win-win solution that the seller, buyer and the bank benefited from and which helped disintermediate the middlemen. Needless to mention the entire process is online which makes it convenient, scalable and efficient as well.
There are many more such problems that mjunction, of which metaljunction is a strategic business unit, has been able to resolve with the help of e-Commerce which I will share in the days to come.