How an offline business of importing cashew nuts to SMEs gave birth to Tradohub
While most brands, and in some cases even equipment, are available online, one segment that is left far behind is industrial raw materials for SMEs. Tradohub was established to bridge that gap. An e-commerce portal, Tradohub claims to cater to the following sectors- chemicals, additives and intermediates, polymers and engineering plastics, food and agriculture products, pharmaceutical APIs and bulk drugs, spices, oil seeds and grains, edible nuts and pulses and other industrial materials.
According to Akash Domadiya, Tradohub’s key vision is to supply globally sourced raw materials with a single click. He further adds that the team is keen on leveraging technology for easy, efficient and speedy procurement of raw materials at lower prices, and leverage economies of scale by aggregating the demands of SMBs and enabling them to grow and even compete with larger counterparts.
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A vision to change traditional models
The founders Akash and Harsh Patel were doing business in international trade for three years. The duo had first met at Pirmal Water (Sarvajal), where Akash was on a fellowship with the revolutionary water ATM project, and Harsh was interning in sales and business development. They became friends, and in the course of their conversations, they realised that they wanted to build something that deviated from the traditional course.
"We wanted to leverage our passion for entrepreneurship and technology to help small and medium businesses," adds Akash. Initially, Akash says that they had started the company with their own money. He further adds that they had started to build the business offline, where they were importing raw cashew nuts and supplying the same to small companies.
"At the end of the second year, when our turnover was two crores, we realised we had the money we needed to develop Tradohub," says Akash. Soon, the team started expanding to include people for market research and data gathering. Today, Akash says that they are a team of 15, making a turnover of three crores.
According to Akash, the numbers look promising. He adds that they have closed a three crore-worth deal on a cashew plant import and a few other deals. He adds that over 42.5 per cent of their users are repeats. The average order size is Rs. 10 lakhs.
"As we are a B2B platform, we don’t limit ourselves to few cities. However, our focus is on western India, where most of the industries are located," says Akash.
While the team is happy with the traction Tradohub is receiving, they did face problems in the initial days. The beta version had some technical problems. Akash also adds that they had to almost reinvent the wheel, what with developing new systems, processes and research, as there were no players they could take reference from. "Convincing the SMEs to pay upfront was a challenge. Also, building a scalable, robust and reliable technology to manage and track deals at every stage is a challenge," adds Akash.
Market and USP
As per reports, the worldwide online B2B market is poised to reach double the size of the B2C market, reaching $6.7 trillion by 2020. The reports also suggest that the current B2B online market is at $1.5 trillion. In India, it is believed that the online B2B market is growing at close to 30 per cent every year. Reports suggest that the Indian B2B market, which currently is at $300 billion, is set to reach $700 billion by 2020.
Hoping to take a chunk of this share, Tradohub claims that theirs is a niche ecommerce space that comes with domain expertise. They also say that their suppliers are all verified on the basis of government licenses, reports, market reputation and financial data amongst others. "Our focus is to make trade easy, efficient and economical for SMEs," adds Akash.
The venture is currently bootstrapped, but the team is looking to approach investors in the next six to eight months. The team currently is focused on increasing their size, as well as that of the supplier base (from 80 to 1000). They are also looking at developing an app for Android, iOS and Windows Mobile. Akash further adds that they are targeting a turnover of Rs20 crore by 2016, Rs100 crore by 2017 and Rs 1000 crore by the year after. "We want to bring an IPO by 2020," concludes Akash.