Labbazaar brings testing, measuring and calibrating tools online for a growing economy
Infrastructure is considered the backbone of an economy. Its development encompasses that of many other industries as well. The construction equipment industry is among the many industries directly dependent on infrastructural growth.
Rahul Gupta, who had over a decade's experience in the construction equipment industry, observed that business-to-business industrial product segment is marred by low quality product and price disparity. He gives a case study of his friend who was running a construction company and had bought a test and measuring equipment for almost twice the market price of the product.
Rahul says that this happened because such test and measuring equipment is not easily available, leading to a lack of transparency in pricing and usage.
With the core idea to expand the availability of lab supplies by providing genuine products to customers at decent prices, Labbazaar was launched in October 2015. “We also wanted to offer instruments on one medium, unlike other online portals, to identify Labbazaar as one hotspot in the market for testing, measuring and calibration tools,” says Rahul, 33, Founder and CEO, Labbazaar. He is a graduate in Economics (hons) from Delhi University. He comes with more than a decade of experience in the field of laboratories. He also takes up Art of Living workshops in a bid to give back to society.
Starting out the Delhi-based platform with an investment of around Rs 50 lakh, Rahul says there has been steady growth. Labbazaar follows an inventory-based e-commerce model and supplies products across the country.
“We are getting 800-900 orders a month and our clients include Jaypee Group and IIT, Delhi, among others. Besides, a large percentage of sales (more than 50 percent) comes from the southern part of the country, as it has more manufacturing units, and people are quality conscious,” adds Rahul.
The platform is still bootstrapped and has plans to raise funds once it sets its foot on the ground.
Market and competition
According to IBEF, the construction equipment industry’s revenues reached $6.5 billion by FY14. Between 2007 and 2014, revenues have increased at a CAGR of 8.38 percent and is further estimated to rise at a CAGR of 13.1 percent on rapid infrastructure development undertaken by the government projects.
Indian Construction Equipment Manufacturers Association says that the Indian construction equipment industry is expected to grow to $5 billion by FY 2019-20 from the current $2.8 billion.
Rahul says that the total market size for tools, equipments and lab supplies is around Rs 2,000 crore. He intends to grab at least 15 percent of the market share two years down the line, he says.
In industrial supplies, Industrybuying, UrjaKart and Tolexo are some the few big names which have made it in the sector.
Early this year, Industrybuying raised Rs 12 crore in debt financing from Trifecta Capital. Earlier, it has raised funding from SAIF Partners and Kalaari Capital.
On competition, Rahul says that Labbazaar is the only portal focussed on lab supplies. However, he cannot overlook competition from others and he intends to stand apart through his technical support, for customers to choose the right product for their application. Also, Labbazaar provides direct shipping, which helps cut down middlemen and the associated costs.
Challenges and growth prospect
The biggest challenge Labbazaar faces is apprehension of brands to go online. The platform, however, is slowly convincing retailers about it. It is also adopting various marketing methods, both conventional and digital, to acquire consumers.
On growth prospect, Rahul says that there are around four crore SMEs and technical institutions in the country that struggle to buy genuine products at a genuine price. “We are offering a big opportunity to the market and we have captured the gap in the market to fulfill the demand of customers. We are also augmenting our product line regularly with hundreds of new products to cover possible product demand of the segment,” Rahul explains.