This Kolkata-based B2B ecommerce company is changing the way SMEs procure goods and raw materials
NowPurchase is a B2B ecommerce startup that delivers seamless procurement for different industries and companies irrespective of size, geography or sector.
At a glance:
Startup: NowPurchase
Founded: 2016
Based out of: Kolkata
Sector: B2B ecommerce
Problem it solves: SME procurement
Funding: Bootstrapped
Ecommerce brings to mind sales festivals, perpetual discounts, and endorsements. It is no secret that ecommerce has changed the way consumers shop in India, but is also changing the way businesses procure raw materials and other industrial equipment.
While large organisations do not typically find it difficult to source raw materials, Small and Medium Enterprises (SMEs) often see a challenge in this regard and often, give finance constraints, source for one to three months. To make this very activity easier, Naman Shah founded NowPurchase.
The company procures raw materials for companies in varied industries, irrespective of their size, geography or sector. “Using a technology driven approach of a curated ecommerce platform and a purchase management dashboard, we seek to deliver seamless procurement and help SMEs increase their productivity,” says Naman.
The idea of the platform is to help manufacturing entities increase their productivity by freeing them of their procurement and purchase activities.
Naman has worked in several startups based out of the US and Singapore, and in his last stint he led the expansion for BizEquity, a US-based fintech startup, in Asia.
Starting NowPurchase
While B2C business have undergone a sea change over the last 10 to 15 years given the many advancements in technology, traditional businesses have largely been left out of the tech and service revolution.
“This became all the more evident when we started discussing this with the management and senior officials at our family business, Nipha. We could testify that not much had changed in operational processes like procurement, planning, sales, or accounts in the last decade. Of these, procurement was tedious,” says Naman.
This was the push he needed to startup and address a pain point for many businesses. His cousin Aakash Shah, a seasoned entrepreneur with an understanding of mechanical engineering, rural marketing and B2B consultative selling, excited by the idea, joined Naman as co-founder.
Visiting 20-25 factories in Delhi-NCR, Kolkata and Mumbai, the two found their hypothesis to be proven right, they started NowPurchase in 2016.
The duo onboard suppliers by working with brands and their dealers and distributors across India. Initially the duo had to reach out to suppliers, currently the team claims to have over 100 supplier requests in a few days.
The workings
A customer can select from items listed on the NowPurchase website and place an order. In case a product is not available, an enquiry can be raised on the platform. Once an order is placed, goods are dispatched through the company’s supplier network within 24 hours, and a customer receives it in five days on average.
The team has also set up Purchase as a Service (PasS) for its regular clients. PaaS clients have access to the website’s purchase management module to raise enquiries and manage their purchase flow.
“PaaS clients are assigned a purchase manager in their industrial cluster, or from our head office. We act like an outsourced purchase manager. We take all their enquiries, and get them the best quotations, and the products delivered,” says Naman.
In traditional businesses, both the buyer and the supplier side aren’t always tech savvy. However, Naman says setting up in Kolkata was a boon as there is a ready talent pool.
Timely payments were an important part of raw material procurement. Given that most of NowPurchase’s customers are SMEs, the average shipment value is Rs 5000 to Rs 10,000, and products aren’t standardised. To make customers comfortable, NowPurchase allows a customer to book a shipment with an advance payment, and settle the balance on delivery.
“This mimics the offline behaviour, and ensures customers’ cash is not stuck for the delivery cycle,” says Naman.
The market and future
NowPurchase has set up a NP Phygital, a network of small hardware shops in Tier II and Tier III locations where consumers can look up its product range. It also helps suppliers expand their reach, liquidate their stock, and grow using digital marketing. NowPurchase also focuses on providing solutions to both industrial buyers and suppliers.
According to rough industry estimates, B2B ecommerce is a $500 million global market, which is in its early stages in India. There are 4.8 crore SMEs that need bulk supplies, and that's a much bigger opportunity than B2C ecommerce.
“All the billing under happens under the NowPurchase brand. NowPurchase makes a margin on the buy-sell spread. NP Phygital and Supplier First programme are additional revenue streams as well,” says Naman.
The team claims to have over 2,500 businesses as customers, of which around 100 are regular. It also claims to have over 1000 supplier partners, and the team has a transfer price and percentage discount.
Naman adds that they currently process over 1,000 orders every month with an average order size of Rs 15000. The team claims to be clocking a 25 percent month-on-month growth.
“There is a very strong repeat business we are seeing from our top customers. SMEs, and companies with revenues up to Rs 500 crore have been our sweet spot. We have delivered in every state and union territory in the last year. We are growing 20 percent month-on-month and are on the path to supply over one lakh products and have over 1,000 supply partners,” says Naman.
NowPurchase aims to expand to over 20 clusters across the country in the next 12 months, and have over one lakh products and over 5000 supply partners.