Here’s how Noida-based B2B marketplace Tradologie is changing the way traders do business
At an age when most people are contemplating retirement, Jagjiv Kumar ‘JK’ Arora decided to start up. The 59-year-old, who comes from a family that has deep roots in the steel industry, started his entrepreneurial journey with Tradologie, a “business-to-business (B2B) marketplace that allows traders do business in a new-age way”.
Launched in 2016, Noida-based Tradologie deals in bulk domestic and international commodities trade for metal, coal, raw material, and construction procurement, and enables real-time price discovery and negotiation mechanism to buyers through an online reverse bidding system on its platform.
“Tradologie is the first-ever enquiry-to-delivery trade enablement platform that has been set up to facilitate bulk global and domestic trade of commodities by acting as a direct interface between actual buyers and sellers,” says JK Arora, Founder and Chairman of Super E Factory Depot Pvt Ltd, which runs and owns Tradologie.
The Founder, better known as JK, says that the platform reduces the cost and influence of middlemen, brokers, and traders present in traditional distribution and procurement channels, and creates a “win-win solution for actual stakeholders.”
The platform, he says, offers a direct connect between the sellers and the buyer, reducing the margin of trade significantly. The price benefits are shared between the actual buyer and seller. The platform also allows a buyer to split large orders between two or more sellers.
Over the last three years, JK has built a 65-member team and a network of 2,800 verified sellers across 12 countries, including India, Myanmar, Thailand, Vietnam, Nigeria, Ukraine, Brazil, and Ethiopia. Tradologie claims to have facilitated 930 orders this year.
The birth of Tradologie
Hailing from a family involved in the steel industry, JK has 40 years of experience and knowledge of the inner workings of the commodity market and trading.
JK says that during these 40 years, he has seen a paradigm shift in the status and influence of the distribution channel and its participants - from a time where manufacturers used to set policy and dictate margins and prices of products to the present time where dealers, distributors, and traders have a major say. However, he felt that the industry and buyers were still on the losing side.
This led him to realise pain points such as the lack of a responsible platform for commodity transactions, transparency, and the fact that some platforms offered only listings and had no standardised procedure and product.
“And,” he says, “offline purchases involve a lot of middlemen and high cost margins.”
JK decided to explore how he could solve the problem. He roped in his daughter, Tanya; son Sahil (also the COO of the company), and daughter-in-law Anjali, and formed a company.
Their aim was singular: to create an alternate procurement and distribution solution incorporating the benefits of prevalent solutions but reducing the costs associated with them.
“After creating the technology, Tradologie launched in June 2016 with a focus on enabling trade of Basmati rice and steel semis, and proceeded on a seller on-boarding drive,” JK says.
The platform now caters to segments such as agri commodities, construction commodities, and industrial raw material.
An eye on quality
Speaking on how Tradologie ensures quality sellers and buyers, JK says the company has strict protocols for on-boarding them on the platform; only after these are met, are the buyers and sellers allowed to trade.
The founder says that each lead received by the company is vetted. The in-house team connects with potential buyers, explains the working of the platform, and takes relevant information about the company and requirements.
On the seller side, each seller’s office/facility is visited, and information about production capability, supply chain, and relevant personnel handling different aspects of the trade is taken. The team also verifies the seller’s KYC after which s/he can participate in live negotiations with buyers.
By verifying the sellers, Tradologie assures buyers of the authenticity of the seller’s facilities and offers in-depth information to help make an informed decision at the time of purchase. JK says the company takes a performance guarantee from both the buyer and the seller to ensure minimal post-order disputes.
Business model and competition
Like other B2B platforms, Tradologie provides listing and promotion services to sellers against a membership fee. The company also charges a commission from sellers for each successful transaction.
Buyers have to pay facilitation charges for support services such as sampling, third party inspection agencies, translation services, etc.
“Along with standard services, we also provide registered sellers bespoke digital marketing solutions along with representation at trade fairs across the world,” JK says.
JK says that Tradologie replicates current market practices and goes beyond what is offered by other B2B platforms such as Alibaba and Indiamart in terms of offering transaction-based services, 100 percent verified buyer leads, and reach within the commodity community.
In FY17, Tradologie registered GMV of Rs 26.91 crore; this figure jumped to Rs 239.53 crore in FY19.
“We are expecting to close FY20 at Rs 361.41 crore,” JK says. He adds that revenues have also soared from Rs 25 lakh in FY17 with 43 orders to Rs 377.5 lakh in FY19 with 932 orders.
The company has attracted buyers from more than 32 countries and crossed 44,000 registered buyers in October 2019.
“We expect to close the current financial year with a GMV of close to Rs 550 crore, which will amount to a growth of more than 125 percent on a year-on-year basis. We anticipate a GMV in excess of Rs 2,000 crore in the next financial year,” JK says.
In terms of profitability, the founder expects Tradologie to turn profitable within two years of the next round of funding.
Funding and future plans
JK says a total of $1 million has been invested in Tradologie. Going forward, the company wants to expand to new countries and create a global presence in the commodities trade.
Tradologie is looking to raise $15 million this to fuel its next growth cycle.
“The funds will be used to increase the reach of the platform in new geographies in India, create a wider seller base across the world by creating a physical presence in key trading hubs across Africa, Eastern Europe and the Middle East, and offering secure credit facilities to buyers,” JK says.
(Edited by Teja Lele Desai)