These MBA graduates quit their jobs to build a Rs 7.9 Cr B2B marketplace for granite exports
Artwork and handicrafts were a big part of Vickram Singh’s life in Bera, a village in Rajasthan famous for its leopards and panthers. Growing up, he admired the skill local households put into making handcrafts.
It took some years for him to notice the villagers who made handicrafts were not benefitting from sales. Profits largely went to traders and other middlemen who the villagers relied on to take the products to market.
“Looking at this situation, I understood that the problem existed in several other parts of the country. I saw a potential opportunity for creating an international B2B marketplace -one where small-time manufacturers, factory owners, and MSMEs could sell globally without going through middlemen,” Vickram, who is an MBA graduate from Christ University in Bengaluru, says.
Vickram went on to work in a range of corporate and startup roles before he quit his job and took the entrepreneurial plunge. Ramesh Rao, a banking expert and also an MBA graduate from Rajasthan, joined Vickram in taking the leap. In 2016, the duo started RV Enterprises in Bengaluru with their savings of Rs 25 lakh.
Vickram and Ramesh decided to test the idea by piloting one material: granite.
India is a major exporter of granite, and RV Enterprises capitalised on this and brought the business online. The company built a website which organises and makes transparent the details of the granite products and suppliers.
They sourced granite from suppliers based in local quarries, processed it into slabs and blocks, and exported them.
“I wanted to take it one step at a time to get a realistic picture of how the B2B marketplace would work. I wanted to later apply this concept for a multi-category B2B marketplace that would include artwork and handicrafts,” Vickram says.
The granite business alone fetches RV Enterprises a turnover of Rs 7.9 crore, Vickram says.
In an exclusive interaction with SMBStory, Vickram reveals how he built this successful small business and how he is also building a wider B2B marketplace:
Edited excerpts from the interview:
SMBStory (SMBS): What did you find through your initial research on the business idea?
Vickram Singh (VS): When I initially started to work on this idea, it took me six months to do my research and understand the international market. We met a lot of small business owners, who made different products, to understand the problems they faced.
We also spoke to potential international clients to understand their pain points in the business. We saw they faced issues with trust, quality, and pricing of local products. We thus understood a well-organised and transparent web portal could resolve these challenges.
SMBS: What went into building the online portal?
VS: It was not an easy job as we had to build a marketplace where international buyers would make purchases from MSME suppliers without physical assessment of the products. To make up for this, we built a virtual marketplace to showcase the products, priced them affordably, and gave buyers assurances of quality. We also worked with clients on an individual basis to understand their unique requirements.
By doing so, we created a medium or channel where a supplier from an economically-weaker sector could sell internationally. But at the same time, we understood that local manufacturers had to be trained to sell on the marketplace and also to build and sustain their reputations,
SMBS: How did the pilot with granite help?
VS: We chose granite because small-time granite businesses were in bad shape. Most had no idea of the worth of their granite. They used to sell to local suppliers and dealers at cheap rates and get paid half of what the granite was worth. They were not able to eliminate these middlemen from the supply chain because they lacked the knowledge, resources, funds, client base, and the training to do so.
We helped them understand how traditional middlemen could be removed if an online marketplace was used to sell their granite. We showed them how their profits, work, skills, and production capacities could increase.
SMBS: How does RV Enterprises make revenue?
VS: We don’t charge the MSMEs, sellers, and factory owners; we stay away from touching their profits. We take nominal service charges from buyers and clients. This helps the MSMEs understand that we are there to help. We have already onboarded around 150 suppliers and they currently sell via our platform.
Our first revenue took a long time to come in. We were targetting revenue from international clients and couldn’t just walk into a meeting and ask for a deal. So it took us five months of meetings and follow-ups to land the first order. It was from a client in Egypt. Then, we got one in Vietnam, and slowly expanded our network.
SMBS: What are the toughest moments the company faced?
VS: We lost an important client who was with us since the early days. It happened because we didn’t learn enough about his requirements. Rather, we tried to push and sell what we already had. We approached him to understand the issue, and found out that he was looking for a custom order.
We learned a lesson after we lost this client, and we started focussing on improvising and customising our offerings. We didn’t want to solely focus on completing orders; we wanted to be innovative and run a customer-focussed platform.
SMBS: Who are your competitors and how are you staying ahead of them?
VS: We don’t see much competition in the same line of service. There are a few international players in this domain who have built a marketplace out of directories and information on the sector. They provide leaders but don’t fulfill the orders. There are also some local players who are following such a model.
We stay ahead because we not only bridge the knowledge gap but also facilitate end-to-end trade for MSMEs and their clients. We provide our sellers with access to a wide trade network of international clients. We also emphasise on the ease and comfort of trade, which is essential because there is no option for a buyer and supplier to meet face-to-face.
SMBS: What are the future plans for the company?
VS: We call the granite business phase 1, and we have phases 2 and 3 lined up in 2020. These phases will see all kinds of handicrafts, artwork, dry fruits and other MSME products be sold on a multi-category website which we are building. This means we are looking to onboard more MSMEs and help them compete in global markets. We are also looking for buyers from various countries, and there will be a strong focus on client retention.
Next, we are planning a separate model to connect local suppliers with international projects. We are also planning to organise subscription-based virtual exhibitions for local suppliers to participate in and give discounted prices to buyers. We also plan to grow consistently through increasing the size of our global trade network.