B2B ecommerce platform SOLV helps MSMEs digitise supply chains and grow sustainably
An expert in commercial banking and SME platforms, Jiten Arora is a firm believer in India’s small business ecosystem. He believes that simplifying growth for ambitious entrepreneurs and MSMEs in emerging markets is one of the most pressing challenges that financial institutions can help to tackle.
Earlier this month, Jiten, who is Global Head for SME Platforms, SC Ventures (a business unit of Standard Chartered) and Venture Lead, SOLV, oversaw the commercial launch of SOLV – a full-stack B2B ecommerce platform for MSMEs to improve supply chain efficiency for sustainable growth.
“If an MSME cannot expand its ecosystem of buyers, sellers and suppliers to do business with, it is going to be limited in size and scale. Because of COVID-19, there is more receptivity to digital solutions like SOLV. The platform has the potential to positively impact millions of local MSMEs by helping them achieve sustainable growth,’ he says.
As the Indian market moves towards being data-rich, SOLV is plugging into these data sources and building simple and intuitive technology-led commerce and financial services solutions for MSMEs. Jiten believes these can help solve problems across customer onboarding, alternative credit scoring and underwriting, digitising operations, and improving the efficiency of supply chains.
In an interview with SMBStory, Jiten takes a deep dive into SOLV, describes how SC Ventures built the platform, and explains how MSMEs can use it.
Edited excerpts from the interview:
SMBStory [SMBS]: What is SC Ventures' scope of work in India? What is its focus on MSMEs?
Jiten Arora [JA]: SC Ventures, launched in 2018, is a business unit and a catalyst for Standard Chartered to promote innovation, invest in disruptive financial technology, and explore alternative business models.
In India, SOLV is SC Ventures’ debut venture that focusses on Indian MSME’s growth by helping them digitise their traditional supply chains, and giving them access to affordable finance and customised business services.
Our goal is to enable small businesses, especially those operating in the informal sector, to leverage technology and data to find newer avenues of growth in a trusted environment, and build their digital presence and credibility.
Beyond India, we aim to roll out SOLV in Kenya, Ghana, and other markets.
SMBS: Why did you start building a B2B marketplace for MSMEs?
JA: MSMEs are India’s backbone – accounting for nearly 30 percent of GDP, 40 percent of the workforce, and 40 percent of the exports. The MSME sector is growing at approximately 10 percent YoY, however, despite rapid advances in technology across various sectors of the economy, this sector has not been able to harness technology for growth.
A snapshot of the SOLV app
Over 80 percent of the MSME sector functions in the unorganised segment, with zero digital traceability of business operations. As a result, the gap in India’s MSME financing is huge, with only four percent of MSMEs availing formal financing channels.
We believe that digitising traditional supply chains will lead to the opening of newer markets for growth in overall commerce transactions between small businesses. It will also be an important turning point in bringing this segment into the formal economy, thereby helping them get access to affordable growth and working capital.
SMBS: How was SOLV built? How has blockchain, artificial intelligence, and machine learning been incorporated in building the platform?
JA: We saw that every MSME needs three important things to grow sustainably: a strong network, access to finance and simplified business support functions. Through SOLV, our aim is to create a platform which will help businesses fulfil all these needs by the use of technology and data.
The SOLV platform, while being powered by AI/ML and blockchain, is intuitive and simple. We designed it keeping an average small business user in mind. The platform’s features enable all the key characteristics of offline B2B transactions on a digital scale – from search and discovery, referrals and negotiations, to ordering and fulfilment.
SOLV is an open marketplace where trust plays an important role. Multiple buyers, and service providers like financiers, logistics and other business service providers, come together to transact with each other on SOLV.
Technologies like blockchain and AI/ML help strengthen the digital trust ecosystem and automate several critical workflows. We see the strongest use case of AI/ML in building the SOLV Score where we leverage the IndiaStack and triangulate publicly available data to create an alternate credit score – the SOLV Score.
This score helps financial institutions make credit decisions for the small business segment. Some other notable use cases lie in matchmaking of MSMEs with the right financial services provider and powering the commerce platform’s recommendation engine.
SMBS: How long did you test SOLV for before commercial launch? What insights did the beta phase reveal?
JA: We were in beta for about nine months before our soft launch in September this year. The beta testing phase revealed MSMEs are delighted to now have options in the full-stack B2B marketplace platform space in India. We also saw that their need to operate in a trusted environment with verified buyers and sellers is strong.
The testing also showed MSMEs appreciate the convenience of end-to-end order management including logistics, personalised professional services (which is unlike their traditional offline supply chain experience), as well as quick and convenient payment options.
More importantly, we saw their preference for tech-enabled convenience of buying and selling from anywhere and having a digital record for better inventory management.
SMBS: What is it like working with MSMEs? What are the difficulties you face working in this sector?
JA: The MSME sector has traditionally been a trust-driven segment with businesses trusting peers, suppliers and buyers only in their vicinity or through first degree connections. SOLV is helping digitise not only their existing networks but are also connecting them to other verified digital networks of small businesses across the country.
We are also able to build a strong, trust-based relationship with the network of small businesses on the platform. In fact, the word-of-mouth has helped us scale significantly in the last few months after the lockdowns started.
There still exist challenges such as effectively reaching micro and small businesses digitally and enabling unassisted transactions, establishing a new entity’s brand identity, and customising finance programmes for the segment for new customers. But we believe these challenges will be addressed as we scale.
SMBS: What are the steps to join the platform? How accessible, mobile-friendly, and easy-to-use is it?
JA: When we started SOLV, we knew we wanted to make it comprehensive yet keep it simple and intuitive. We ensured the features could be accessed in just a few clicks and that the platform can run on a basic smartphone. It doesn’t need a high-powered desktop to run.
Small businesses can download the SOLV app from Google Play Store and complete a quick two-minute onboarding, with phone number verification and KYC process completion. It’s recommended for the small businesses to have their GST or PAN or one proof of business establishment handy.
Post verification, they can start browsing products and connecting with a wide range of sellers and negotiate rates, terms, quantity etc on chat, generate a smart invoice for their purchase, and finally, track their goods for delivery – all on SOLV’s mobile app.
We also have a team with feet on the street to handhold MSMEs, guide them to go digital and onboard with SOLV.
Jiten Arora, Venture Lead, SOLV, and Global Head for SME Platforms, SC Ventures
SMBS: How different is SOLV from other B2B marketplaces and why should MSMEs use SOLV?
JA: SOLV is a zero inventory, full-stack, pureplay marketplace by virtue of which we don’t disrupt traditional supply chains. Rather, we enable them to be better connected and harness the power of having a full-fledged ecommerce platform.
SOLV aims to be the largest digital trading ground for India’s manufacturers, wholesalers, and retailers. It enables MSMEs with a comprehensive one-stop platform addressing their growth pains and helping them expand faster.
SOLV is helping 15,000+ verified small businesses and several leading FMCG manufacturers, restaurant chains, and non-governmental organisations achieve deeper penetration in middle India through our network of small retailers and source quality products.
Our extensive open network of more than 20 financial service providers enable on-demand invoice and growth capital financing, and a well-integrated supply chain finance programme to support small businesses in their growth journey.
SMBS: How did COVID-19 impact SOLV?
JA: COVID-19 has disrupted traditional supply chains and significantly contributed to shifting B2B buying and selling behaviour to digital channels. We have been helping to keep supply chains operational by making use of our network of small businesses on the platform to connect to new buyers and suppliers.
In maintaining the flow of essential goods, SOLV has more than doubled the revenue of many small businesses on its platform, with over 300 percent growth in the value of goods traded over the last quarter and is now supplying over 250 tonnes of goods to small businesses every day.