How this textiles industry B2B platform seamlessly stitched together demand and supply to grow 3x in the pandemic
The Indian textile tradition is one of the oldest in the world. Beautiful fabrics from the region are popular worldwide, providing a uniqueness to India’s culture and heritage. However, the reality behind the industry is not so smooth as the market suffers from a highly unorganised and fragmented way of working. In addition, the presence of several middlemen in the value chain also makes it difficult for a buyer to get a fair price.
However, change is on the horizon. There are now numerous business-to-business (B2B) platforms in the country - IndiaMart, Yarn Bazaar, Fashioniza, and more, are digitising and streamlining this industry.
Adding another name to this list is Delhi-based Sowtex Network, a B2B sourcing platform for textile buyers and sellers, founded by Sonil Jain, who SMBStory spoke to this week.
Sowtex offers 46 categories of items on its platform including fabrics, motifs, laces, badges, apparel machines, testing equipment, neck patches, buttons, threads, interlinings, yarns, zippers, and much more.
Even though the company is yet to report a breakthrough in terms of revenue numbers, it claims to have facilitated business worth Rs 20 crore since its inception in 2017.
Digitising the textiles industry
After working as a banker in Australia, Sonil Jain returned to India in the year 2000, and joined his family business of textiles soon after. Working in the family business as well as launching his own fashion label in 2006 gave Sonil enough exposure into the workings of the industry. One challenge that he constantly faced was finding or discovering the right sources for raw materials as well as other products needed in this industry.
“This gap was constant and at one point, I felt that it could never be fulfilled,” recalls Sonil. This thought turned out to be a turning point in Sonil’s journey as he realised that he needs to take the reins.
In 2017, Sonil launched Sowtex as an online platform where buyers and sellers belonging to fashion and textile industries could gather together and engage according to their requirements.
Sonil claims the first 1000 merchants came on the platform within the first six months of the launch of the business.
Sowtex’s growth story
Until a few years ago, and probably even now, it is largely unfathomable that two people can join hands to start a business without meeting each other even once.
But, thanks to digitisation, this is increasingly becoming a reality.
Sonil, however, admits that the initial years were not easy, and one of the main challenges initially was convincing people to get on board the platform.
“I would often tell people that if Amazon can sell so many things online then why can’t the B2B community go online?”
But, what worked enormously for Sowtex is maintaining visibility and transparency. “We constantly engage with the users to understand their set of requirements,” he says, adding, “We give out detailed information regarding pricing, delivery time and more to the buyer.” When a deal closes, Sowtex makes it a point to circle back to the buyer to understand if his requirements are fulfilled. This feedback also gives an understanding of the seriousness of the seller, and helps in verifying him for future closures.
Apart from providing ready stock, another key element in Sowtex’s business model is stock liquidation. “The biggest challenge for a manufacturer is dealing with the stock it ends up accumulating at the end of a particular season. Since they have limited resources, it makes it difficult for them to find buyers within their immediate reach.”
To solve this, Sowtex has built a stock library especially for this purpose, and such that it helps manufacturers upload and list their stocks. The buyers can use filters according to design, colour, etc, and buy these stocks as per their requirements. This platform transcends geographies, clusters and other barriers, and is a win-win for both entities, says Sonil.
The intention behind starting Sowtex was to bring the industry closer and eliminate the role of middlemen, which it has largely accomplished. The seller gets a good price for his produce whereas the buyer can get a price which is 5 to 25 percent cheaper, Sonil claims.
Sowtex’s revenue model is multi-layered, and it works on an annual subscription basis. “We invite users to join the platform on a trial basis, and offer a host of services. Once the services start getting converted into sizable closures or deals, we encourage them to become an active user,” Sonil explains.
The company also charges a transaction fee between 2 - 5 percent from the supplier for every closure that takes place. Sowtex also has money coming in from organising tailored webinars and training programmes for the textile and fashion community.
Sowtex deals with the international supplier community as well, with suppliers from Bangladesh, Sri Lanka, Indonesia, Korea, and more also on the platform. Recently, it also joined hands with US-based Tukatech to provide 3D technology- based solutions. Additionally, it also launched a virtual Sowtex Design Lab which will provide ready-made fabric designs along with other details.
The way ahead
It is a well-known fact that COVID-19 has accelerated the pace of digitisation in this country, and has also given this industry a chance to revive, survive and thrive using digital tools.
Sonil reaffirms this by saying that the pandemic has only helped enormously in boosting the business. From 5000 users before the pandemic, Sowtex today has a reach of more than 14,500 active users (in total since its inception), which it plans to scale up to 1 lakh active users in the next 12-18 months.
In terms of category expansion, Sonil feels the company is serving its customers well with the current 46 product lines. “Should the need arise, we will ensure to introduce more product listings,” he adds.
In the future, Sowtex is focused on creating more digital opportunities to help the community connect better. He concludes by saying,
“We want to create an ecosystem where people do not have to move around looking for supplier or buyer connections. Everything should be available at one place.”
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Edited by Anju Narayanan