YarnBiz is a B2B e-commerce marketplace that connects yarn manufacturers and yarn buyers on an innovative technology platform. YarnBiz aims to provide a convenient means of buying and selling yarn which would benefit thousands of yarn manufacturers and buyers across the country.
Mr Sandeep Krishna, CEO, Bizmart Ventures Pvt Ltd, spoke with the Textile Value Chain during an exclusive interview.
Tell us about the concept of YarnBiz and also how it was started?
Everyone is aware of the change that e-commerce has brought globally and also in India. One of the things that has always come to the mind of the promoters of YarnBiz is that yarn manufacturing, or to that matter the whole textile value chain has become automated. If you see what is happening across, you see that the factories have become automated. When it comes to Trade, it is still done the way how it was done probably 100 years ago. The buyer and sellers get on call, this is the only advancement that they get on a call or do it over WhatsApp. Other than that, there is no such advancement.
What we realised is that to make one deal or one purchase takes between four hours to over one day as there is a lot of back-and-forth communication. There are a lot of things that you need to ascertain, including the quality, the buyers need to ensure that they are getting at the best price or that their money is not going down the drain and it is the same for the sellers, even they want the best buyers and best price for their products and that their payment should be done upfront. In all this process, a lot of time is wasted. So, we believe that it is the right time now for e-commerce to come in B2B or B2C and particularly in textiles. So, the major question is how to save time… Apart from the other challenges that exists in the offline trading, saving time is one of the most prominent issues.
The idea of YarnBiz came about to life by the founders this way: They have been in the yarn business for over 30 years now and Nimbark as a company has been into existence for 25 years. They know the intricacies and the details of the yarn manufacturing and yarn trade business. They obviously understand the shortcomings and the requirements. That is how they came up with this idea, they thought, if we bring about an e-commerce platform which saves both buyers and sellers time and services it would be beneficial to all.
You would be amazed to know that from 4hrs to few days, a transaction on our platform can be done in 6 minutes. Imagine the kind of time one would be saving if one were to come on an online platform. We estimated that to be 6 lakh man-days per year. This time can be otherwise used productively for developing the textile industry. Many country-building activities can happen in this time.
Secondly, in terms of challenges that are there, for both, the buyers and sellers, each have a different set of challenges. We have built a platform that solves these challenges. What does a buyer want? A buyer wants quality yarn, immediate delivery and that his money should get value. Whereas, a seller wants the payment to be upfront, choice of buyers etc. We are providing all these solutions on this platform. It is a very innovative platform where; one can buy yarn products from 2 tons to 200 tons.
Is the platform transaction-based or enquiry-based?
It is completely transaction-based. We allow the buyer to buy on the portal end-to-end. That is the major difference between us and the other portals that are there in the country today. We are like Amazon; you go, you select the product that you want to buy, you add it to the shopping cart, you make the payment and that’s it.
But the yarn payment goes into lakhs and crores… So how is it possible in e-commerce and is it safe?
Correct. When you compare it to B2C, everyone was thinking on the same lines for jewellery and real estate. Today, nearly 40% of the jewellery trade is done online. We have people who buy apartments online, which is such an important touch and feel aspect. People buy cars online. All this is worth lakhs and crores. But because of technology you are able to showcase them what you are offering from them to make a decision for buying. That is what we have done through our platform.
how do you make a yarn business…?
One, I need that yarn to be from a seller that I know or a reputed seller.
Two, I need to ensure that the quality of the yarn is as per my requirement.
Three, I need to ensure that there is transparency and the delivery happens on time.
What we have done on our platform, is that it is mandatory for every seller to have a test report of every product that he is selling. So, the test report gives you accurate parameters for the buyers to make a decision. All details of a particular product, including what kind of yarn is it, where it can be used i.e., can it be used in warp or in weft, all the other details are provided including the test report which gives you technical details about the quality of yarn. You look at these details, then you look at the seller and then make a buying decision. The fact that we have made a few deals already in a very short time is a testimony that this is possible and that is the change that the industry needs at this point of time, according to us.
What we are doing is that we are giving that confidence to the buyer, saying that I can make this purchase, I know that this platform is providing me with all the information that I need to make an informed decision. so, this information we are providing through technology, through our platform.
Transaction also happens on your platform?
Transaction also happens on our platform itself. Once, the buyer has decided, he can even compare multiple products on the platform. For example: There is a buyer who requires 30 single viscose yarns. He can compare multiple sellers who are selling the same product. So, I select the three best sellers and then compare it. This comparison will further give me an idea, which product is the cheapest, price-wise. It will also give me a quantity comparison, who has the right quantity that I need, as there is a ready inventory these days. It will give me a quality comparison, who’s is the right quality that suits me. Using this, I can make a buying decision, the buyer can then add the products to the shopping cart accordingly, directly and then make a payment there itself. Once, he has added his product to the shopping cart, a paying link goes to the buyer, it goes via email, via SMS and also on his buyer account on the portal, that payment link is available. He has a two-hour window to make the payment, so he can actually arrange for the funds. He can make the payment through that. It is a secured payment gateway, so nothing will happen to the money, there is no chance of misuse. Once his job is done, he just needs to track where his shipment is, that’s all!
We have tie-ups with multiple logistics providers. Our logistics partner will pick-up from the manufacturer and then deliver to the doorstep of the buyer. So, it’s a door-to-door concept.
Are there separate charges for this?
The charges will obviously be separate to the buyer. If he were to arrange for his own transport for sourcing the product, here he pays us these charges for those logistics. Just to make it more convenient for the buyer, we have given an option of self-ship as well. Let’s say that he looks at my logistics charges and thinks that it is expensive, he has his own logistics guy who will get it done for a much cheaper rate, we have given this option that you can select self-ship and arrange his own transport. So that way it is very convenient. Once the payment is made, the seller comes to know that there is an order, so the duty of the platform is that it is completely transparent. We are not buying the yarn and adding the mark-up and then selling it. Buyer will get the invoice from the seller; he will get the product at the price he has seen and the price he has brought.
How do you get the revenue the?
SO, the business model is: we charge a nominal platform commission from the seller and we charge a convenience fee from the buyer, which is again very nominal. If you have made a booking on MakeMyTrip or any other platform, they charge a convenience fee. Here, it is Rs 400, introductory offer at this point of time, for any amount of yarn. It is the same for one lakh rupees transaction and even for one crore rupee transaction. These charges are per transaction. There is no transaction fee, this is the beauty of our platform. Its absolutely free.
It is Rs 400 for the buyer and for the seller it is 0.5% of the transaction value. It’s a platform commission, like they charge on Amazon. But, here its very nominal, typically the sellers are used to paying 1.5 to 2% to traders to get them the deal. Our task for the sellers is to pass on some part of these savings to the buyer. Give the pricing on our platform in such a way that it is really competitive, so that the buyers can also come and they can be really happy. In this way, YarnBiz will set a benchmark, if you want the lowest price of yarn go to YarnBiz, that is our objective. Once we build in this confidence in our buyers, at least our first objective is achieved.
The market is ever-changing. The prices of materials change on an hourly basis. How do you manage that?
What we do is once the products are uploaded, again technology is helping us, we have something called as quick update, which is something given to the seller. Quick Update is just change in price and quantity. We allow for the seller to change the price only once in a calendar day. So, the buyer knows that the price which he seeing is a definitive price, it wont change again and again.
But since the prices are changing, if the buyer gets it at a cheaper rate offline, he will buy it offline then…
Right now, yes, he might. At a later date, when he has that confidence, that these guys are delivering on time, their service is up to the mark, he will come back to us and say, that I am getting it a bit cheaper in offline, so why don’t you guys check it out. So, we can make those changes then. We want to achieve this stage that this becomes a trusted platform, we want to become a go-to platform as far as yarn is concerned. However, we do not want to limit ourselves to yarn only. We want to do it for the whole textile value chain. There is fabric after yarn and there is backward integration possibility with fibre, many possibilities are there. We have started through yarn because we have an experience of 30 years in this sector through Nimbark. That is our stronghold and our bread and butter. We have started in the middle of the value chain, but there is a possibility to go either way, from capitalising on that.
How successful is your venture, considering competitors like Yarn Bazar?
That is what I said. Most of the people in the market currently, do not have e-commerce on their platform to carry out the transactions end-to-end, like we do. We believe that now is the right time. I have spent 20 years in the e-commerce and technology companies, so I have seen the B2C transformation as well. There is always a right time or it is always slightly early to do anything. We believe that now is the right time for e-commerce B2B to happen the way we are proposing. Most of the textile companies have the next generation that are taking the charge, and the next generation does not want to waste time on a transaction. They don’t want to spend time in negotiating, they have better things to do. They want something that is quick, easy and that is online, right? so, we are right on time. The next understands us much, we are a next generation company.
What is the future of YarnBiz?
I think its potential is phenomenal. We have an entire value chain where we can expand and grow into. We have more than 100 sellers and 500 buyers registered with us already, within one month of our launch. Our country roughly has around 5000 sellers/ manufacturers and 50,000 buyers approximately, so, the potential is huge! Our next step is to capture the entire nation, to get everyone on the platform. When everyone comes on the platform, the product variety is immense, people get what they want to buy, their number also becomes substantial. The number is a large one and we want to capture this huge market. The Indian textile market is huge, the yarn market is in itself very huge! Even if are able to capture around 2% of this market, it is still sizeable. No one has done it the way we are doing it and therefore, there is a very large potential to this.
The sellers on your platform, who are they? Are they manufacturers or traders?
We are promoting manufacturers on our platform. This mainly because we want maximum number of manufacturers to come on board, business will evolve over time. Right now, if there is a trader, we allow him to be a buyer. But this will change, its not a hardcore policy, because at the end of the day, we want the entire community to benefit from this platform. If there is a trader community and we are able to help them, we will be glad, let them also benefit from our platform and use our technology. Our way of operation will keep on changing depending on what the community wants or what is the need of the hour. We get many feedbacks from our users. One of the feedbacks that came in, when I had joined was, a question: ‘can you do something as simple as WhatsApp?’ they said that there are many apps, how many apps will one person download, then we have to login and keep using it. So, we took this feedback and now we are working on WhatsApp model, wherein the yarn buyers can buy on WhatsApp and the yarn sellers can change the prices on WhatsApp itself.
You had asked earlier that it will be inconvenient for them to keep on changing the prices, but now they can change it on WhatsApp itself. Very soon, in about a month’s time we will be out with our new WhatsApp thing. It is currently in progress, with a lot of work being done already. We believe this will make it even easier for both the buyers and sellers. So, that’s the whole vision. Using technology makes the lives of textile buyers and sellers easier, that I think is the underlying theme of YarnBiz. That is why the textile community as a whole will benefit from this.
How is your relationship with Nimbark, is it competitive?
We are very clear between Nimbark and us. Nimbark is a promoter and investor in the company. Other than that, our company, which is BizMart Ventures Pvt Ltd. and the YarnBiz brand under BizMart is run independently. That is why they have brought me as a CEO of the company. I have more than 20 years of experience in e-commerce, digital companies, managing and running them and my mandate is to set this up as a tech start-up, we consider ourselves as a tech start-up. We go back to Nimbark only for their knowledge and experience in yarn, other than that there is no interference, even the management policy decisions and everything else is managed independently. We have an arm’s length relationship when it comes to Nimbark. That has been clear right from day one. So, its neither competing nor conflicting when it comes to this model, that we have ensured. Nimbark has been in the business for 30 years, apart from the profits they have gained enormous respect and knowledge from the textile industry, so, the whole idea was, why don’t we do something to give back to the textile industry. They feel that YarnBiz is a way of helping the industry that has given them everything, it’s a way of showing gratitude to the industry.