It’s been a rough couple of years for IndiaMart InterMesh but Dinesh Agarwal is betting things will look up. The CEO of the country’s biggest B2B portal, which caters to small enterprises, is hopeful the pace of customer additions will perk up. Since June, 2023 just about 2,000-3,000 customers have been added every quarter compared with about 5,000 a quarter before that. Moreover, right now, the churn among suppliers, especially those that are on what’s called the silver plan, is worrying having gone up to 7-8% since Q1FY24 from 4-5% pre-pandemic. That needs to reduce. Else, the steady fall in collections in the past six quarters, which decelerated to 5% year-on-year in Q2FY25, will be hard to reverse.
Agarwal admits there is a problem. He concedes, there has been some lack of focus on client servicing and also in identifying the right suppliers. Many of those who were on-boarded onto the platform were micro units and simply didn’t have the wherewithal to supply the goods that were ordered.
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Experts say leads were sent in random fashion to a dozen suppliers at a time which meant the conversion levels for many were low. This was especially true for the silver category of suppliers. Although they pay just Rs 28,000 annually—much lower than Rs 45,000 that is charged for gold plans— and bring in just a fourth of the company’s total revenues, they’re important channel for the future.
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The high churn in customers, experts believe, could be more of a “product issue” and less a sales problem. The leads sent out to the silver category customers are limited resulting in a low return on investment and more churn.
Shobhit Singhal at Anand Rathi Securities feels that the onboarding of suppliers needs to be more focused. “Dedicated teams should impart proper knowledge about the platform, the various features, options available and steps to improve visibility,” he says. Moreover, to reduce competition, a single lead should be given to fewer suppliers, say 5-6 rather than 9-10 suppliers,
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