The founders of OfficeYes.com are making a bet in the office supplies segment through its e-commerce offering, making it among the first B2B e-commerce brands in the country
You think office stationery and supplies and you’re not automatically thinking it is a possible Rs. 50,000 crore market (estimate from different market sources) in India. This is also a space that is ruled almost entirely by small, local vendors. Sensing the opportunity to run an organised business in this space, Siddharth Nambiar and Arvind Sivdas set up OfficeYes.com as a one-stop source for a range of office supplies. The duo, with backgrounds in management consulting, established Gurgaon-based OfficeYes as a business-to-business (B2B) portal in 2012. Explains Siddharth Nambiar, MD and co-founder, OfficeYes, “It was a question of market opportunity and also a belief that Indian businesses deserved a better service in this area.”
The founders point out that while e-commerce has taken off in the business to consumer (B2C) segment in India, there are no large e-commerce companies focusing on businesses. In the U.S., B2B e-commerce dwarfs B2C, almost by a factor of 10 ($3.7 Tn vis-a-vis $400 Bn – 2012 US Dept. of Commerce Report). “This is a macro trend, which is only starting to hit India – the big wave is still to come. In just one year of operation, our annualised revenue currently stands at Rs 20 crore and we are expecting it to hit Rs 60 crore by the end of year,” says an upbeat Nambiar.
Sivdas, MD and co-founder, has experience running startups before and worked for four years in consulting while Nambiar consulted for investment banks in London and also helped build up the London office of his previous company, gaining experience to build a high-performing team.
The company received an initial round of funding (actual amount undisclosed, but in the range of US $2 million to $5 million) from Berlin-based Rocket Internet and in just over a year, it has reached a staff size of 120. Currently, OfficeYes has over approximately 3,000 business customers including GE and HCL and has close to 7,000 kinds of products in its catalogue.
OfficeYes has a revenue growth of 100 per cent month-on-month, for its first nine months. Its goal for the future is to capture a significant portion of the huge market for office supplies and to become India’s first big B2B e-commerce brand.
The biggest challenge the company faced was in defining its marketing strategy and understanding how to reach its target customers – the professionals in charge of administration in large companies. “In addition, recruiting the right team was something we invested a lot of time in at the outset,” says Nambiar. While the senior management at OfficeYes comprises those with MBAs from the IIMs across India, it also hires from across the stationery and supplies industry. “So I would say our big strength is this combination of business talent with industry expertise,” he adds.
Being a heavily technology focused company as most part of the order-to-order processing happens online, there is an internal team that constantly optimises the website and corporate ordering platform (corporate microsite).
OfficeYes uses both online sales and direct corporate sales to acquire customers. It also focuses on acquiring high-potential accounts. All leads (online and otherwise are passed on to the corporate sales team, who meet the clients, introduce them to OfficeYes’ microsite feature and explain the process of placing orders.
As for marketing, it makes extensive use of social media to spread the word but its pricing strategy makes the most difference. The company sells several products below MRP (some priced 20 per cent to 30 per cent lower than MRPs) to incentivise bulk ordering. “As the volumes increase, we can bargain for better prices which we in turn pass on to our customers,” points out Sivdas.
But while many of the prices are below MRP, lower pricing is not the company’s core strategy. Explains Sivdas, “We have a number of key differentiators that set us apart from the local vendors who are our competition: Firstly, we are a one-stop-shop, where companies can source all of their office requirements.” Secondly, the company is very technology-driven and the corporate customers get access to a technology platform to manage their order and review their account information, order data, via its microsite. Thirdly, its work culture is very professional – with high standards of customer service and a dedicated team to handle queries.
The first step is to build up the inventory of a core list of stationery and housekeeping items typically needed for offices. Next, these items are procured and stocked. All items are rigorously checked when they arrive at the warehouses. On the rare occasion there is a defect after delivery, there are certain steps to establish validity, depending on the nature of the product.
“While we deliver pan-India, most of our demand comes from the large metros, as that is where the large businesses are,” explains Sivdas. The company operates five warehouses across India and for orders outside these cities, it has partnered with a number of service providers including Fedex and Professional couriers for delivery. “Efficient warehousing and operations are hugely important, and this is an area we are constantly striving to optimise to lower costs,” he adds. Depending on availability, the company assures delivery within three to four days from the time the order is placed.
It has partnered with several stationery and office supply brands – including Apple, Samsung, Nokia, Canon, Casio, HP and Sony for technology products; Geeken and Royal Koas for furniture; Bilt, 3M and Cello for stationery; Parker, Cross and Faber Castell for pens and corporate gifts, among others.
Eyeing the future
OfficeYes has a revenue growth of 100 percent month-on-month, for its first nine months. Its goal for the future is to fully capture a significant portion of this huge market and to become India’s first big B2B e-commerce brand. “To do this, we will continue to invest in technology that makes it easier for more and more Indian businesses to switch to online procurement,” says Nambiar. “Product lines and locations will expand to some extent, but the big focus will be on delivering better and better technology (improve the microsite to make ordering and analysis easier) and working to expand our reach,” adds Sivdas as the two founders sign off.
Founders: Siddharth Nambiar, Arvind Sivdas
Funded by: Rocket Internet
Core: Office Supplies and Stationery
Concept in brief:
Office supplies are critical for corporate houses, educational institutions as well as homes, and the supply side is dominated by small players. Siddharth Nambiar and Arvind Sivdas saw tremendous potential in this space and founded OfficeYes.com, a one-stop B2B portal. Currently, the portal sells over 7,000 products and has a customer base of close to 3,000 businesses. With a strong focus on technology, OfficeYes’ microsite, that allows customers to place their own orders, is one of its salient features.
With funding from Rocket Internet, the company has registered an annualised revenue of Rs. 20 crore and expects to touch Rs 60 crore by the end of the year.