Synopsis–Tata Sons is marrying proven models of Chinese e-commerce player Alibaba and Internet firms such as Google and Zoho to build a marketplace for small and medium enterprises (SMEs) in India.
In an ambitious venture, Tata Sons Pvt. Ltd. is marrying the proven models of Chinese e-commerce player Alibaba Group Holding Ltd. and Internet firms such as Google and Zoho to build a marketplace for small and medium enterprises (SMEs) in India, offering digital tools and solutions to scale up their business.
The new entity, Tata Business Hub, is being led by veteran Tata Consultancy Services executive Venguswamy Ramaswamy, global head of TCS iON which offers cloud-based IT solutions as a service to small and medium -sized firms.
Tata Business Hub offers a suite of digital tools built by TCS in segments such as marketing and customer engagement to SMEs on its platform—nexarc—that will also have strategic tie-ups with banks and financial institutions to help SMEs raise funds for their business, people familiar with the development said.
“Several small companies are not able access credit or good technology or proper marketplaces to showcase their products,” one of them said. “This will be a platform to enable that.” Tata Business Hub held early talks with IndiaMart for a possible alliance, but it did not work out, officials close to the development said.
The entity is setting up a team of curated advisors to help small entrepreneurs to advise on challenges they face in their business and guide small businesses to seek aid from government schemes designed from the sector.
The platform has hired Aditi Puri Batra, former country manager of US software platform for small businesses Intuit, as its chief business officer and moved Bindiya Verman, former head of HR at CaratLane-Titan, as its chief human resources officer. It has also hired executives from digital startups such as Ola and Dailyhunt as it’s building mobile-first applications for businesses, sources said.
Ramaswamy said it was too early to comment on the company’s plans. Tata Sons declined to comment. The platform has begun enlisting small and medium enterprises across the country for free, promising them leads through its platform.
“It (nexarc) has to offer something beyond listing companies. It has to identify manufacturers with suppliers and do the matchmaking,” said Kuldeep Walujkar, director of Corros Metals Pvt. Ltd, a small enterprise in Pune that is listed on the platform through a Tata dealer. “India and China are different markets. Alibaba is a very different story. There is an equal amount of buyers in China. India has limited buyers and many suppliers. There should be proper matchmaking with support,” he said.
The platform has tools for generating invoices, bill collections, chat and video conferencing that has been built by TCS and hosted on the cloud. Some of these tools have a freemium option, where customers get access to a limited set of services and pay a premium for extra features, a proven model of most software companies to win customers.
Zoho, a homegrown software as a service provider, has similar tools that it sells to both global and Indian customers. Google offers its tools on a subscription basis for both small and large enterprises.
India’s SME sector is emerging as a sweet spot for many large technology platforms. Both Jio Platforms and Amazon are investing heavily to digitise small firms and get them to do business on their platforms. It is in line with the vision of the government to increase to 50% the contribution of MSMEs to India’s GDP. And that would require empowering these companies with enabling technology.
According to Indian Software Product Industry RoundTable (iSPIRT), India has more than 60 million SMEs, of which only a fourth have exposure to the country’s $1 trillion commercial lending banking system. The gap in lending to SMEs is between $250 million and $500 million with many SMEs not able to access capital for growth, iSPIRT said in a blog post on Saturday.
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