Case 3: Indias Alibaba- IndiaMarts Network Effects

Submitted By: Sourav Halder|| EPGP-11-114 || Section-A|| IIM-K

1.Analyze IndiaMART as a market and assess its stakeholders:

IndiaMart established as a key player for the SME B2B market. As a early entrant, It has advantage of
connecting with small, medium enterprises with niche capabilities of understanding Indian suppliers needs
and customers and cultures.
IndiaMart is playing a catalyst role between suppliers and customers creating a easy access platform with
web presence, Authentication, validating the supplier and rating the supplier.

Stakeholders of IndiaMart:

- Suppliers
- Customers
- Management
- Employees of IndiaMart
- Government

Above are few stakeholders. IndiaMart market is focused in India only, though they tried other markets due
to lack of local knowledge they could not able to succeed in the market.
Strong hold of local knowledge and understanding is the USP for IndiaMart. They expanded their network
from one office to 100+ cities.
Still there is huge scope to expand the market as there is lot of scope untapped through internet. The internet
penetrating is around 10-20% if B2B market in SME.
Following exhibit showcase how the IndiaMart has grown.

2. Assess IndiaMART as a multi-sided platform with network effects. What are the
implications of competing in network markets?

IndiaMart as a platform for SME’s to interact with domestic and global customers. The market demands the
multi-sided platform, as the information is dynamic and unique, it need interactions between the supplier and
customer.
With Technology advantage IndiaMart will be the facilitator and the information, Interaction and networking
should be dynamic to collaborate with business partnership.

IndiaMart emerged as a Eco-system for SME B2B market. As a service Provider it has to keep upgrading the
technology, network and interactions.
Once, the system get established, the role of facilitator will be nominal so to keep the dynamics of
interactions, user interface, excellence in delivery, creating various forums , generating about the buzz about
product reviews, supplier reviews, comments and responsiveness to such reviews make the indiamart to
stand out from the competing markets.

3. Discuss IndiaMART as a technological and economic platform by considering its

technological limitations and potential, enablers of economic activity and unique
environmental contingencies.

IndiaMart enables the following technological platforms for the business of SME B2B clients:

- Webhosting
- Buy-leads online
- Mobile App which enables to use services on the go
- Free listing, which enables a global presence on the internet
- Analytics to understand the requirements and suppliers
- Dedicated E-commerce portal for B2B market Tolexo.com
- Maximizer feature for premium customers
- Digital form of tenders and RFP/RFQ
- Supplier ranking system
- Responsiveness ranking system

The network IndiaMart has established over the years is great and difficult for competitor to enter the
market. The techonology advantage it has adapted constantly making the company to be unique.

4. Suggest ways to valuate IndiaMART Discuss recommendations to improve the

valuation.

Valuation method:
- As a Industry practice the valuation can be 4 /5 times of topline.
- Discounted Cash Flow Analysis can be used to Value IndiaMart
- Similar companies Valuation as a Benchmark in the same Industry
- Traffic Valuation
- Customer Based Valuation

IndiaMart has been valued as one of the most innovating internet based company.
- Indias largest online b2b platform
- Second largest after Alibaba
- The valuation of Board also played a critical role of the company by inducting various business
leaders on the board.
- One of its kind company which has survived from Dot com bubble
- The company’s revenues kept on growing with promising future.
- The operational loss need to be fixed to gain more valuation.The company may adopt Artifical
Intelligence, 6Sigma policy to overcome its loss.