JSW Group plans to invest ₹4,000 crore over the next five years in its e-commerce platform — JSW One Platforms — to create a business model like Amazon for the building material industry and tap the growing demand from micro, small and medium enterprises (MSMEs).
Spear-headed by JSW Group scion Parth Jindal, the JSW One Platforms — started 14 months ago — has already crossed registering GMV (gross merchandises value) of ₹1,000 crore and is expected to become a ₹3,000-crore GMV company by the end of this fiscal and $1 billion by FY24. The platform sells steel, cement and paints produced by the Group companies and on-boarded products of other companies to provide a one-stop solution in the building material space.
$20-b GMV by FY32
The online platform, which plans to go pan-India in two years, has set a target to generate 20 per cent of Group’s revenue and hit the market to raise fresh capital in FY24. It has registered over 7,000 MSME customers and targets 5 lakh customers by FY27. The JSW One Homes has over 100 active customers and targets 2,000 by FY27.
Parth Jindal, Director, JSW One, told BusinessLine that the technology platform has attracted transaction of over 1,000 customers and is growing at 20 per cent month-on-month. “We are targeting to achieve a GMV of $20 billion by FY32. Of this, 65 per cent will be from the Group’s products and 35 per cent from non-JSW. In value, the 65 per cent GMV will add up to $13 billion and account for 20 per cent of JSW turnover in steel, cement and paint,” he said.
Expanding services
The platform expects about 50 per cent of the sales from new customers with whom JSW did not have access. For instance, he said the transaction value for steel on the platform is ₹10 lakh or 15 tonnes and JSW Steel never had customers who were buying such a small quantity of steel and this is a clear indication that “JSW One Platforms gives us the opportunity to service any kind of customer irrespective of ticket size” he said.
In areas where JSW Cement has no presence, the platform sells competitors’ products and this will help in gauging the market when the group products are launched, he said. Earlier, the Group was tapping the MSME customers only through the dealers’ network, and with this platform a direct link has been established. Almost all the offline dealers and distributors have become partners in this journey, said Jindal.
In the last decade, India has seen a change how B2C worked and in the coming decade, there will see a sea change in the way B2B transacts, said Jindal. “The Group has invested ₹250 crore to get the platform to the current level, and over the next 4-5 years there will be investments of ₹4,000 crore before it breaks even,” he said.
Currently, steel contributes 60 per cent of the GMV given its high value and market presence. About 15 per cent of the GMV will come from non-JSW brands business by FY24 and increase to 20 per cent by FY27.
Away from the trend
JSW One has offered employees stock option up to 6 per cent which will be enhanced to 10 per cent to attract right talent. As a start-up, he said the platform will never get into discounting to gain market share like the current trend. The platform is also tied-up with banks and NBFCs to offer credit at a competitive rate based on customers data. A number of Indian businesses are creating an online platform to sell their products directly. For example, Grasim is foraying into B2B e-commerce platform for the building materials segment with an investment of ₹2,000 crore over the next five years. Similarly, L&T has launched an e-commerce platform for B2B industrial products and services. Called L&T-SuFin, the platform is aimed at both large businesses as well as MSMEs to source their industrial supplies as well as get unsecured financing.
