An entrepreneur for the last 14 years, with a strong corporate background, as founder & CEO of Power2SME, R. Narayan’s vision for the company’s future is both bold and ambitious. Narayan started his career working in sales and marketing profile across Microsoft, Oracle and Tata. He has now set his sights on making Power2SME a billion dollar company in the next 5 years. This vision is based on the potential of the SME sector in India which contributes over 40 per cent of India’s exports and 45 per cent of India’s industrial output, the current growth rate of Power2SME and Narayan’s own proven entrepreneurial track record.
A chartered accountant by training, sales and marketing professional by choice and an entrepreneur by spirit, R. Narayan set the overall direction for the business and overseas marketing, operational and business development efforts for Power2SME. With over 24 years of general management, sales and marketing experience, Narayan has worked closely with over 2 lakh SMEs across India over the last 10 years, bringing a deep understanding of SMEs and their needs in an evolving economy. During his stint with Microsoft, Narayan managed the SME segment and distribution business of the company.
Before starting Power2SME, Narayan also set up Denave, India’s largest technology powered sales enabling company with customers such as Nokia, Cisco, HP, Lenovo and Microsoft. Denave was a self-funded venture and he was responsible for scaling up the company from a team of 100 to a 3500-people organisation over a decade and across APAC. He continues as a board member at Denave.
Narayan is also associated with FICCI as the Vice President of FICCI- CMSME (Confederation of MSMEs), an affiliated body under the umbrella of the Federation of Indian Chambers of Commerce and Industry (FICCI), an apex Chamber of Commerce & Industry of India.
Indian small and medium enterprises (SMEs) today are the undisputed power house of the economy. Not only they are generating employment opportunities but are also significantly contributing to india’s industrial output. R. Narayan, founder and CEO of Power2SME, talks to WCRC Leaders Asia’s Supriya Batra about the importance of SMEs in the current Indian landscape. Power2SME empowers small and medium enterprises by procuring raw materials for them at competitive price points, thereby enhancing productivity and impacting the bottom lines of SMEs in a positive manner. The company caters to raw materials across multiple categories like chemicals and additives, inks, paints, metals, polymer commodity and polymer engineering
When was the brand established?
Power2SME started its operations in 2012.
What is the USP of the brand/product/services within your industry segment?
Power2SME is a first-of-its-kind business initiative whereby we pool the demand of our SME clients and obtain the best possible pricing for raw material procurement. Our experienced and specialised professionals negotiate the prices directly with manufacturers and obtain prices that are considerably lower than the usual market prices that are offered to individual SMEs. We take complete ownership of the entire order process for the customers, from ensuring a quality supplier pool, best possible prices, flexible payment options, payment of taxes (sales tax, service tax and excise duty) on behalf of the SMEs to doorstep delivery. We are focussed on working with large, established and trusted suppliers so that our customers are assured of the quality of the product. So, what makes us unique is our ability to be a onestop destination for SMEs for all their business needs.
What would be your market market share and annual turnover? And what has been the Yearon- Year growth like?
Our annual turnover was Rs 19 crore in FY13, Rs 64 crore in FY14 and is expected to touch Rs 130 crore in FY15. Our YoY growth was 337 per cent in FY14.
List five most critical factors leading to the success of the brand in order of importance and kindly elaborate on each.
India’s first ‘Buying Club’ for SMEs: Power2SME is a first-of-its-kind business initiative, whereby we pool the demand of our SME clients and obtain the best possible pricing for raw material procurement, enabling us to create a larger pool of vendors for our customers. We directly purchase raw materials from the manufacturer and sell it to our customers at competitive price points across multiple products in categories like chemicals, inks, paints, metals, polymers, etc. It is a unique concept and we enjoy an early mover advantage.
Increasing profitability of the SMEs: Raw material supply is the most critical for an SME to keep its business running. We, at Power2SME, have a team of experienced procurement professionals who negotiate the prices for volumes directly with the manufacturers and get prices which are considerably lower than the market prices that are “Our annual turnover was Rs 19 crore in 2013, Rs 64 crore in 2014 and is expected to touch Rs 130 crore in 2015” offered to individual SMEs. Power2SME also provides an online platform that enables the SMEs to cut production costs and build efficiencies in their business processes.
Complete ownership of the order process: We are accountable for the entire order process of our customers, from ensuring a quality supplier pool, best possible prices, flexible payment options, payment of taxes (sales tax, service tax and excise duty) on behalf of the SMEs to doorstep delivery. This enables us to be an one-stop destination for the SMEs that provides them with a holistic end-to-end service.
Assisting SMEs: Our core mission is to “Empower SMEs to enable the India growth story”, therefore, the company focusses on providing special assistance to the SMEs like, Damage & Theft Insurance for phone, Credit / Debit Card Fraud protection cover, 24 x 7 Assistance for emergencies like losing a wallet or phone, Hassle-Free Claim Management & Processing, Emergency Travel Assistance. Power2SME also assists the SMEs in financial and legal aspects of their business, thereby, empowering them in the best possible manner.
Collaborative Workforce: The team at Power2SME comprises professionals who are driven by a passion to help empower the SMEs in order to achieve their goals. What makes us unique is our ability to make customer engagement a delightful experience. The team comprises over 120 professionals with domain expertise in sales, supply chain, marketing, finance, human resources and IT.
What are future plans of the brand? How have these been formulated keeping points of parity and disparity with similar enterprises in mind?
Power2SME had less than 10,000 registered SME customers in the initial year and now the customer base is over 30,000. The future has a lot of offer for the SMEs as Power2SME strives to be the one-stop destination for the SME community. We believe that we have a captive customer base that is sitting with us. Our objective is to ensure that we are able to offer services to SMEs across a wide portfolio so as to be able to cater to their diverse requirements. For the same, we are exploring alliances with third party service providers. Power2SME will act as a facilitator for services across insurance, finance, sales and marketing, to name a few. It also has plans to open offices in Madhya Pradesh, Andhra Pradesh and Karnataka.
What is your outlook on SME segment?
SMEs contribute about 45 per cent of the industrial output, 40 per cent of exports, according to the SME Chamber of India. According to MSME’s 2011-12 annual report, the sector is estimated to employ about 6.95 crore people in over 2.61 crore enterprises throughout the country. Thus, we are strong believers in the potential of India’s SME market and we have a long-term vision of empowering SMEs by helping reduce their purchase costs and by catering to SMEs across multiple sectors. However, SMEs are facing numerous challenges related to pricing of raw materials, quality of the products purchased and lack of options in the materials purchased. Therefore, our customers count on us to overcome these problems. Our business allows SMEs to compete on an equal footing with large enterprises. Also, there is no single organisation that was dedicated to making life simpler for the SMEs. Power2SME is the first organisation that is bridging this gap, at an individual as well as at an organisational level.
What are the core values that drive the brand?
Our foundation is based on robust set of values – TRICE (Team work, Respect for individual, Customer orientation and excellence). Our core values have been the guiding principles behind Power2SME’s phenomenal growth.
What steps are taken to establish a connect with your target market?
With a base of 38 million SMEs, the market opportunity is huge for companies servicing the SME sector in India. Power2SME was quick to spot the needs of the SME sector and devised a model which enables the small and medium enterprises to obtain the most optimal pricing for their procurement needs. We pool the demand of hundreds of SMEs for multiple products for their business needs, thus allowing it to not only obtain the most optimal pricing but also a larger pool of quality suppliers. We buy directly from the manufacturer and sell to the SME directly. Power2SME takes complete ownership of the entire order process, including taking title of the goods, which ensure quality of the raw material at the best price with flexible payment options made available to SMEs. We also provide an online platform that enables the SMEs to cut costs and build efficiencies in their business processes, thus allowing them to compete on an equal footing with large enterprises. This platform is available 24×7 to all the customers and can be accessed without any charges. Some of our key vendors are Arcelor Mittal, Akzo Nobel, Haldia Petrochem, GAIL, JSW, Indian Oil and SAIL. Steel and polymer were two of the biggest requirements of SMEs and Power2SME decided to target this existing opportunity; first tapping the market in the NCR region through our headquarters in Delhi. We have now opened our regional offices in the west, south and th east. To market the services of Power2SME, a mix of offline and online marketing strategies were devised. Digital marketing includes SEO & SEM marketing. We have been following multiple off-line routes to reach customers including on the ground sales, providing a dedicated call centre and building alliances with leading industry bodies and organisations focussing on SMEs.
What according to you are the five competitive brands in the country and in Asia in your category?
Buying Club for SMEs’ raw material is a unique concept and we enjoy an early mover advantage. We have been unable to identify another player operating with this business model in India so far. There are several similar concepts globally but they focus on providing discounts on services.
What according to you is the impact that the company has created in the minds of the consumers?
Power2SME, being the first ‘Buying Club’ for SMEs in India, focusses on the small and medium business enterprises segment. Staying true to its mission to “Empower SMEs to enable the India growth story”, the company focusses on increasing their profitability by reducing their purchase prices and by providing financial and legal assistance. Thus, Power2SME strives to ‘empower’ businesses.
Kindly highlight the milestones the company has reached in the last five years.
Our company has raised 3 rounds of funding from Inventus Capital, Kalaari Capital & Accel Partners. They have together invested over $15 million in the company. The company has over 30,000 SMEs registered on its portal. We are spreading to other parts of the country as well. We now have our regional offices in the west, south and the east. Power2SME has won numerous awards and accolades. It was selected amongst the Red Herring’s Top 100 Global list for the year 2013. It was also chosen amongst the Red Herring’s Top 100 Asia list for the year 2013. I won the ‘Serial Entrepreneur of the Year’ award at the Entrepreneur India Awards 2013. Power2SME won the “Silicon India Company of the year 2014” for the Vendor Consultant category. In January 2015, Power2SME was recognised as ‘Top 100 Innovative Companies’ by Inc. India. Power2SME was awarded the ‘Best strategy in line with Business’ award at Global HR Excellence Awards 2015.