R Narayan is the Founder & Chief Executive Officer of Power2SME. Under his stewardship, the Power2SME Group enjoys a position of prominence in sectors in which it operates. Responsible for the overall profitability and performance of the organization, he has an impressive track record of developing robust business strategies and taking the company to newer heights. He sets the overall direction for the business and focuses on the scalability and growth of the business. A qualified Cost Accountant, Narayan brings on board more than 24 years of experience across diverse portfolios like general management as well as sales & marketing. A seasoned entrepreneur, Narayan was also the Founder and CEO of Denave, India’s largest technology powered sales enabling Services Company, prior to forming Power2SME. He continues as a Board Member at Denave.
How do you see Current performance of Power2SME?
Power2SME entered the SME space 6 years ago, as India’s first buying club for MSMEs. Today, Power2SME has emerged as a next generation B2B e-commerce firm for MSMEs in India and has charted a growth path that has allowed it to meet its targets despite facing various adversaries.
We have grown very well in the last 6 years since its inception.With a repeat clientele of over 70%, today Power2SME has over 1,00,000 MSMEs and over 450 suppliers/manufacturersregistered on its platformand has tie-ups with over 18 financial institutions.
In FY19, Power2SME aims to grow at a 3X rate over the previous year.
How Demonetisation and GST has affected Power2SME?
Demonetisation was an unexpected move and most businesses were affected as a result of a prevalentconstraint of cash last year.
As you are aware, Power2SMEcaters to the small and medium enterprises and this sectorwas the hardest hit of the lot, post demonetisation. The vendor-payment cycle suddenly shot up to 60-70 days, which was 21-22 days earlier, having a spill-over effect on Power2SME’sbusiness performance.
As organisations were slowly emerging from the wrath of demonetisation, GST was introduced into the system. Confused by the new tax regime, MSMEs were hesitant in starting production till July which had a cascading effect on our operations as well.
However, in terms of GST, Power2SME was already attuned to the new taxation system. The company, a FICCI member, proactively reached out to MSMEs across different regions in India by organising SME transformation camps. In collaboration with leading advisory firms in India, Power2SME apprised MSMEs on how to be GST ready and align their business accordingly.
What are your views on current Start-ups and SME World situation in India?
The MSME sector contributes 28.77% to India’s GDP. However, the worldwide contribution by SMEs to the country’s GDP stands at a robust 49%. Therefore, the growth of this sector needs to be pushed in India. This thrust would entail –
- Improving the financial inclusion of the segment
- Creating jobs at a significant level by 2020 when India will have largest base of eligible workers in the world
- Supporting the next-gen entrepreneur and innovation
- Helping mitigate the need of urban-rural mitigation
A key element that has been identified for the success of MSMEs is theeasy access to finance. Therefore, Power2SME, in order to strengthen the MSME framework, conceived a strategy to drive financial innovation. Through its app, FinanSME, Power2SME is aiming to deliver (capital both Debt and Equity) to MSMEs which will drive financial inclusion, a key to growth of entrepreneurship. This will also play a crucial role in increasing the MSME contribution from the present 16% towards the world average of 49%.
At present, there are a plethora of start-ups that have emerged in India with a promise to offer unique ideas, products and services. Not only that, there has also been a growing investor interest in the Indian start-ups, attracting new venture capital investors.
The B2B start-up space is also emerging as a lucrative option for investors to place their bet on, in comparison to their B2C counterparts. The share of investments in B2B start-ups has risen considerably. According to a 2017 NASSCOM report, B2C funding witnessed a fall from 85% to 76% while B2B space registered an increase from 27% to 31% in receiving funds.
What is the future of Start-ups and SME’s in India?
Start-ups in India
According to NASSCOM’s 2017 Indian Start-up ecosystem report, India is now the third largest start-up base, running neck-to-neck with Israel. Therefore, it is evident that start-up space in India has come a long way and is uniquely poised to further grow, making the ecosystem in India more robust.
The year 2016saw an addition of 1400+ start-ups in India. Going by this healthy pace, every year, the number of start-ups is projected to cross 10,000 by 2020. A host of technology driven start-ups have alsoemerged in recent years, hinting at the rise of entrepreneurial spirit in the country.
In future, start-ups, in order to be successful, need to develop solutions that can address and solve crucial social issues like waste management/water management amongst others, building business models for the society as a whole.
SMEs in India
Employing over 100 million people, the SME sector in India contributes 28.77% to the national GDP, 40% to exports & 45 % to industrial inputs. India has one of the largest SME bases in the world and the sector still has tremendous potential to be tapped. Despite having large base of SMEs, the sector’s contribution to the nation’s GDP is quite less in comparison to the world average of 49% contribution by SMEs in countries like China, US, UK. The MSME segment is in dire need of a level playing field that not only requires great policies and campaigns but also proper implementation of those policies.
With the government’s proactive efforts towards bridging this gap through their focus on transforming India into a manufacturing hub as well as increasing the nation’s contribution to global exports, the future entails a positive outlook for the SME sector. However, there is still a long way to go in order to reach a stage where our Indian SMEs will be able to fully realize their latent potential.
Future plans of Power2SME?
Power2SME is planning to –
- Broaden Its Product Portfolio – Starting with Construction, we have expanded to metal, polymers, chemicals and yarns. Within metal also we have expanded to ingolt, billets and other grades.
- Strengthen And Expand Vendor Relationships – Power2SME is looking at international markets to source material from. This is still at an initial stage.
- Deepen Engagement with SMEs pan India by developing deeper routes for new products for SMEs.
Can you tell us The Story behind Power 2 SME?
After working with corporates for about a decade, I realised I could execute my thoughts into successful business models and thus came the idea of starting my own firm. In 1999, I founded Denave, a company focused on helping the company’s clientele find customers and this is when I started to see the parity, or the lack of it, between SMEs and enterprises. This is where I decided to work on bridging the transition which brought about the idea of Power2SME.
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