Some interesting comments given by various fund houses on Indiamart.
Disc : Invested in core portfolio.
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Motilal initiates after it became >3x from IPO price.
Disc: Invested
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Interesting discussion with the founder. Every time is being asked about share price, he simply discusses about business. This is too good.
Disc : Invested in core portfolio.
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I researched and started the threads on Indiamart and Affle. Clearly I found Indiamart to be a better business, generating higher cash flows and promoter to be more honest and down earth. But the market in its wisdom is giving Affle a higher PE multiple
Disclosure: Invested in both Indiamart and Affle.
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Hi,
I just did a quick check on the user website Quora to understand the feedback of IndiaMart’s services on getting customers and leads. Check the following links:
https://www.quora.com/Is-IndiaMART-trustworthy
https://www.quora.com/Is-Indiamart-really-effective-getting-leads
From my past experience with these online B2B or B2C, I see that negative feedbacks are fairly common. But the feedback answers on Quora are mostly negative referring mainly to fake leads, fake suppliers and so on. The issue with verification of suppliers is also common. I considered this as odd for a company that claims to value its customers.
Another (positive?) point which users mention is that IndiaMart is not as polished as Alibaba, but is the best there is in India.
Could this be a red flag or is this common in all such B2B platforms?
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Absolutely wrong to take it as negative. This happens since they do not control logistics, quality control and payments which is changing a bit and in the pilot stage. This is not a marketplace strictly and there are always possibility of being conned. There are many fraudulent ads on google but do you blame google for that? Google does not verify each and every claim but they do take down these misleading ads and ban these advertisers when pointed out.
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@sumi00 thank you sir for clearing my doubts.
Your mention of Google raised another query in my mind.
As you correctly said, nobody will blame Google if they come across fraudulent ads and Google also does a fine job of taking down such ads. However, Google at this current day is the most powerful search engine in the world and one of the biggest companies. A few fraudulent ads wont damage its reputation. Whereas the SMEs in India are just starting to warm up using internet platform services to sell their products. I agree to your point that Indiamart cannot do any hand holding and the buyers have to do their due diligence. But unless an ecosystem is created where SMEs have to use Indiamart or other internet based platforms to run/grow their businesses in India, wont such fraudulent experiences push away prospective customers, especially the paying customers?
Please correct me if my understanding is wrong.
That’s why their ad system works. It is like a blue tick of twitter. When you pay them for prominent posting on the network, they visit your premises and verify all the claims that you make. They have sales people on the ground to carry out these verifications. It also makes buyers comfortable in dealing with these folks. However, chances of fraud remain high if one deals with unbranded and unknown supplier and you can’t blame IndiaMart. They simply ignore these cases of frauds since they are basically classified site. They can not verify everyone who is registered as most of them don’t generate sales. If you as a seller happen to generate sales through Indiamart, one should pay them to get prominent posting since it makes sense from RoI perspective. They are not doing any social service. If they make tons of money, they might outsource the verification activity for all listings. One more thing, if somebody is hell bent on defrauding you, he/she can do it on any platform including Amazon. Amazon can only ban them for any further business.
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Thank you sir for the reply.
I guess I will have to understand the business model better.
Hello sir,
I cam across the following talk on valuation of internet based companies having different models such as subscription, advertisement, transaction etc.
As per the speaker, traditional valuation metrics dont apply as much to growing internet companies. He suggests that these companies need to be valued based on the users they currently have and are expected to have.
Do you think this model can be applied to Indiamart?
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INDIAMART INTERMESH: CO HAS DISINVESTED 70% STAKE IN EQUITY SHARE CAPITAL OF 10TIMES || DEAL FOR 2.1M RUPEES
Views invited
This is interesting update for IndiaMart :
Not sure, how this would pan out. But, if this gets successful, that would create another level of synergies for many other companies to tie up with IndiaMart.
Disc : Invested in both Bajaj Consumer & IndiaMart.
(Shared this link in Bajaj Consumer thread as well)
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A slight drop in buyer side traffic from 66.08 million to 64.72 million in August vis a vis July numbers. The management expects a slight increase in Q2 number of subscribers from 133,000. This number needs to be closely tracked. The management is trying to get back the 14-15k odd subscribers it lost during the covid quarter. I expect the company to reach 1,47,000 subscribers it had pre-covid by end of year or maximum by Q1 2021.
Long term company story is linked to growth in economy + digitalization theme which is accelerated by covid. The company is still a solid bet, though market seems to have priced a lot of good news in. The company also has a solid 1000 crores in books which can be used to mitigate short term risks for long term benefits or for driving inorganic growth if need be.
Disclosure - Invested. Waiting for a clarity in Q2 numbers before taking fresh positions.
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Is there any reason why stock is rallying up continuously and looking very expensive?
I think general interest in ecommerce has gone much higher with pandemic. Shopify, Etsy and Amazon that are something that are comparable have run up too high. I think fundamentals have remained more or less similar. I think only this is the one listed pure ecommerce player with SHOPIFY like business model…
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I think so, as the article says it is free for Retailers to list (so it impacts B2C)
where as Indiamart is more of a B2B and not B2C
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Tech giant Google has announced that starting this month it would make it free for retailers to list their products on its Shopping Tab for free. Analysts believe this could spell trouble for domestic local search and listing companies, such as Just Dial and IndiaMart. Until now, Google’s Shopping Tab listings were paid, which pushed a lot of sellers towards the more economical domestic platforms. “Google’s announcement is a gamechanger. It could create headwinds for companies, such as Just Dial and IndiaMart. One has to keep a tab on how this development plays out,” said an analyst. Shares of IndiaMart have more than doubled this year, while those of Just Dial are down 30 per cent.
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I dont think Google is a competitor to Indiamart at all. Historically everyone used to search for products on Google. But progressively as Amazon has become very popular everyone searches for products they want to buy on Amazon. So Google has been losing out to Amazon in B2C space in terms of traffic and referral fees.
Imagine you want to buy an Iphone. Where will you go and search for one? Google or Amazon. Google is fighting for a part of that traffic. Indiamart is a B2B platform and in a different business.
Google will kill your business or Reliance will kill your business is a common scare tactic…yes Google did kill Just Dial’s business, but it is important to do a second level of analysis before jumping to conclusions.
Other views invited on the same…
Disclosure invested and perhaps biased (but very open to hear a contra view)
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