Macfos Limited- A niche E-commerce Company

Hello everyone,
I would like to present my view on macfos, please note this is not data backed and basically my views which can be very wrong.

Their B2C Business

Any body buying from their website is B2C and I am assuming most of them would be collage students who buy it from some projects, competition etc etc. Following are the things which come to my mind.

  1. The churn of this segment is very high. Once a student graduates will he again order from them?? If they join an XYZ company then they would get the equipment’s form XYZ company. So every year or two I am catering to a new faces.

Since the churn is high are we extrapolating brand recognition to much or it is just the customer looks for better price and product availability which they have hence they preferred.

There are 2 ways for them to grow if above is true, market share growth and market growth. So what is their market share in B2C and can this market grow at 25% or 30% when the churn is so high?? So in B2C it will also be fair to assume that there is no perpetual repeat order like we do in amazom) because once I am out of collage why would I order from them??

Now the counter to this is B2C is not the growth driver but B2B and B2G is…

How much of B2B/B2B are we expecting as a share of revenue for this company which has been like a 50%B2C in past. Doesn’t my quality of business deteriorate when B2B/B2G increases as a percentage of my sales especially B2G where there are so many examples of receivables issue??

In B2C the payment is happening either online or through COD which will not be the case with B2B/B2G hence if they increase as a percentage then my working capital would start facing problems??

Doest the stretchability of valuation decrease if my major growth is going to come from B2B/B2G???

One last question which comes to my mind is…

This business is relevant because I have to buy from my international suppliers and sell it domestically (inventory management) if we as a country are planning to do good in electronics hardware and we want to manufacture semi conductor so once it is domestically produce what is the use of robu???

It is easier to establish supply chain domestically. If domestic production is going to be so high then it can be sold on amazon as well or the manufacture can have their own website or macfos can be acquired???

A must watch video for every one regardless of interest in the company. very inspiring

All of the above questions can be very dumb but I look forward if anybody could help me with them.

Disc- intrested,tracking, not invested

1 Like

Let us see the market, is it growing? The answer is obvious Yes; more projects are being undertaken, more prototype being created, more electronics, more drones, more motherboard, more chips.
Now, as market is growing, which channel will grow faster- offline shopping from Nehru Place or SP Road, or online. I think the answer is obvious.
In the online space, obviously there will be many players. Who will succeed? What ought to be the criteria in succeeding in this space?
Here a customer needs many parts for a project or prototype. All parts must be compatible with each other. The customer will prefer an e-commerce site where she can get all the parts. Hence numbers of parts you have on the site is very important and the number must keep on increasing. Last year Robu had 12k parts, and it is increasing at a fast pace. In a few years it may be keeping 25k or 50k parts online for sale. Numbers of SKUs available on a website will create competitive advantage in this space.

The business of Robu (or digikey) is such that Amazon cannot take away that. It is too specialised and complicated for a general retailer. Further the market size is small for a general e-commerce retail.
Will India have a digikey in next 5-10 years? I think yes, Indian market is too big. In my view Robu is a good bet in Indian market.
Here is an article examining various electronics parts online retailers in India,


In case of B2B Robu will also buy in credit terms only from Chinese suppliers as they will be getting repeat orders as well for same parts…So huge revenue growth possible in B2B only and it’s ok to work with lesser margin if revenue grows in higher multiples

1 Like

Macfos imports most of the skus from China. Wonder what will be the impact of import restrictions from China. Govt is already talking about banning use of chinese parts in drones, which contribute about 15% revenue


if their is regulatory shift towards India based manufacturing, surely Macfos will pivot (afterall they are running a business).

in my mind, for their B2C biz to grow, TAM has to expand. Are their enough tinkering hobbyists in India today? will this segment grow over a period of time? need to be researched. Can look at how Digilink grew their business in US.

Disc: studying, not invested

The trend is definitely on upswing. Some fellow investors who live in big cities and kids are going to good school have reported buying stuff from Robu for their kids studying in class 7+. What’s happening in big cities will catch up in next 100 cities in next few years.


1 Like

As per my view ,That is completely wrong way of thinking 1)There is no doubt on population growth and demand growth in the country , but when it comes to realization , a micro level perception is completely diffrent 2)They have no entry berier , 3)They have huge dependency on chinese goods 4)E-commerce is compeltely game of feedback, 5)i personally doubt on promotors capabilities to go beyond current level. 6)If there is any juice left in the story 100s famous investors r watching the story. why anyone had not jumped yet.

Disc, Not invested

Many important issues have been raised and discussed. My views are as follows;

Addressable Market:
The electronics component market is huge in India. There are many such small market clusters all over India- Nehru Place or Bhagirath Palace in Delhi, S P Road in Banglore, Budhwar Peth in Pune, Lamington Road in Mumbai, Richie Street in Chennai etc. All these places have 1000-2000 small shops. On all India basis, the number of such small shops is not less than 25000. As these shops are surviving, their sale ought to be at least 8-10 lakhs monthly; or a crore annually. Thus, the addressable market is not less than 25000 crores.
On a Macro basis, Invest India says about the electronics market:

India is the second largest importer of electronics items. Electronics manufacturing in India is actively promoted by the Government of India through electronics policy, PLI scheme, and 100% FDI.
Thus opportunity size is not a limiting factor for Macfos.

Electronic Component Market:
We need to understand the market of electronic components- particularly small-value items. Macfos is certainly not going to sell popular items in bulk to anybody; bulk buyers can easily import and buy directly from manufacturers. Macfos is addressing the market where a customer cannot buy directly from the manufacturer- and that is a big market. A market that is being served by numerous shops in the offline electronics market, all over India. Further, as many of the components are imported, it becomes even more difficult for small buyers to import and procure such goods due to customs procedures and logistical issues.
Another aspect is number of products offered on E-com site. Robu has 12K products on offer. There can be millions of products. Digikey has more than 1 million products on its website, lately, I read somewhere- 2.7 million products on its e-com site. Thus opportunity size is huge in this aspect too- if you increase the number of products, say from 12K to 25K- the topline is likely to go up in proportion. With automated inventory management, the use of AI; an e-com operators are in a far better position to serve small buyers.
Another aspect is the networking effect. The effect is generated through the number of products offered on an E-com site. You are likely to have more visitors to your e-com site if you offer a higher number of products. You can serve small electronics repair shops situated in various corners of the country. The electronics repair market in India can help generate over five million direct job and market size is upward of 20 Billion Dollars.
Read more at:

We can note that electronics components are sold in Clusture markets. Clusters of shops develop in certain categories of goods- electronic parts, even auto parts precisely for a particular reason. One shop cannot have all the items a customer need, but a cluster can supply huge numbers of items. However, an e-commerce operator can have all the items. Thus, irrespective of Robu’s future success or otherwise, I am of the view that it is an extremely good area for any E-commerce operator. It is a winner takes it all market.
Another good aspect is the manufacturing and development work being done by the company. In mass products, the company is also trying to build brands, which are likely to help in future.

Howsoever good a business opportunity is, no business can succeed without able management. Here is a business started by young persons, without any capital or backing. Even in the IPO, the company didn’t dilute any shares. These young people are learning from trial and error, reached such a height, and made themselves the largest e-com operator in a niche area. The electronics component market is big in India, and there were many players with a lot of cash who could have created a Robu-like company but didn’t. From my own experience, I can say that starting a company is the most difficult thing, getting a sale of the first crore or first ten crores is the most difficult- increasing it to a hundred or thousand crores is far easier. That is why I like this management.
Every business will face changes, competition, and challenges. They import many goods from China, it is a fact. Whole India imports. Tomorrow the Government may ban it, it is okay. Tomorrow new products will come. Inventory can become obsolete. Of course, these things can happen. Unfortunately, I don’t know any business where these things will not happen. It is part of every business journey. First-generation entrepreneurs [my bias] have a better ability to face these challenges, and that is why genuine wealth is created by first-generation entrepreneurs only.
[Disclosure- Invested and Biased]


Wherelse will we buy it from? everything from your laptop, phone, electronics, all have the “Manufactured/Assembled in China” tag. Even your medicines have chinese origin as we import a large number of APIs from China.

1 Like


Do we know why Jayesh Jain resigned from the company and sold all his shares during the OFS?

Disclosure : Not invested

1 Like