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E-procurement pioneer Kobster drives efficiencies in B2B segment

Thomas Abraham Bengaluru | Updated on October 22, 2018

Karthik Ramaiah, founder, Kobster

Procurement is positioned as a strategic asset of an organisation to drive savings

Can efficiencies in the procurement of items as mundane as office stationery, pantry items and cleaning supplies, help corporates in a significant way? Yes, says Chennai-based B2B e-procurement platform Kobster Eshop. It cites a case study related to Kobster’s work with Urban Ladder.

Kobster says Urban Ladder had a procurement model which consisted of 12 locations. Forty per cent of its time was used to manage about 15-20 vendors.

Better efficiency

Kobster claims that after Urban Ladder moved to Kobster’s platform, Urban Ladder’s efficiency improved by 20 per cent. It positioned the procurement department as a strategic asset of the organisation, saved 20 per cent in its overall procurement spend, and ended up purchasing from one supplier for all its locations.

“With our e-procurement tool, Urban Ladder gained 80 per cent more visibility in their procurement process,” Karthik Ramaiah, founder of Kobster, told BusinessLine.

“Our real-time approval workflow empowered them to have more control on purchase requisitions, reduced human errors, saved time and resources, and thereby, improved efficiencies,” he said.

The benefits that flowed to Urban Ladder included getting products delivered across five cities without any delivery charges, dedicated Relationship Manager assigned to each account manager, and accurate reports and analytics to help Urban Ladder save costs.

Background

Kobster, which claims to be a pioneer in the e-procurement industry in India, was incubated and graduated from PayPal on May 15, 2015, and is funded by Incubate Fund, Splice Advisors, and LetsVenture. Kobster also counts Oracle, CoWorks, Virtusa, Altisource, BRG Energy, WeWork, DB Schenker, Practo, GEP, and MindTree among its major customers.

On the rationale for starting a B2B e-commerce firm, Karthik said, “Prior to starting the company, we did research in e-commerce in India and abroad. One interesting finding from this study was that typically, in any growing economy in the world, the market first adapts to B2C commerce. This is followed by companies adapting to B2B e-commerce.

“More interestingly, many of the B2B e-commerce firms outgrew the B2C e-commerce firms. If you take the top fiv e-commerce companies in the US, three (Grainger, Staples, and Amazon Business) are B2B. So, in 2012, when people were beginning to buy online (B2C e-commerce), we felt that five years down the line, B2B e-commerce would the next big thing,” he said.

Karthik and the other founders of Kobster went on to study the way procurement was done at the company they were working for. And they found a lot of things that could be changed through the use of technology in procurement, and drive efficiencies, including cost-savings. Thus, was born Kobster.

3 pillars

Kobster has three major pillars. One is the e-procurement platform. Second is the e-marketplace.

“We have around 50,000 products listed on the platform which come from about 800 brands which are served by over 1,500 suppliers. These products are available across the country,” he said. “The third pillar is the last-mile vertical. We operate in Chennai, Bengaluru, Mumbai, Hyderabad, and Delhi. And we have a ‘last-mile’ team in each of these cities. In the B2C segment, if you order online for four different items, say, a pair of jeans, a mobile phone, cosmetic product, and a book, chances are these will reach you in four different shipments. In B2B, where companies order hundreds of items in one order, we cannot ship them in different orders. So, we get all these items into our fulfilment centre and the last-mile team packs and delivers them as one single package. Ours is a zero-inventory model,” he added.

From 85 employees and six offices now, Kobster has charted out plans to expand to all corners of India in the coming years.

Published on October 22, 2018

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