From ET Realty
NEW DELHI: Building a home and want to buy construction materials yourself? You can now do that online. A slew of entrepreneurs have set up ventures to tap into the $150 billion opportunity in the construction materials space.
Buildzar.com, Supplified.com, eConstructionmart.com, mSupply.com, Buildkar.com and Materialtree.com are helping both builders and individual home owners procure construction materials such as cement, steel, bricks, pre-mixed concrete, safety equipment, tiles, paints among many others online from small, unorganised and scattered vendors. Even Snapdeal offers building and allied materials on its website.
In January, Gurgaon based B2C marketplace Buildzar.com raised $4 million from Puneet Dalmia of Dalmia Bharat Limited in pre-series A funding round and is now looking to raise series A funding of $10-12 million, says Vineet Singh, chief executive officer of Buildzar.
Experts say emergence of such marketplaces can end ambiguous pricing in the industry, offer better options and cut down on delivery time periods drastically, helping projects complete on time.
“This is a city specific model,” said Sreedhar Prasad, partner – e-commerce and startups, KPMG in India, adding, “But can be replicated to other cities by tapping into local vendors.”
While Supplified.com and Buildzar.com are active in the Delhi NCR market, mSupply.com, Buildkar.com and Materialtree.com are active in the Bengaluru market.
Transparency, sane pricing and convenience are the major benefits of such marketplaces, says Mohit Goel, chief executive officer of listed real estate player Omaxe Ltd, who co-founded Supplified.com, along with his partner Nalin Saluja who is director of Faridabad-based builder SPR Buildtech.
The B2B company, which aims to introduce a bidding option for large developers to procure stock, plans to expand to Chandigarh, Ludhiana, Lucknow, Indore and Jaipur over the next three months.
The construction material market in India is estimated to be roughly around $150 billion, comprising mostly unorganised small retailers and potential customers like contractors, architects, individual buyers, and developers. These online marketplaces tie up with local retailers and standardise prices for products. All the transactions are prepaid in nature with minimum orders for free shipping.
Prasad from KPMG feels these online marketplaces would turn profitable from the first day. “Deep discounting is not required in this industry since it is need based, which increases the margins for companies,” he says.
That said, the online avatar of the industry segment is still at a nascent stage with only about 500 to 1,000 transactions per month.
“Companies are now trying to build trust among customers and the industry would take another one year to pick up pace,” feels Prasad.