ET Bureau Online business-to-business platform XSTOK seeks to provide price transparency in a largely unorganised market where small dealers and garment manufacturers from Ahmedabad to Guwahati grapple with the challenge of sourcing fabrics at reasonable rates. “We are working towards removing the inefficiency which exists in the space. The difference created by margins charged by the intermediaries is close to 65% in the offline world,” said Sanjiv Khandelwal, founder of XSTOK.
Since the launch of the e-auction platform for ex-stock and surplus textiles by the manufacturers, the startup has completed 18 auctions with a transaction value of Rs 1 crore in two weeks. The suppliers for the auction included textile manufacturers such as Garden Vareli, Bombay Dyeing, denim maker Arvind, and towel manufacturer Welspun group. “We see a huge demand from dealers, distributors, cutters as well as the hospitality sector who want to place bulk orders,” said Khandelwal, who incorporated the company in January 2015 with cofounder Mihir Shah, former director of TMT Investment Banking.
Ankit Rungta, who owns Vadodarabased business Elite Decor and is enrolled for a bid on the platform, said the platform is simple to use and entails a verification call from XSTOK to start transaction. “As a new business, it has helped me save time and money to stock my inventory,” said Rungta.
While the platform helps match supply and demand, the challenge lies in ensuring consistency. “It is an innovative model though it is imperative for the platform to maintain a steady concentration of deals from leading manufacturers. On the buyers’ end, it depends on how tech savvy the retailers are and what their awareness level is to tap into the business,” said Pragya Singh, associate vice president at retail advisery firm Technopak. XSTOK charges buyers an initial registration fee and suppliers a transaction fee of 3-5% on each successful transaction. The average ticket size of goods for auction varies from Rs 1.5 lakh to Rs 10 lakh, depending on the consignment. “The process of bidding has helped suppliers with 15-18% price improvement,” said Khandelwal.
With 2,500 buyers and 100 suppliers on its platform, the bootstrapped startup has also received queries from East African countries.
Since the launch of the e-auction platform for ex-stock and surplus textiles by the manufacturers, the startup has completed 18 auctions with a transaction value of Rs 1 crore in two weeks. The suppliers for the auction included textile manufacturers such as Garden Vareli, Bombay Dyeing, denim maker Arvind, and towel manufacturer Welspun group. “We see a huge demand from dealers, distributors, cutters as well as the hospitality sector who want to place bulk orders,” said Khandelwal, who incorporated the company in January 2015 with cofounder Mihir Shah, former director of TMT Investment Banking.
Ankit Rungta, who owns Vadodarabased business Elite Decor and is enrolled for a bid on the platform, said the platform is simple to use and entails a verification call from XSTOK to start transaction. “As a new business, it has helped me save time and money to stock my inventory,” said Rungta.
While the platform helps match supply and demand, the challenge lies in ensuring consistency. “It is an innovative model though it is imperative for the platform to maintain a steady concentration of deals from leading manufacturers. On the buyers’ end, it depends on how tech savvy the retailers are and what their awareness level is to tap into the business,” said Pragya Singh, associate vice president at retail advisery firm Technopak. XSTOK charges buyers an initial registration fee and suppliers a transaction fee of 3-5% on each successful transaction. The average ticket size of goods for auction varies from Rs 1.5 lakh to Rs 10 lakh, depending on the consignment. “The process of bidding has helped suppliers with 15-18% price improvement,” said Khandelwal.
With 2,500 buyers and 100 suppliers on its platform, the bootstrapped startup has also received queries from East African countries.
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