The government had issued a notification in December 2017 to build an online marketplace that would cater solely to government departments, organisations, institutions, and PSUs. This was named GeM and within five months it was up and running.
36 states and union territories use the platforms to procure goods and services from this marketplace and 24 of these have made it their exclusive source of supplies after a formal authorisation and mandate by the Ministry of Finance.
Today, the platform counts for 35,816 buyer organisations, 2.34 lakh sellers and service providers, almost a million products and 10,136 services. It has completed 1.82 million orders together worth 25,443 crore of which 43% accounts for MSE order value.
In an unprecedented move during January this year, the Government e-Marketplace (GeM) decided to join hands with the private consumer internet startups in the country to mutually benefit from the opportunities they can offer each other.
For GeM, allowing startups to become sellers on its platform meant that instead of buying the entire supplies or service providing mechanisms, they can source them from these startups. This means a significant cut in capital expenditure, increased efficiency and enhanced savings for the govt.
Online air tickets, hotel bookings, furniture, appliances, repairs maintenance, inventories etc are few of the categories that are being deliberated upon for a start.
Startups, at the same time, stand to make huge gains from this opportunity. They get to sell their products or services to these government organisations directly, leading to an increase not just in scope but also scale.
These will not just be beneficial for the revenue aspects of the firm but also increase their market value and reputation as the regular customers will put more faith in these firms that have associations with the government, vis-a-vis their products and services usage.
The first of the consumer internet startups to identify and bank on this opportunity have already paid frequent visits to GeM quarters.
To start with the process of listing on the platform, home service marketplace UrbanClap and furniture and appliance leasing platform Rentomojo have initiated talks with GeM to figure out the appropriate way of enrolling their services on the platform, reports ET.
UrbanClap can offer its repair maintenance, cleaning crew to these govt entities and Rentomojo can spread its mojo by renting out appliances like A/C, refrigerators and microwaves to these government offices. These are small examples of the scope for these startups.
The talks taking place are around figuring out the exact kind of services and products that can be offered by these startups on the platform and what are the financial rules that require modification to enable smooth processing of this partnership.
Many more consumer internet startups are looking at this opportunity and intend to follow Rentomojo and UrbanClap’s suit as this an opportunity only a few would want to miss out on. It would be interesting to see how these synergies go on to increase the potential of not just the startup industry, but the digital commerce space as a whole.
