Dr. Rafi Shaik, Founder & Chief Scientific Officer, Carbanio, India's first and largest chemical bazaar, spoke exclusively to Pravin Prashant and Rahul Koul of Indian Chemical News on Carbanio's business model, size of digital chemical business, market share, clients, future plans, revenue and profit numbers, use of AI, ML, and Big Data, future collaborations, future outlook, and others. Excerpts of the interview:
What's the idea behind Carbanio? Please share Carbanio's business model and long-term objectives?
The idea to establish a chemical sourcing platform like Carbanio dates back to my research days. Approximately two decades ago, I constantly faced challenges of getting the right purity and quality chemicals. Sometimes I was unable to get the chemicals from India; further, getting customized chemicals for research was not less than a nightmare. I always wondered, how can the sales network be so poor but I wanted to change the way people buy and sell chemicals.
A couple of years later, when digitization started booming in the other verticals, I decided to use this concept to change chemical procurement in India, that’s how Carbanio was established. Today, I can proudly say that Carbanio is India’s first and largest chemical bazaar which has helped industries and academia with hassle-free chemical sourcing solutions.
Our business model is simple. We follow an elaborate verification process for our sellers to be a part of Carbanio listing. Sellers can be anyone, from a manufacturer, supplier, and dealer. Our verification process is to check the authenticity of the seller and offer complete peace of mind to the buyers. Buyers on other hand can search for the chemical with their requirement of purity, quantity, location, etc., and place an order. Payments are accepted through secure online modes, where the money is released to the seller only after the buyer receives his consignments and is happy with the consignment. In case of any discrepancies like poor quality, purity, or other issues, the money is refunded back to the buyer. This way, we try to maintain trust with both the parties.
Talking about long-term objectives, we envision to create a strong digital, chemical sourcing network for easy and effortless chemical buying and selling.
What is the overall market size for online chemical business globally and in India? What are the key trends in online chemical business?
The market size of the Indian chemical industry stands at US $180 billion this year, while the global market is a whopping US $5.3 trillion. The Indian chemical industry is expected to reach US $304 billion in 2025 growing at a CAGR of 9.4%. However, the on-going COVID-19 pandemic situation has increased the CAGR rates accounting to nearly 13-14% increase in the last one year. The key trends in the digital chemical business are data analytics, IoT (Internet of Things), Artificial Intelligence (AI), and Machine Learning (ML). Incorporation of these latest technologies will improve the digital chemical business like never before.
What is your market share in India and how are you planning to increase your share?
Currently, the total market share of digital chemical business is 18%, of which Carbanio contributes the maximum. The 18% include about six lakh chemical businesses which is expected to grow to 40% in the next three years. Our plans to increase the share remain simple; we believe in continuing the extraordinary services we are already offering, this will help us retain our existing clients and attract new ones, eventually helping us gain more market share.
Who are your major clients and the segments that they belong to? What's the share of clients in academia and industry respectively?
Carbanio’s chemical sourcing helps diverse segments within the chemical industry; however, major clients include the pharmaceuticals and speciality chemical market. We source chemicals to both industrial clients and academia. Currently, the industrial clients contribute 70% of Carbanio’s overall client base, while academia is around 30%. This trend will slowly change with the increasing awareness of digitization in the Indian chemical industry.
From 200K product listings in 2018 to 7.2 million in 2020, Carbanio has come a long way. How was it made possible and what were the challenges you faced? What are your future plans for product listings?
The path was not easy. Since this was a new, modern concept in the conventionally operating chemical industry, we had to create awareness, build trust, and convince the sellers/buyers to try out this amazing platform. We were not making alternations in any of their operational processes. We were just incorporating technology in the traditional business to make the procurement process easy, allowing organizations to focus on their business rather than wasting time in looking for the right supplier.
Our future plan is to digitize all the chemical clusters in India. There are currently 178 chemical clusters, of which we haven't touched even half of it. We are determined to make the procurement process easy for sellers and buyers across all the clusters.
Carbanio's overall revenue and profit performance during FY 2020-21 and expected revenue and profit in FY 2021-22? What will be the key drivers for this growth?
The COVID-19 pandemic has shed light on the need for digitization in today's world. Hence, the profit performance margin was going extremely good in the FY 2020-2021. We are expecting a revenue boost of 78 times in FY 2021-22. Our key drivers to growth include onboarding a large number of manufacturers and suppliers on the Carbanio platform.
What sets you apart from your competitors in terms of unique offerings and user experience? How do you plan to make it completely hassle-free?
Our key strength is offering a trustworthy service to our clients. Though we are a new-age solution platform, we still acquire and run on the old-school concepts of trust and quality. We have so far not had even a single client who was disappointed by our services. In case of any conflict between the buyer and seller, we make sure to resolve the issue by refunding the money back to the seller, we usually keep the seller's payment on hold until they receive the consignment and are completely satisfied.
To answer your question of completely offering hassle-free service, I would take pride in announcing that Carbanio is already a hassle-free chemical platform. This is the simplest, effortless, and effective chemical sourcing platform you can ever come across.
How easy is it for chemical sellers to enlist themselves on Carbanio? What benefits do you provide to sellers for their businesses?
To get enlisted in Carbanio is very simple. All you have to do is get a detailed verification done by our team, and once the authenticity is proved, you are on our list. Sellers have the privilege to expand new marketing/sales channels, reach more buyers, showcase their newly formulated products, sell their regular products, and a lot more.
Why should chemical buyers visit Carbanio? What sourcing benefits are being offered currently? Are there any special offerings for researchers and start-ups?
Chemical buyers should not miss on Carbanio; this is a unique platform that caters the needs of chemical buyers. The company has tried to address all the issues and offer a buyer-centric solution. With Carbanio one can benefit by checking the availability of the chemicals in real-time, buy only from verified sellers, discover prices and compare them in real-time, look for customized chemicals for R&D needs, make secure payments, and finally expect delivery on time.
We don't have any special offerings for startups as such; however, for researchers, we encourage industries to provide chemicals for free or discounted rates to the research institutions. This helps in strengthening our country's efforts on the innovation front.
What has been the outcome of your collaboration with CSIR-IICT? Any new partnerships in the pipeline which will help Carbanio?
Collaboration with CSIR-IICT was a historic moment for Carbanio. We not just sourced chemicals for CSIR-IICT's research for the COVID-19 vaccine during the lockdown but also created an awareness among the fraternity as to how important digitization is in today's world.
Yes, we have a few partnerships in the pipeline with esteemed institutions like National Chemical Laboratory, Pune and IISER Berhampur, among others.
Any plans for using the new-age digital tools such as Artificial Intelligence (AI), Big Data, Machine Leadings (ML) and others in the near future? How will these new technologies help Carbanio?
As we are a digitally operating business, keeping ourselves updated to the new-age digital tools like AI, ML, and Big Data is important to offer a seamless customer experience. We are already working on integrating these trends, you will soon see them go live. These technologies will help us constantly improve our services to help our customers better.
What is your future outlook for the online chemical business globally and in India?
The future of chemical business in India and the world looks quite promising. As we have already seen the importance of digital business during the pandemic, it has created a revolution. There is no looking back. The current and future trend is going to be digitization, hence, the chemical industry cannot be left behind. The Indian and global chemical market will soon shift to digital platforms for chemical procurement; this trend will strengthen the chemical industry and help them evolve.
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