Engineering major Larsen & Toubro Ltd (L&T) hopes to turn its new e-commerce venture, L&T-SuFin, into a “multi-million dollar business,” senior executives said at the official launch of the platform on March 7.
L&T has launched a business-to-business (B2B) e-commerce platform which aims to create a marketplace for manufacturers of industrial products and services and help buyers in procurement. L&T SuFin has also partnered with banks and non-banking financial companies that will offer financing facilities to buyers.
“It can be a multi-million business in some years. We have a timeframe in mind but I wouldn’t want to talk about it right now,” Anup Sahay, Head Corporate Strategy and Special Initiatives at L&T told reporters at the launch.
The platform will leverage on L&T’s digital and technology capabilities and its presence across infrastructure segments to provide a platform that could simplify the value chain for small and medium enterprises. L&T will operate as an aggregator for products and services, and earn 1.5 percent transaction on deals. The company will also bring together financiers and buyers, and earn a fee on it.
Sahay said that L&T’s decision to start this business was based on the group’s decision to grow its digital offerings, the significant market size for industrial products and services, and the lack of a fully integrated B2B e-commerce platform for construction and industrial products and its financing.
The L&T-SuFin currently has over 40 categories of industrial products, as well as financing and logistics support from partners that have been vetted by the company.
“We will be expanding within the next 18 months or so to double the products and services available. We're also looking at one or two other revenue streams related to this,” Sahay said.
The platform will provide working capital to micro, small and medium enterprises from a group of financing partners.
“We are not using our (L&T’s) balance sheet to finance. It will be done exclusively through our banking and NBFC partners. We have some fee sharing arrangement with the institutions with whom we tie up,” said Bhadresh Pathak, Business Head, L&T- SuFin.
L&T has identified its digital business as a growth business as the conglomerate works towards increasing the contribution of services to its total revenue. Besides L&T-SuFin, the company has also launched L&T EduTech, an ed-tech platform that will focus on engineering and technology knowledge.
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