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Digital disruption: Fashioning a supply chain tech platform for SMEs

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By Srinath Srinivasan
Founded by Dhruv Kapoor and Ankiti Bose, B2B fashion tech startup Zilingo Technologies has used the growing mobile and data penetration to envision a technology platform for SMEs. Using technology, it has been able to broaden the sourcing base for fashion-lifestyle companies, and enable financing where banks and NBFCs were not ready to finance these businesses, and to provide additional services using data in the form of intelligence and analytics.
Currently, Zilingo connects 60,000 businesses and 6000 factories globally, with nearly 50 factories from India and a collective merchant count of over 50,000. Valued at $970 million, it has raised $308 million till date with Series D funding from Temasek, Sequoia Capital and Singapore Investment Fund and EDBI.
“As we started we had the option of integrating with third party technology, but our fundamental aim was to build a long term business and so it made sense for us to build our own proprietary tech infrastructure,” says Kapoor.
Zilingo targeted South East Asian markets to start with. “South East Asia had a massive middle class population, almost half a billion people and a high GDP per capita. They were also ahead in terms of mobile connectivity. There was also a large number of small and medium business owners,” says Kapoor. However, there were not enough people building technology to tap the potential of this demography and talent. Eventually, what started in Thailand is now spread across Singapore, Bangkok, Manila, Jakarta, Vietnam, Bangalore, Mumbai, Sydney, New York, Los Angeles and San Francisco.
“All the things that big global brands take lightly were not accessible to SMBs. Given that, we addressed the consumer side first with a B2C platform. When we saw growth, we also went to the B2B side,” says Kapoor. Six months after stepping into the B2B side, it realised that the majority of the company’s growth came from solving the problems faced by factory owners, small business owners and the raw material providers.
The B2B platform lets raw material providers sell to factories, factories to sell to wholesale distributors and they in turn to the retailer. Zilingo gets a margin of 10-30% on commission basis on each sale from both its B2B and B2C platforms combined. “This platform is augmented by key capabilities like logistics integration, digital payments and financing,” explains Kapoor. “We then set up offices in the USA and Europe, to enable discovery for the end brands.”
The growth also led to the acquisition of Colombo-based SaaS startup Ncinga by Zilingo. “In the middle of 2019, we crossed $100 million monthly sales mark through our platforms and at the same time we were embedding deeper with factory and fabric mills,” tells Kapoor. “Ncinga’s technology helps factory owners manage throughput, efficiency and defects. Ncinga has made this complex process simple by using a bunch of tablets in the start, middle and the end of production lines,” explains Kapoor. This allows line managers to enter throughput, find defects and restructure styles as needed. The data collected from these lines is processed using Ncinga’s software. Zilingo today integrates this technology in its series of solutions. “As we scale Ncinga, we can use the insights to help factories get better financing,” tells Kapoor.
Going forward, Kapoor expects IoT sensors to better Ncinga’s technology. He envisions Zilingo to solve all the problems from the time a raw material is produced till the time an end brand sells the final product, and not just become another e-commerce entity in the future. “We have constantly found that building a B2B platform is much harder than building a B2C platform,” says Kapoor, talking about the challenges ahead.
To view the article on Financial Express click here
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