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Startups head over to GeM to capture government as clients – ETtech.com


Startups head over to GeM to capture government as clients
Indian consumer internet companies are lining up to sell their goods and services in the government’s e-marketplace (GeM), as they look to gain access to a new set of consumers – the country’s central and state governments and public sector undertakings, among others, which was previously unavailable to them.

Online furniture and appliance leasing startup RentoMojo and Gurgaon-based home services provider UrbanClap are amongst home-grown ventures that have held multiple talks with GeM, and which, if they fructify, could see government departments and government-owned entities come on board as deep-pocketed clients.

GeM was set up about two years ago as a one-stop shop for the procurement of goods and services by the government ministries, departments, PSUs and other apex autonomous bodies of the central government.

“With respect to GeM, it consolidates service requirements on a common portal…As a principal it’s fantastic…We found them (GeM) to work like a private company. They have been able to, in a very short period of time, drive a lot of success,” Abhiraj Singh Bhal, chef executive of UrbanClap, told ET.

Bhal, who has had several meetings with GeM officials over the past few months, said that UrbanClap was in the process of listing its services on the marketplace. An email sent to GeM did not elicit any response at the time of going to press.

The developments come after Suresh Prabhu, union minster for commerce and industry under the previous NDA regime, had tweeted in December last year that India’s startups would have access to the government market, and to sell on the platform.

“We are still in an exploratory phase, but we continue to be very excited by the potential opportunities. The process is simple, and there is a great value proposition for both parties,” Geetansh Bamania, chief executive of RentoMojo, said.

Access to GeMwould give a huge boost to the country’s consumer internet companies that are looking to broaden their customer base. GeM has recorded gross merchandise sales of over Rs 25,000 crore, has over 233,000 sellers and services providers on its platform and has processed over 1.8 million orders till date.

Additionally, buyers from across 36 states and union territories (UTs) have bought on the platform, while 24 States and UTs have signed a formal MoU with GeM to adopt it as the core procurement portal in their respective territories.

“After various representations and deliberations on this issue, the government is moving in this direction, which can lead to substantial savings and increased efficiencies in its procurement of services,” an industry insider, who has been part of the deliberations, said on the condition of anonymity.

The idea is to cut down the government’s capital expenditure, by possibly leasing goods -white goods and vehicles – from startups, instead of buying them, with the latter also taking over the responsibility of maintenance, and thereby helping the government to ease its disposal costs.

The list of services being debated also include, hotels, airline tickets, bus and cab services.

In the past, both, state governments and the central government had largely procured goods and services through fixed rate contracts through the director-general for supplies and disposal (DGS&D), which was shuttered in 2017, National Informatics Centre, and other nodal agencies, before transitioning to GeM.

For certain categories, such as online ticket and hotel bookings, the government may agree to dynamic pricing, given that the categories are primarily based on inventory and demand and supply.

As part of the process of bringing India’s technology-focused consumer internet companies on board, the marketplace may also have to work on its technology architecture in the backend, in terms of providing API access to the startups.

Talks between the parties have also centred around general financial rules which determine the procurement process by certain departments of the central government, and which may need to be amended.

“We have been having multiple rounds of conversations, to understand where this bridge can be built. It is not a solution that the government alone can crack. The talks have to happen at both ends,” the source said.



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