The government e-marketplace (GeM) is an end-to-end procurement system developed by the Directorate General of Supplies and Disposals for the purchase of goods and services of common use by government buyers. The e-commerce platform is in a league of its own. It is gaining momentum among buyers and sellers, since it leads to transparency as both the parties can keep a tab on things.
By Abid Hasan
The government e-marketplace (GeM), which started operating in 2016, is presently clocking an annual revenue of around ₹ 15 billion, in which the share of IT products and electronic equipment is around ₹ 7 billion. These figures indicate that this e-commerce platform is playing a vital role in boosting the electronics industry. “The purchase of electronic products on this platform is encouraging the development of a Make in India ecosystem. By January next year, about 20 per cent of the electronics that is purchased through MSMEs at present will be bought at the GeM,” said one of the top executives of GeM to Electronics Bazaar on condition of anonymity.
Electronics always accounts for 33 per cent to 34 per cent of the total buying done on GeM. Currently, there are more than 1000 different electronic products that are listed on the GeM site. Those managing the platform hope to procure more in the future.
“Medical electronics is seeing good growth, and it will clock revenues of ₹ 6-7 billion per annum. The purchases will go up immediately, within the next quarter. Around 30-40 per cent of the purchases made by the government are for electronic equipment, and all of these have to come through GeM,” the source said.
Private Participation
In order to get the leverage out of government’s e-commerce business, different electronics and technology companies are rolling out their services to the GeM platform. It can be recalled that Keysight Technologies also tied up with the platform and most of their products and solutions are now available with GeM.
Sharing about this development, Sandeep Kapoor, Marketing & Business Development Head, Keysight Technologies, India said, Government eMarkets a vision of the Honourable Prime Minister Shri Narendra Modi, to facilitate online procurement of products by various government departments, organizations and PSUs.
He added, “Our plan is that every Keysight product is easily available for purchase. This allows the customer to access our comprehensive product portfolio and our expertise in test and measurement to get the flexibility to design, characterize and test electronic devices from R&D and design verification through high-volume manufacturing.”
GeM’s next bet
The core focus of those administering GeM is to add on more products and services. Apart from listing the products, the organisation is keen on transparency in decision making. The idea is to show all the stakeholders the entire decision-making process on the Web.
The platform is working on a commission based business model, and 2 per cent of the value of every transaction goes to GeM. Till now, the platform hasn’t collected any revenue because it has only recently entered into an agreement with the managed service provider (MSP). “GeM will start collecting its commissions from November 2017 and aims to be profitable within one year,” said the source cited earlier.
There are high hopes for the platform, with administrators being confident of doing an annual business of ₹ 500 billion within one or two years. Once the MSP is on board, the business transactions will become very high. Currently, the GeM is still at the POC (proof-of-concept) stage.
Taking on the likes of Amazon and Flipkart
Though the GeM platform will cater to a very different target audience, this government project will also compete with e-commerce giants like Flipkart and Amazon in certain ways. The latter are doing business with end consumers while the GeM is more of a government-to-business platform. However, the GeM will attempt to surpass the big e-commerce giants in terms of efficiency and productivity.
