A new age unicorn

Infra.Market is a new age unicorn. But with a twist. Its business focusses on the supply of construction materials that have been around for a very long time.

The founders, Aaditya Sharda and Souvik Sengupta, claim that earlier online platforms dealing with similar products were essentially price discovery platforms, whose business model did not complete the cycle of discovery, sale and delivery. Their focus has been on completing the whole transaction on their platform. To supplement their online offering, they also have both dealers and physical stores, to a certain extent. 

They have also gone beyond the model for sales followed by, say, Amazon and Flipkart, which act as a platform for the discovery and sale of all kinds of consumer goods. While in India foreign-owned platforms have a government-imposed restriction on stocking on their own account, and making a profit on the sale from the platform’s stock, that’s what they do to a large extent globally.

But Infra.Market has gone one further step in backward integration, by setting up manufacturing units and factories to make the products, like tiles or AAC blocks, to sell under their own labels to their customers. As for their core product of ready-mix concrete, they own the mixing plants, but don’t, at least as yet, make their own cement!

It is very creditable (and no one else has done it on this scale) that in 8 years they have achieved sales of close to Rs14,500 crore, and are profitable after tax. And are now ready to face the public markets.

However, there are questions that remain. First, the big grocery chains worldwide have toyed with private-labelled goods for a long time. And in the West, it was once thought that private labels would easily surpass established packaged food and FMCG brands.

But globally the experience has been that private labels attain a certain small, steady market share, but they cannot grow beyond that. In addition, experience has shown that sellers or retailers, while having their own skills, are really unable to compete with the established brands that have long mastered best manufacturing practices, to produce quality goods at the lowest prices. Will Infra.Market prove to be the exception?

Also, while the company’s growth and sales are very impressive, it is not clear what might happen when the really big boys in steel, cement, paints and other building materials decide to follow the same route. What if they decide that they too should follow Infra.Market’s strategy to add meaningfully to their sales?

Only time will tell. But in meantime, the public markets are sure to give Infra.Market a rousing welcome.