Serai, the business-to-business (B2B) digital platform by HSBC that aims to ease global trade, is betting big on India as firms from the country account for over 7,000 of its 16,000 members, who are spread across 110 nations.
India is the largest contributor to Serai’s member base, and the platform, which went live in 2019, saw a 19 per cent month-on-month growth in Indian members since February 2020.
Says Vivek Ramachandran, chief executive officer of Serai: “The organic growth we have seen in India has been huge. We see ourselves continuing to invest in the market and it’s not just for SMEs (small and medium enterprises), we have been able to proposition targets in mid-caps and India has some of the world’s largest plants and largest apparel manufacturers using the platform.”
Of the 3,000 RFQs (requests for quotation), a feature on Serai’s platform launched in May, 31.9 per cent come from Indian buyers. Maharashtra, Delhi, Tamil Nadu, and Gujarat generate the highest traffic on Serai. And prominent Indian companies like Shivalik Prints, Radnik Exports, and Indian Designs are on the platform.
Though Serai missed the opportunity presented by the initial lockdown to onboard more businesses, it has, nevertheless, seen a huge uptick since from businesses that want to trade without having to travel long distances.
“We started this year with 2,500 members and we have grown almost 8-10x. There’s been a sea change in people willing to accept new technology. I think digital engagement, learning about people digitally, building digital relationships, that’s going to become much more important,” added Ramachandran.
Ramachandran a key factor spurring this shift is the emergence of smaller retail and brands, and new-age start-ups that are making consumers more aware of who makes the products they buy, and the condition in which these products are made.
At present, Serai is focused on the apparel industry, but will consider any other sector that is fragmented.
What makes Serai a unique case is that it’s a start-up from one of the world’s largest retail banks, HSBC, but does not use the bank’s platform to access customers and doesn’t cross-sell the bank’s products.
“The idea is to build a digital platform that can disrupt the way business is being done. It was a small group of us who proposed to the bank’s board that technology will change how businesses connect with each other and how they train each other and if that is the case, then why don’t we be the disruptor,” added Ramachandran.
He also added that this is new for HSBC — this is the first time it has set up a legal entity with an agreement to go beyond banking, but in a domain that the bank understands well.
“Noel Quinn, HSBC’s CEO sums it up very well. Serai is building a digital equivalent of HSBC’s brick-and-mortar franchise. Our objective is to simplify global trade,” he added.
When asked why not just invest in an existing start-up, Ramachandran said that there were no such businesses that were trying to solve the global trade problem.
“The basic problem why trade is so inefficient is everyone is trying to solve their little piece of problems, so the logistics sector is digitising the shipping sector, banks are trying to digitise financing, but the reality is that data is scattered and because buyers cannot get data on sellers, there is lack of trust and, hence, lack of trade. We want to make sure that that information is available in a simple manner,” he added.
Ramachandran says that a lot of demand on the platform is being driven by ESG (environmental, social and corporate governance) requirements. Many of the large buyers want to know who the suppliers in their supply chain network are and what kind of practices they follow. Serai has a Traceability solution that allows apparel businesses to track cotton and other raw materials going into their products. Through the product, businesses can trace the order flow throughout the supply chain, manage supply chain risks and collect data for compliance purposes.Ramachandran is also hopeful that in a few years the start-up ecosystem that’s so far been trying to solve local problems can also access this platform to solve global issues.
Serai, headquartered in Hong Kong, has a team of 120 people.