Explained: What’s GeM 4.0 for MSMEs; how its seller count nearly doubled in five months from 10 lakh

The portal had crossed the 10-lakh seller milestone in January this year — in four and a half years since its launch in August 2016 — and is likely to add another 10-lakh count in around a month or two – approximately six-month duration.

Explained: What’s GeM 4.0 for MSMEs; how its seller count nearly doubled in five months from 10 lakh
DPIIT in July this year, announcing the advisory council, had said that the ONDC is expected to “digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers."

MSME seller count on the Modi government’s B2B e-commerce portal Government eMarketplace (GeM) has grown 5x from 3.87 lakh sellers as of June 11, 2020, to 19.17 lakh as of Tuesday, as per the statistics on the portal. In sheer numbers, the public procurement marketplace has achieved quite a size since its launch in August 2016 to bring transparency and efficiency to the public procurement process. The portal had crossed the 10-lakh seller milestone in January this year. While that happened in a four-and-a-half-year period, the portal is expected to add another 10-lakh count in around a month or two – approximately six-month duration. The speed at which the portal is growing its seller base is significant.

“Government has created this digital platform which is no way less than any international platform in India. Moreover, the government in itself is a very large market for MSMEs. This market size is also nowhere near to private e-commerce portals, it is far beyond. If you compare the actual business transactions on GeM and other portals, it would be much larger on the former. Hence, with the government and its enterprises being such large buyers, of course, this is a world of huge opportunities for MSMEs,” Rajiv Chawla, Chairman at the MSME association — IamSMEofIndia told Financial Express Online. Moreover, since it is also governed by bidding and tenders instead of a single price listed for a particular product, sellers are more empowered to grab the order, according to Chawla.

Out of the existing MSME sellers on GeM, nearly 7 lakh are micro and small sellers (MSE) with a share of 56.17 per cent in the order value currently. MSE seller count had grown from around 1 lakh sellers in June last year and over 4.71 lakh in January this year. The portal may see a significant jump in overall sellers as the government is integrating it to the Railways procurement that would likely see around Rs 50,000 crore of annual procurement, Commerce Minister Piyush Goyal had said recently in a GeM review meeting.

Buoyed by the growth of the platform, GeM had launched a revamped version of the marketplace dubbed GeM 4.0 with “sweeping changes that will go a long way in improving the buying and selling process,” the introduction to the portal read on GeM. In fact, there is work underway for the 5.0 version but the rollout will likely take some more time.

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How GeM 4.0 is different from its previous avatars?

Unlike previous ones, buyers are able to collate multiple orders of the same product for different consignees across multiple organisations let’s say in the same ministry in a single bid for added cost-effectiveness, according to GeM. Also, buyers are able to place a single order for quantities delivered over a period of time, let’s say a year or two, with a defined schedule. This provides “the benefit of bulk procurement with the flexibility of deliveries,” according to the GeM portal. Among other market enhancement features included

  • NLP-based search engine for better research of the most relevant products.
  • Revamped user interface and user experience design.
  • Ease of payment through integration with banks and ERPs for timely payments
  • System generated names of products to prevent uploading of products in wrong categories
  • Separate corner for CPSEs and large buyers to display relevant information specific to their procurement needs.

“It (GeM) has certainly benefited MSMEs but now it is a question of how MSMEs want to upgrade themselves and understand the digital world now. Earlier, the government used to be behind entrepreneurs in technology adoption, etc., and would take more time to understand. But in the last decade, I have seen that government is far more technologically equipped in many of its operations. It is time for entrepreneurs to understand the digital future and GeM is the digital future for MSMEs. They have the market of entire government purchases on their fingertips,” Chawla added.

What are the changes in bidding and rating systems?

GeM 4.0 provides item-wise and consignee-wise bidding for procurement and ease of access. The bidding processes for L1 (between Rs 25,000 and Rs 5 lakhs) and above is revamped to make the bidding process more transparent. Moreover, the sellers have to deposit one-time caution money for procurement in L1 up to Rs 5 lakhs to ensure discipline and compliance. The rating system is also revamped to include rating-based filtering of sellers.

What about customer support systems?

The portal has a revamped incident management policy with AI chatbot-based customer support systems. The portal displays information on quantity procured, the amount spent, terms and conditions for major procurements, etc. The CRM system is also improved for tracking the grievances through customer lifecycles.

How to register on GeM?

The prerequisites for seller registration on GeM include company type including proprietorship, firm, company, trust or society, etc; Aadhaar or PAN of the user; address along with bank account details of the company and email ID. Documents such as CIN, PAN, DIPP, UAM, ITR details may also be required.

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