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India: Restitching Surplus Stock: Online B2B platform XSTOK auctions surplus textiles to small dealers, garment makers

Onlinebusiness-to-business platform XSTOK seeks to provide price transparency in alargely unorganised market where small dealers and garment manufacturers fromAhmedabad to Guwahati grapple with the challenge of sourcing fabrics atreasonable rates. "We are working towards removing the inefficiency whichexists in the space. The difference created by margins charged by theintermediaries is close to 65% in the offline world," said SanjivKhandelwal, founder of XSTOK. 

Since the launch of the e-auction platform for ex-stock andsurplus textiles by the manufacturers, the startup has completed 18 auctionswith a transaction value of Rs 1 crore in two weeks. The suppliers for theauction included textile manufacturers such as Garden Vareli, Bombay Dyeing, denimmaker Arvind, and towel manufacturer Welspungroup. "We see a huge demand from dealers, distributors,cutters as well as the hospitality sector who want to place bulk orders,"said Khandelwal, who incorporated the company in January 2015 with cofounderMihir Shah, former director of TMT Investment Banking. 

Ankit Rungta, who owns Vadodarabased businessElite Decor and is enrolled for a bid on the platform, said the platform issimple to use and entails a verification call from XSTOK to start transaction."As a new business, it has helped me save time and money to stock myinventory," said Rungta. 

While the platform helps match supply and demand, thechallenge lies in ensuring consistency. "It is an innovative model thoughit is imperative for the platform to maintain a steady concentration of dealsfrom leading manufacturers. On the buyers' end, it depends on how tech savvythe retailers are and what their awareness level is to tap into thebusiness," said Pragya Singh, associate vice president at retail adviseryfirm Technopak. XSTOK charges buyers an initial registration fee and suppliersa transaction fee of 3-5% on each successful transaction. The average ticketsize of goods for auction varies from Rs 1.5 lakh to Rs 10 lakh, depending onthe consignment. "The process of bidding has helped suppliers with 15-18%price improvement," said Khandelwal. 

With 2,500 buyers and 100 suppliers on its platform, thebootstrapped startup has also received queries from East African countries.

Source: The Economic Times, India (July 24th  2015)

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