With record GMV of $13.4 bn, GeM catching up with Amazon and Flipkart

Crosses annual procurement of Rs 1 trillion in FY22

With record gross merchandise value (GMV) of $13.4 billion, the government’s five-year-old public procurement website — or the Government eMarketplace (GeM) — is slowly catching up with e-commerce behemoths like Amazon and Walmart-owned Flipkart.
 

In calendar year 2020, Flipkart, excluding Myntra, had clocked a GMV — total value of merchandise sold — of around $12.5 billion, while Myntra clocked $2 billion. Amazon India clocked a GMV of around $11.5 billion during the year, according to a report from wealth management firm Bernstein. The current financial year’s numbers are expected to only grow further.

GeM Chief Executive Officer Prashant Kumar Singh said while the comparison between GeM and e-tailers is often discussed, the ecosystem, however, differs.
 

“Our model and ecosystems are different. We have the government as our buyer on one side. As a result, the nuances are different. We have to follow general financial rules. They aren’t comparable,” Singh told Business Standard.
 

Another senior government official said at present, the GMV of Flipkart and Amazon is higher than GeM’s. However, GeM is growing faster than these marketplaces. “Over some years, GeM will overtake Flipkart and Amazon in value terms,” the official said.
 

Independently, in an official statement released by the government, GeM has emerged among the top five e-public procurement systems globally, with a GMV of $13 billion, and more than 4 million suppliers and 59,000-plus buyers.
 

Goods and services worth more than Rs 1 trillion were procured on the portal by the end of March, witnessing a 160 per cent jump, compared with last year, as buying from various central government departments and public sector entities increased. An increase in buyer interest can be attributed to 3,000 enhancements in the features and functionalities of the portal.
 

“It’s a typical learning curve. Buyers are initially hesitant. Once they start seeing the advantages, more people purchase. As far as states are concerned, we are lagging. But starting April, we can do the engagement properly,” said Singh.
 

“Happy to know that GeM_India has achieved an order value of Rs 1 trillion in a single year! This is a significant increase from the previous years. The GeM platform is especially empowering micro, small and medium enterprises (MSMEs), with 57 per cent of order value coming from the MSME sector,” Prime Minister Narendra Modi tweeted.
 

The number of orders has surpassed 3.15 million in the current financial year (2021-22, or FY22), with a growth rate of 22 per cent. Procurement value is expected to cross Rs 1.5 trillion in 2022-23. GeM was launched in August 2016 as an end-to-end e-marketplace to facilitate transparent, efficient  e-procurement of commonly used goods and services required by the Centre, states, and public sector undertakings. It is a government-to-business platform.
 

Services have also been a major area of growth and contributed to a fourth of GMV in FY22, representing around 44 per cent increase in the number of services, compared with 2020-21.
 

“The number of categories of services has almost doubled in a year. Today, any service required by the government is available on GeM — be it a drone survey or a Cloud service. There are close to 150,000 service offerings,” said Singh.
 

Procurements worth approximately Rs 43,000 crore were done by central public sector enterprises (CPSEs), which roughly translate into 43 per cent of total GMV on GeM and 508 per cent growth year-on-year. Singh further said that states have a 30 per cent contribution to total GMV. Procurement by CPSEs rose multifold to Rs 43,000 crore. GeM offers over 1,868,886 products and over 908,157 sellers and service providers. More than 10,000 start-ups have registered on the platform.
 

As far as opening the GeM portal to consumers is concerned, Singh said having a ‘helpdesk’ will be crucial. “We will also have to look into refunds and returns (of items). Technically it is possible, but we will first have to do a small pilot. The plan is on, but the important thing is when we get ready and get the mandate,” added Singh.

With inputs by Peerzada Abrar