More E-commerce Possibilities for Georgian Construction Sector, an online platform launched in February this year, claims to be an innovative web portal providing a multitude of services to the construction sector in the country by offering an e-commerce system of construction products while connecting buyers and sellers with each other, directly.

Aiming to increase the volume of sales of sellers and simplify the process of trade, is there to assist architectural, design, construction and inspection companies to buy or sell any construction related product with a fully automated process, also giving companies the chance to promote their products, expand their market reach and stimulate competition.

Additionally, the website provides an up-to-date catalogue of market prices, the Georgian and foreign distributors and producers operating in the sector, and the possibility to sell leftover construction materials. It also develops an innovative approach to calculating market prices according to the live transactions of trading. Chief Executive Officer and Co-Founder, Gigi Gachechiladze (27), talked to GEORGIA TODAY about his startup, the road he took to take the project from an idea to a successful venture, why he thinks is an innovative and unique concept as a platform and what his aspirations and ambitions are for the future.

“I decided to quit my job back in the summer 2015. I worked at the Georgian office of Foton, the largest Chinese company producing automobile, construction and agricultural equipment. When I quit, I made a list of what really interested me, and which distinct road I wanted to follow, and in that process, I came up with the idea to create a trade platform. It came from a visit to a supermarket where I saw several people making notes on their phones and iPads, talking to the supermarket staff. It turned out they were the representatives of product producers, the ones we call pre-sellers, or in other words, sales managers, taking orders. It hit me that it would be both a lot more time and financial-resource efficient to create an online platform which would link product producers, importers, suppliers and buyers with each other. I shared the idea with Sandro Tavkhelidze, a friend of mine, who has a small hotel and a shop in Bakuriani and almost on a daily basis encountered the problem of being out of supply of various products since they were brought by retailers themselves. He was interested and had experience in web business solutions development,” Gachechiladze said.

After conducting thorough market research, Gachechiladze says it turned out that importers were not ready to replace the pre-sellers with services directly operated via an online platform, as they thought these human resources were extremely important for the companies. They were afraid to lose sales. He and Sandro tried cooperating with smaller offices and importers; placing office supplies on the web to buy and sell, and quickly achieved significant results.

“This was the idea we brought to the one year Business Incubator program, offered by the Georgia’s Innovation and Technology Agency, which helped us to develop our project from an idea to business, providing trainings and consultancy together with an actual work place, and offering a GEL 5000 small grant for the prototype. We were joined by a technical team that worked on developing our web-platform,” Gachechiladze says.

In summer of 2016, the Infrastructure Construction Companies Association (ICCA) expressed interest in the online platform. One of the major problems ICCA member companies faced were leftover construction materials after the construction process. Another was that there had been no research based on which the budgets for construction materials would have been made, as they participated in government tenders. “The market price availability is crucial,” Gachechiladze told us.

“Every year, 34% of state tenders in the construction sector are abolished by the state procurement agency due to various reasons, the major one being inadequacy of prices provided, with no digital and up-to-date market research conducted in the country. Our idea was to focus on the construction sector segment, adding market price research as a component based on trade transactions, which enables us to see the overall picture of the market and create the right algorithm to enlist the right products together for an accurate result,” he said.

Along with ICCA, the project was joined by a budgeting company, Modulator LTD, which assists in market price research, and worked on creating the algorithm. The first results of the market price research will be announced in October.

“Of course, we’re not yet competing with such giant wholesale suppliers’ platforms as or Amazon Business, but we have the ambition to become leaders in the region. The combination of trade and research solutions is what makes unique and innovative, as it provides anyone interested in information about Georgian market prices, for concrete, for example, and provides the option of running market research without scouting. This is one of the key advantages of our platform,” Gachechiladze told us., is now focused on serving corporate clients and boasts 12,000 listed products, 88 suppliers and 87 buyers registered on the portal.

“Nothing was easy, but it was worth it, since we’ve learned an incredible amount along the way,” he added. “When we announced early this year that we would have 1300 clients by the end of the year, it was ambitious, but on the other hand, having a bigger budget would naturally help us more.”

He says they have set more realistic goals for the future. One of the main difficulties, he states, was collecting together electronic product catalogues from suppliers, since many companies in Georgia are still working with printed ones.

As such, some of the companies on the platform have yet to provide a catalogue. In addition, some of the companies are reluctant to have their products listed on the site when they have their own company sites, not realising that offers a new chain of trade and a possibility to expand. “Persuading the companies to meet with our representatives is quite challenging sometimes, although once they get what we’re offering, their interest grows and we can see the positive trend: the companies we’ve registered are getting more and more active, and we’ve already had more than 125 transactions through our site,” he says.

For Gachechiladze, the benefits of online trade in general, with the three major components of saving time, offering product market research and receiving the best price available, combined with strong online security, are obvious. “Online trade is the future,” he says.

When asked what he thinks is needed to change the mindset of suppliers and producers to better rely on online commercial platforms, Gachechiladze says it’s a matter of trust, and that trust still needs to be gained.

“As a startup, we were quite fast paced, wanting to do as many things as we could before our potential competitors and maybe that resulted in losing some important things in the process,” he says. “You have to choose your team very carefully, one that can get you better results in the long term. Hurrying and making the right decisions simultaneously is very difficult to achieve, and you need to work on yourself in that regard. Setting priorities right and choosing the right methodology for your business are also important, as is controlling your emotions, which may very well top the list,” he says.

Of the future, Gachechiladze says, “I’d be the happiest man in the world to reach all the goals we set in our business plan, say, expanding our web platform regionally, which we see as our next step, registering international suppliers to the platform, and then strengthening our position globally”.

“The uniqueness of the platform lays in the fact it’s a combined product ensuring all the key players and actors in the construction industry are involved,” Ana Sabakhtarishvili, ICCA Executive Director, told GEORGIA TODAY. “At present, we only have construction materials listed, and we’re looking to add the lease/rent/buy/sale of construction equipment, as well as labor cost calculations for construction companies and our beneficiaries, as we see it to be a platform that any company in the construction industry or even the state institutions, could use. For ICCA, this web platform is important, as our member companies will be receiving precise and accurate information on the market prices, saving them time and financial resources,” she said.

The online platform is a joint project of ICCA, Wesale LTD, and Modulator LTD.

Nino Gugunishvili

14 August 2017 20:56