An Advertising Agency Considers C2FO’s Early Payment Platform as Its Most Dependable Alternative Source of Capital

India, after surpassing China as the most populous nation in the world, has emerged  as one of the most lucrative markets in the world. Besides the big brands that are eying a share of this pie,  there has been an explosion of homegrown brands that are gradually transforming into  household names. In such a scenario, the rapid penetration of the internet — the new age media — has opened up fresh and more innovative channels to reach the target audience with impressive specificity. 

This is where a new generation of advertising and digital marketing agencies come into play as marketing service experts to help brands with complete guidance regarding creative and data-driven strategies to reach their target audience with precision and efficiency. The Indian advertising industry was valued at around INR 670 billion in 2020 and is expected to acquire a valuation of INR 1253.2 billion at a compound annual growth rate (CAGR) of 11% between 2021 and 2026. 

As promising as these numbers may look, the current economic reality portrays a completely different picture. The world is facing the repercussions of recent global events like the pandemic and war. The markets are staring into a fast-approaching recessionary phase, and banks and governments, in anticipation of a possible rise in inflation, are hiking interest rates to hedge against an impending economic slowdown. And if these fears of an economic slowdown are realised, then it is the micro, small and medium enterprises (MSMEs) that are going to take a massive hit. An alternate source of capital seems indispensable for small and mid-size businesses to maintain a healthy cash flow, which would enable them to survive and grow in such circumstances.   

About Ethinos

Founded in 2010, Ethinos is a full-service digital marketing agency headquartered in Mumbai, Maharashtra. The agency thrives at the intersection of creativity, data and technology. Ethinos has grown considerably under the leadership of founder and Managing Director Siddharth Hegde. 

Cash flow challenges and economic slowdown

Siddharth highlights that the company’s journey has been an organic upward trend from the beginning, and he credits this growth to the spectacular projects he has undertaken for notable clients. However, amidst the glory and achievements, maintaining a steady cash flow has always been an unceasing challenge. Siddharth attributes this challenge to a combination of micro and macro factors that impact the overall supply chain health in this industry. These factors are crucial to the survival and growth of MSMEs.  

The advertising business usually demands a considerably higher operational expenditure (OpEx) than capital expenditure (CapEx). Besides the usual operating expenses like salaries, utility bills, day-to-day office needs and administrative financial commitments, Ethinos Global regularly engages in media buying for its clients. While the company has a 30-day credit arrangement from its media suppliers, Ethinos’ clients enjoy much longer payment cycles, ranging anywhere from 60 days to 120 days. The credit gap creates significant pressure on working capital availability. 

The macro-economic factors result from the unpredictable changes in the economic environment, such as rising inflation and the possibility of a global economic recession. As a result of these macro factors, banks and financial institutions are raising their interest rates globally, which naturally compels businesses like Ethinos to gear up for an economic downturn. 

To achieve exponential growth and shift gears for the next decade of challenges and opportunities, Siddharth knew that this cash flow issue had to be resolved. He was aware of how a steady supply of working capital could be critical in ensuring success during economic slowdowns or a dip in demand. This was when he was introduced to C2FO by HP.

The C2FO solution: an alternative source of capital

Since its introduction to C2FO, Ethinos has been accelerating payments via the C2FO Early Payment platform across more than one of its enterprise customers since 2020. Ethinos has been working with some of the biggest names in the industry, and since many of these brands are also registered as buyers on the C2FO platform, Ethinos as a multi-buyer supplier (MBS) on the C2FO platform has benefited immensely. Siddharth said that when Ethinos first started using C2FO, only 10% of its receivables were on the platform, whereas at present, almost 25% of its receivables are processed through the C2FO platform.

Siddharth is of the opinion that with unexpected changes in the global economy, C2FO’s Early Payments would prove to be a dependable alternative source of capital for his company and the MSME sector as a whole.

Ethinos usually runs data-driven marketing campaigns for its clients, and fintech solutions like C2FO’s almost always excite Siddharth. He emphasises C2FO’s seamless user experience and data-driven approach towards cash flow problems to help the company make informed decisions about its finances. To add to this, he also appreciates the proactive team of supplier relationship managers (SRMs) that compensate for the missing human element in other fintech platforms.  

Ethinos is partnering with the top brands in the industry and successfully delivering value to its clients. This year, the agency expects to grow even faster to make a mark on a pan-India level. Siddharth considers C2FO as Ethinos’ preferred early payment solution partner and expects a larger chunk of receivables and share of wallet with C2FO in the near future.