B2B e-commerce is largely a two-player market including Udaan and Reliance, as other players like Flipkart Wholesale, and Amazon Business are relatively small in this space, according to the analysts at BofA Global Research.
Analysts don’t expect significant competition from B2C e-commerce companies in this segment, as B2B e-commerce requires fundamentally different capabilities including logistics, sourcing, credit, collection infrastructure, etc.
“As per our industry discussions, there has been limited activity by Flipkart in this space mainly due to its focus on its other businesses. For Amazon too, the scale-up of its B2B offerings has been slow as it is present in just four cities,” Sachin Salgaonkar, Payal Gupta, Priyank Mahajan, and Pritesh Sonar, analysts at BofA noted.
Flipkart’s strategy
Flipkart is competing in social commerce with Meesho on the long tail supply and unbranded portfolio in tier-2+ cities. It is also investing in its quick commerce segment where it is pushing Flipkart Quick, the company has revamped its 120 minutes delivery to 45 minutes delivery in line with other players in the market.
eB2B or B2B e-commerce players address the challenge of fragmented demand by consolidating orders from retailers for brands. This gives manufacturers better visibility on demand and helps in inventory management. B2B e-commerce channel also helps in increasing reach of manufacturers, thus helping them get better pricing.
Udaan and Reliance in numbers
Udaan is noted to have a presence across over 900 cities, over 13 million app downloads, and 4,38,000 monthly active users. The company has a brand relationship with more than 300 top brands across categories and handles a portfolio across staples, FMCG, pharma, lifestyle and electronics.
On the other hand, Reliance (JioMart/Ajio Business) has a presence across 3,500 cities in the fashion category, over 30 cities in grocery, and 1,900 cities in pharma.
In terms of downloads, JioMart Partner has 4.3 million downloads, Ajio Business has 3.4 million downloads and Netmeds Wholesale has 3,00,000 downloads. Reliance has brand relationships with JioMart and Ajio retailers, their own brands. Reliance’s B2B e-commerce portfolio includes staples, FMCG, and lifestyle.
“Monetisation of B2B e-commerce players remains at early stage currently with gross margins in the range of 4-5 per cent. The EBITDA margins are expected to improve by 6-8 per cent in the longer run led by improvement in core business and uptake of high margin value-added services, in-line with global value/mass retailers,” the report added.
B2B e-commerce in India is still at a very nascent stage (less than 1 per cent of retail B2B market). However, analysts at BofA expect retail eB2B market to reach $46 billion by FY26 with penetration of 4 per cent.