Retail B2B start-up, Udaan, will be able to tackle competition for the coming fiscal, says Sujeet Kumar, co-founder of the company, in an interview with BusinessLine. He is confident that it will maintain a growth trajectory with a boost in FMCG and a focus on pharma and fresh segment. Kumar also shares his thoughts on industry trends and consumer behaviour. Excerpts:

In a recent interview, you said FMCG grew at 95 per cent for Udaan. What is your expectation for the next fiscal?

We think we have a good growth trajectory. We are focussing on building infrastructure for supply chain. Lending, technology, category building are focus areas to keep the momentum going. In the next three to five years, we plan to keep an 80 per cent year on year growth trajectory.

What are the behavioural changes in your customers’ post Covid?

Our potential customers realised that sourcing is possible online.

There was a pick-up even pre-Covid. The pandemic only escalated the speed of our customers becoming tech-savvy because it was impossible to get out during that time, but business for them had to go on. That helped Udaan grow much faster.

Udaan has a great hold in tier 2 and 3 cities. How do you plan to target metros?

We are committed to making small towns more efficient because it is mainly in the smaller regions where the distribution channels are broken rather than metro cities.

It is these places where distribution is not organised. We believe in economy of scale.

Over 70 per cent of our growth comes from there and we have invested more on our infrastructure and last mile. We reach out in over 900 cities and cover over 30,000 PIN codes, and we plan to grow to 14,000 to 15,000 PIN codes, gain more market share and expand to metro cities.

Secondly, we are looking at increasing our bandwidth and order size from the existing customers itself before expanding swiftly.

What are your plans to sustain your growth trajectory with big players also competing?

Building a channel, where the cost of doing business is the least, will be only possible when selection, services and pricing are together.

A lot of brands have an existing distribution channel and sometimes on a large scale. Our distribution channel cost is already efficient from the very beginning because we started small scale compared to an existing brand.

Switching from a massive infrastructure and structure takes time. The management has to navigate their existing capital investment, relationships, employment and alignment which takes time because they will not create a new distribution channel.

We have proven that doing business on our channel is cost efficient, and on the other hand, they have to transition; this takes time and that gives us an edge.

So you are confident that in the future, too, you can take on big players?

I have seen the journey even at Flipkart when we were compared to other players but in hindsight, we are seeing a growth in Flipkart where it is one of the largest players.

So I believe that if our solutions and offerings are relevant to the ecosystem, it doesn’t matter who is big or small, we will still create a mark.

This is where we have an edge — our offering, product and quality — we don’t have a legacy, so we have our challenges, and we find our own solutions to them. It’s a huge opportunity.

Also, it is a huge market and there is always space for more. There will eventually be three to four large players, but everyone has to fight for it equally.

Any new categories you want to enter in?

We have already entered into the pharma and fresh category; we want to expand more into those categories.

All these investments are new, but we are building capability to make these segments better. We don’t want to just tick boxes.

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