India’s eB2B market to reach $90-$100 billion by 2030: Report

India’s eB2B market is estimated to grow at a compound annual growth rate (CAGR) of 40–45 per cent from $5–6 billion in CY2022 to $90-$100 billion by 2030, according to a report released by Redseer Strategy Consultants.

The Indian retail market is worth $950 billion but is unorganised and dominated by general trade. While general trade drives 83 per cent of the overall market, its share is greater than 90 per cent in the grocery space.

However, the fragmented market puts retailers at a disadvantage when procuring from traditional channels owing to price opacity, slow/no deliveries, stockouts, and inconsistent product quality, among other challenges. According to the report, eB2B platforms offer solutions for these retailers through strategic brand partnerships and by eliminating intermediaries from the retail value chain.

“Platforms catering to retailers constitute 70–80 per cent of the eB2B market, while the remaining 20–30 per cent is occupied by platforms catering to wholesalers. Growth in this market will be led by deepening penetration among retailers across categories and geographies and a higher wallet share for eB2B platforms,” said Mrigank Gutgutia, partner at Redseer.

Going into the business model segmentation of the eB2B platforms, the report states that there are limited multi-category platforms with pan-India operations across categories such as grocery (staples and FMCG), electronics and accessories, general merchandise, fashion, and others .

Furthermore, in the last few months, many vertical platforms have been struggling, and across categories have shown limited growth, been flat, or declined due to challenging unit economics and prevailing macro-economic conditions, while multi-category platforms such as udaan have gained market share to reach 55–60 per cent of the retailer-led eB2B market, Gutgutia noted.

Specialised needs

The specialised needs of retailers across categories require eB2B platforms to be highly competitive across categories. Enabling low-cost distribution penetration and increasing the frequency of service in any location, discretionary segments such as clothing, footwear, electronics, home and kitchen, and FMCG boost the margins for multi-category platforms. Therefore, a multi-category approach is effective in optimising supply chain costs, as grocery contributes to higher fleet utilisation while discretionary categories enable better economics.

Moreover, the multi-category approach also helps optimise go-to-market (GTM) and credit costs. Vertical platforms focused only on grocery or discretionary categories have a tough time managing GTM costs because of their low retailer density, which results in lower throughput per foot-on-street (FoS), and because of low demand predictability. However, GTM cost optimisation for multi-category platforms happens through leveraging the same tech across all categories or portfolios, and further through the aggregation of sub-categories within portfolios.