Tech

Udaan, Alibaba of India, is one of the antidotes needed in the countryside of India.

All the bubbles that are making daily noise about B2C commerce in India, especially the recent attention-grabbing reliance tactics, may not be aware that the actual action in Indian e-commerce is actually elsewhere. Maybe.

The space is a huge B2B world, where SMEs and large companies buy and sell each other. This is the kind of activity that made Alibaba in China a huge thing today.

Join Udaan, who aims to empower the way of running a pop Kirana shop (neighborhood grocery store) with about 12 million moms. And now, when the pandemic struck the Indian countryside, Udan showed that it was a future supply chain wonder urgently needed by the hinterlands.

Kirana Savior

The Kirana Store is where Indians shop. The Kirana Store, which primarily sells food and groceries, has chips in approximately $ 650 million in India’s $ 1 trillion retail market. This great demand for the Kirana store is where Udan threw its nets. Some say that B2B opportunities are 7.5 times that of the B2C online grocery market.

Amazon, Reliance, and Flipkart continue to headline the latest schemes to attract Indian grocery and Kirana customers, but Udan quietly, almost overnight, has become the country’s largest food player. It was.

The secret to Udan’s success is to solve the problem of stocking Kirana stores in the Indian countryside.

For new Kirana store owners, business can be a nerve-wracking problem. Especially if you come from the hinterland. Procuring the right type of goods at the right price depends on belonging to the exclusive club of buyers and sellers who have built relationships for decades.

However, new players have little bargaining power because they have no cultivated relationships. If you don’t know the right wholesaler, you’re a toast. Even established store owners face considerable hurdles. They too have to rely on middlemen and wholesalers. In short, they often endure poor products and soaring prices.

Kirana store owners may need to track multiple vendors to get the best price and offer some of the fees for each item.

Therefore, procuring goods in this completely unorganized, fragmented market is a difficult and day-to-day task.
There isn’t even an official list of manufactured goods or even a catalog of old-fashioned industrial products that people can go their own way.

Given that these store owners have a hard time getting working capital credits and funds, they pay for the next rotation before customers buy goods from the store. You may be surprised that this process is not done at all.

Connecting India

Udaan believes that noise can be cut by digitizing the entire chain. So far, the smartphone app has helped 3 million retailers connect with 25,000 wholesalers, traders, manufacturers and brands in 900 cities.

The company also provides a secure payment platform and processes 60% of website orders through its own paid logistics operations. It has won thousands of brands such as Coca-Cola, PepsiCo, Boat Lifestyle, Micromax, HP, LG, ITC, HUL and P & G.

Perhaps the most popular service is the credit line. This helps merchants secure working capital because the Kirana store must spend to buy the product before selling it to consumers and making money.

India is notorious for the difficulty of gaining credit, especially as the majority of banks are state-owned on a collapsing balance sheet. Money lenders are known to charge 300% interest.

Udan’s success lies in his in-depth knowledge of how life in the Indian countryside works. It’s no wonder that the founder himself was a boy in a small town who had to learn directly about the incapacity that comes from lack of access.

Taking into account these three young entrepreneurs who worked in early Flipkart, it’s no longer surprising that Udan soared so rapidly.

Soling business

E-commerce as a business worked very well during the pandemic, and in doing so prospered in India. Udan’s service reflects its success. Food, lifestyle and electronics sales experienced an unprecedented boom last year.

Approximately 1,350 sellers across these three categories, from across India, but primarily from its much smaller towns and cities, recorded sales of over Rs 1 on Udaan’s platform last year.

700 of these sellers are in the food business alone, handling 8,000 tonnes of merchandise, making it the largest grocery store in India.

It’s a bright red market, with a 50% increase in buyers in the food category over the last six months and a staggering 500% sales growth in just two years. Analysts estimate that the total value of a product per month currently ranges from about $ 170 million to $ 200 million. However, the loss has grown to $ 103 million.

Some confusion

However, the rise in Udan is not without its concerns. The company appears to be facing complaints about inadequate customer service and rising credit defaults, which symbolize the long-standing hurdles the B2B market has faced. These need to be suppressed in order for Udaan to solidify its reliability.

Sharks are also spinning in the form of aggressive and well-funded grocery players such as Reliance’s Jio Mart and Flipkart Wholesale. There are also smaller hyper-local startups like Jumbotail that will eventually compete for the wallets of Indian shoppers.

Another concern is the lack of depth that ultra-scaling horizontal platforms such as Udaan can suffer from, and the difference between rivals who can more easily establish depth in popular segments.

Udaan is still an ongoing work, but it’s a sign of how Indian companies do things right.

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Udaan, Alibaba of India, is one of the antidotes needed in the countryside of India.

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