·
eB2B
platforms have been able to effectively resolve some of the pressing pain
points such as higher prices, no credit option, untimely delivery, and low quality
of products, among others.
·
With
immense headroom to grow and led by multiple favorable factors, eB2B to reach
$90-100 Bn GMV by 2030
Bengaluru, 31 August 2022: At 84%, India holds the largest share in general trade
when compared to developed nations, including the US and the UK. In our
country, which has over 8000 towns and 665k villages where the bulk of the
population resides, there are multiple barriers to organized brick-and-mortar
adoption. It is the unorganized GT channel that is driving India's retail
market and will continue to grow, doubling in size from $0.7 tr to $1.4 tr by
2030, finds a report by Redseer Strategy Consultants.
It is further projected that
the B2B GT opportunity in India will reach ~$1.2 trillion by 2030, with eB2B
coming up as a promising digital procurement solution.
India's B2B eCommerce
market is one of the fastest growing in the world and international benchmarks
indicate that the eB2B market will reach $90-100 Bn GMV by 2030 influenced by
multiple favourable factors.
The report observes that
while it is at an early stage right now, given low adoption in lower city tiers
and small stores, eB2B is emerging as a strong digital procurement solution.
The report also sheds light on how eB2B platforms have been able to effectively
resolve some of the pressing pain points, such as higher prices, no credit
option, untimely delivery, and low quality of products, among others. Credit,
efficient & high supply quality of products, and FoS assistance are some of
the critical offerings of eB2B platforms for Indian retailers. eB2B players are
solving these challenges via a more streamlined supply chain.
“Retailers,
brands and manufacturers have realized eB2B market’s potential and are betting
on it to shape the way they do business. While manufacturers have limited
competitive threat, the eB2B channel is also helping retailers and brands solve
multiple problems in their day-to-day business. India’s eB2B market has scope
for multiple models but, multi-category play with wide category coverage and
national coverage is likely to win. eB2B is projected to reach $90-100 Bn GMV by 2030 owing to a humongous
opportunity,” said Mrigank Gutgutia, Partner at Redseer.
eB2B has already captured a
fair wallet share of the offline market, and retailers are confident about
increasing their spending soon. The report further suggests that approximately
50% of the non-users are willing to shift to eB2B platforms in the coming year.
India's eB2B market is
comprised of multiple players who differ in terms of their city presence and
the range of retail categories they cover. While the regional market is
generally restricted to metros and top Tier 1 cities, the national market implies
a presence across the country. Owing to higher opportunity size, adoption and
engagement, multi-category national players are best placed to win in this
market. With these advantages, among eB2B players, Udaan is emerging as the
clear leader, followed by Jiomart.
In order to access
underserved markets, brands are turning increasingly
to eB2B, either as an addition to their current distribution network or as a
replacement for ineffective traditional distributors.
Even established brands
with their own eB2B initiatives do not consider 3P
(Third party) eB2B a threat, given the difference in scale and significant
value add of 3P eB2B. For manufacturers, traders, dealers, wholesalers, and
retailers, implementing a digitized and automated supply chain ecosystem using
platform-driven techniques has become essential for business growth. With
better retailer-serving capabilities at a wide scale, the eB2B platforms could
assist both established and emerging brands in achieving the needed scale.
At scale, eB2B platforms
are likely to have an ROI of 50%+, much superior to offline retail as well as
cash & carry formats. In particular, the ones with multicategory revenue
have a better margin. While the EBITDA margin post VAS revenue stands at 3-5%
for the eB2B grocery vertical and 5-7% for the discretionary vertical, under
multi-category it stands at 6-8%. However, getting the category mix is critical
to boosting margin profiles.
The future will see a shift
from unorganized trade to organized digital trade while rallying for emerging
brands to scale in India, making eB2B a de-facto channel for brand marketing
& ad spend, and a holy grail for retailer insights & data intel. All
this and more will enable stable growth for eB2B at scale.
About Redseer Strategy
Consultants:
Redseer Strategy
Consultants is a leading strategy consulting firm. Founded in 2009, Redseer
works with new-age consumer-focused businesses and offers growth advisory,
digital strategy, and investment thesis. The company is a thought leader in the
Internet economy space and is the most widely quoted consulting firm in the
media.
The company boasts a 90% +
market share of new-age IPOs. Zomato, India’s first major consumer tech IPO;
GoTo, one of the world’s largest consumer tech IPO, Nykaa, Paytm, Cartrade, and
Delhivery are other noted IPO engagements of Redseer. The company enjoys more
than 50%+ market share in the new-age deal advisory and a lion’s share in the
strategy consulting space.
Redseer sees itself as a
band of strategy consultants who have disrupted the 100+-year-old management
consulting industry and, in the process, has emerged as the most sought-after
consumer business-focused advisory firm. The company is known for its
proprietary methodologies, deep consumer understanding, high-quality research,
and entrepreneurial mindset. Run by the youngest set of consultants, today
Redseer has a strong presence in India, the Middle East, Southeast Asia, the USA, and the UK. The company is headquartered in
Bengaluru and has a formidable team of 200+ consultants in 7 offices across
India and overseas.
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