By 2030, eB2B platforms are expected to account for 35-45 per cent of India’s total buyers,͏͏ or͏͏ around͏͏ 14-18͏͏ million,͏͏ according͏͏ to͏͏ a͏͏ recent͏͏ report͏͏ by͏͏ Redseer Strategy Consultants.
Decline͏͏ in͏͏ eB2B Buyer͏͏ Adoption:
As͏͏ of͏͏ 2023,͏͏ 12-15͏͏ per͏͏ cent͏͏ of͏͏ total͏͏ buyers͏͏ are͏͏ using͏͏ eB2B͏͏ platforms,͏͏ a͏͏ decrease͏͏ from͏͏ 25͏͏ per͏͏ cent͏͏ in͏͏ 2021.
The͏͏ report͏͏ stated͏͏ that͏͏ the͏͏ primary͏͏ reason͏͏ for͏͏ the͏͏ challenging͏͏ unit͏͏ economics,͏͏ which͏͏ has͏͏ led͏͏ to͏͏ a͏͏ scale-down͏͏ of͏͏ operations,͏͏ is͏͏ the͏͏ inability͏͏ of͏͏ B2B͏͏ players͏͏ to͏͏ optimise͏͏ key͏͏ costs͏͏ like͏͏ supply͏͏ chain,͏͏ go-to-market͏͏ strategies,͏͏ and͏͏ credit.
Future͏͏ Buyer͏͏ Penetration͏͏ Outlook:
The͏͏ report͏͏ noted͏͏ that͏͏ effectively͏͏ implementing͏͏ these͏͏ cost͏͏ structures͏͏ will͏͏ be͏͏ crucial͏͏ for͏͏ eB2B͏͏ firms͏͏ to͏͏ expand͏͏ their͏͏ operations͏͏ and͏͏ maintain͏͏ viability,͏͏ particularly͏͏ during͏͏ funding͏͏ challenges.͏͏ It͏͏ further͏͏ stated͏͏ that͏͏ buyer͏͏ penetration͏͏ on͏͏ eB2B͏͏ platforms͏͏ is͏͏ expected͏͏ to͏͏ rebound͏͏ and͏͏ surpass͏͏ the͏͏ levels͏͏ seen͏͏ during͏͏ the͏͏ ‘Goldilocks͏͏ Years’͏͏ (2019-21).
The͏͏ study͏͏ also͏͏ highlighted͏͏ that͏͏ eB2B͏͏ platforms͏͏ are͏͏ improving͏͏ margins͏͏ across͏͏ the͏͏ value͏͏ chain͏͏ through͏͏ initiatives͏͏ like͏͏ category͏͏ expansion,͏͏ private͏͏ label͏͏ launches,͏͏ vertical͏͏ integration,͏͏ and͏͏ direct͏͏ partnerships͏͏ with͏͏ brands.
The͏͏ report͏͏ highlighted͏͏ Udaan‘s͏͏ micro-market͏͏ strategy,͏͏ noting͏͏ that͏͏ the͏͏ eB2B͏͏ giant͏͏ has͏͏ increased͏͏ its͏͏ market͏͏ penetration͏͏ from͏͏ 35͏͏ per͏͏ cent,͏͏ 6-12͏͏ months͏͏ prior͏͏ to͏͏ the͏͏ strategy’s͏͏ implementation,͏͏ to͏͏ 75͏͏ per͏͏ cent͏͏ in͏͏ key͏͏ markets͏͏ like͏͏ Bengaluru.
Continue͏͏ Exploring:͏͏ IPO-bound͏͏ B2B e-commerce͏͏ platform͏͏ Udaan͏͏ reduces͏͏ cash͏͏ burn,͏͏ focuses͏͏ on͏͏ key͏͏ categories͏͏ and͏͏ micro-clusters͏͏ to͏͏ drive͏͏ profitability
In͏͏ another͏͏ important͏͏ market,͏͏ Hyderabad,͏͏ the͏͏ company͏͏ more͏͏ than͏͏ doubled͏͏ its͏͏ buyer͏͏ penetration,͏͏ rising͏͏ from͏͏ 25͏͏ per͏͏ cent͏͏ in͏͏ January͏͏ 2024͏͏ to͏͏ 56͏͏ per͏͏ cent͏͏ by͏͏ June͏͏ 2024.
Caution͏͏ Amid͏͏ Promising͏͏ Outlook:
The͏͏ report͏͏ indicated͏͏ that͏͏ although͏͏ the͏͏ future͏͏ outlook͏͏ is͏͏ promising,͏͏ eB2B͏͏ firms͏͏ are͏͏ exercising͏͏ caution͏͏ due͏͏ to͏͏ challenges͏͏ like͏͏ capital͏͏ efficiency,͏͏ the͏͏ rise͏͏ of͏͏ new͏͏ competitors,͏͏ and͏͏ brands͏͏ introducing͏͏ their͏͏ own͏͏ proprietary͏͏ platforms.
The͏͏ report͏͏ stated͏͏ that,͏͏ despite͏͏ the͏͏ increasing͏͏ adoption͏͏ of͏͏ digital͏͏ channels͏͏ spurred͏͏ by͏͏ quick͏͏ commerce,͏͏ the͏͏ retail͏͏ essentials͏͏ market͏͏ is͏͏ expected͏͏ to͏͏ remain͏͏ predominantly͏͏ offline.
As͏͏ of͏͏ 2023,͏͏ 98͏͏ per͏͏ cent͏͏ of͏͏ essentials͏͏ are͏͏ sold͏͏ offline,͏͏ primarily͏͏ through͏͏ general͏͏ trade͏͏ and͏͏ kiranas.͏͏ According͏͏ to͏͏ the͏͏ report,͏͏ by͏͏ 2028,͏͏ the͏͏ online͏͏ share͏͏ of͏͏ essential͏͏ retail͏͏ sales͏͏ is͏͏ projected͏͏ to͏͏ increase͏͏ to͏͏ 4-6͏͏ per͏͏ cent,͏͏ up͏͏ from͏͏ 2͏͏ per͏͏ cent͏͏ in͏͏ 2023.
Currently,͏͏ essentials͏͏ account͏͏ for͏͏ 65͏͏ per͏͏ cent͏͏ of͏͏ retail͏͏ spending,͏͏ driven͏͏ by͏͏ the͏͏ large͏͏ rural͏͏ and͏͏ middle-class͏͏ population.
“While͏͏ there͏͏ is͏͏ a͏͏ rising͏͏ trend͏͏ in͏͏ non-essential͏͏ purchases,͏͏ inflation͏͏ and͏͏ price͏͏ sensitivities͏͏ in͏͏ relation͏͏ to͏͏ income͏͏ growth͏͏ have͏͏ dampened͏͏ the͏͏ increase͏͏ in͏͏ disposable͏͏ income͏͏ available͏͏ for͏͏ such͏͏ spending.”
Projected͏͏ Growth͏͏ of͏͏ Online͏͏ Essentials:
By͏͏ 2028,͏͏ essentials͏͏ are͏͏ projected͏͏ to͏͏ make͏͏ up͏͏ 62͏͏ per͏͏ cent͏͏ of͏͏ the͏͏ retail͏͏ market,͏͏ while͏͏ non-essentials͏͏ will͏͏ represent͏͏ the͏͏ remaining͏͏ 38͏͏ per͏͏ cent.
The͏͏ report͏͏ stated͏͏ that͏͏ approximately͏͏ 40͏͏ per͏͏ cent͏͏ of͏͏ retailers͏͏ encounter͏͏ supply͏͏ chain͏͏ inefficiencies,͏͏ 29͏͏ per͏͏ cent͏͏ face͏͏ service͏͏ challenges,͏͏ 17͏͏ per͏͏ cent͏͏ experience͏͏ procurement͏͏ issues,͏͏ and͏͏ 9͏͏ and͏͏ 6͏͏ per͏͏ cent͏͏ deal͏͏ with͏͏ pricing͏͏ and͏͏ financing͏͏ concerns,͏͏ respectively.
