Udaan, a Bengaluru-based B2B e-commerce start-up offers an online wholesale market and caters to bulk orders. It is one of India’s biggest wholesale markets and recently completed a Series D funding round worth $280 M backed by Moonstone Capital Partners, Octahedron Capital, Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent Capital.
5 things done right by Udaan
Evolving business model to meet market demands
Each year, Udaan’s business model was sharpened and has evolved to meet market requirements. This is one of the many things that they did right.
Udaan’s business model initially took off as an idea that they could somehow bring about a transformation in India’s trade ecosystem. It has always aimed at becoming a full-stack marketplace, logistics, and lending platform for small and medium enterprises. When the SME community in India was growing at an accelerated pace, Udaan capitalised on the high frequency of transactions taking place here and subsequently gained an increase in their revenue along with the growth of the SME ecosystem over the years.
Strategic Investments in various business arenas
In the span of a single year, Udaan invested more than INR 4000 Cr in a number of business arenas including technology, supply chain, category, credit, people, compliance and more. These efforts were aimed at accelerating and strengthening their capabilities.
Providing solution to fill gap in a critical market
Rural India is riddled with mom-and-pop Kirana stores. These stores need B2B marketplaces to connect with sellers for stocking up. Businesses of all sizes in B2B especially the neighbourhood grocery stores are being empowered by Udaan’s much-needed supply chain solution. Thus, the start-up has proved to be a saviour for Kirana stores during the pandemic.
Much needed deviation in e-commerce
Kirana stores contribute to nearly $650 M of the $1 T retail market in India. Udaan rightly capitalised on the huge demand for B2B online retail which is 7.5 times bigger than that of B2C online retail. The secret sauce behind Udaan’s rapid growth has been the fact that they took on the challenge of rural Kirana stores’ stocking problem head-on.
Deep personal understanding of the problem statement
Last but not the least, Udaan’s stellar success can be attributed to its founders’ own lives which are deeply connected with rural India. The founders have known what it feels like to have your hands tied due to lack of credit access as a small towner or villager. This understanding has been a boon for them along with the fact that they gained hands-on online retailing experience at ‘Flipkart’ prior to Udaan.
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Each year, Udaan’s business model was sharpened and has evolved to meet market requirements. This is one of the many things that they did right.
What’s in it for me?
It’s a no-brainer that e-commerce is one of the raging successes among all business and industry sectors during the pandemic. With the entire retail and commerce space moving online in just a span of 1-2 years, the opportunities are huge in e-commerce.
Running an e-commerce firm during the pandemic and amidst lockdown restrictions will entail higher costs which you need to be prepared for before launching your online store. To constantly work around the short-term disruptions which will no doubt show up, your start-up needs to learn to be adaptable.
E-commerce start-ups listing products from a variety of categories including food, lifestyle, electronics, etc. are guaranteed to succeed. Even with the intense competition, the sector is still largely untapped especially in the small business scene in rural India. Small business food e-tailing is exceptionally lucrative and Udaan is a prime example of this.
