India’s sprawling network of kirana stores, long reliant on antiquated and fragmented distribution systems, is now navigating a profound digital shift. According to a recent study by Redseer Strategy Consultants, this transformation is driven by the increasing adoption of digital B2B (ecommerce-led Business to Business) platforms. The study, titled ‘B2B e-commerce Opportunity in India,’ highlights how kirana stores are moving away from traditional inefficiencies towards more streamlined and tech-savvy operations.
The Redseer report points out that kirana stores, burdened by outdated procurement methods and limited access to financial resources, are turning to digital platforms to enhance their operations. Leading this digital revolution is udaan, which has emerged as a dominant force in the sector, as per Redseer. The platform’s innovative ‘Micro-Market Strategy’ is particularly notable for its impact on the market in Bengaluru and Hyderabad.
“udaan is transforming the future of eB2B retail by empowering kiranas and small retailers with unmatched access to a wide variety of quality and affordable products, and credit while leveraging technology.” said Vaibhav Gupta, co-founder and CEO, udaan. “Our rapid growth in Bengaluru and Hyderabad is just the beginning. We are committed to revolutionising the eB2B retail landscape across Bharat, expanding into new clusters, and driving an efficient and profitable growth for millions of small businesses.
As detailed in the report, udaan now caters to about 80% of kirana stores in Bengaluru, equating to roughly 15,000 daily transactions on its platform. This impressive reach underscores udaan’s deep integration into the local retail ecosystem. Over the past year, udaan has also managed to double its buyer base, reflecting a significant surge in demand for its services.
“The Indian B2B kirana market is on the cusp of a remarkable transformation as digital platforms revolutionize traditional trade practices. Our report highlights strong growth driven by digital adoption, with eB2B solutions reshaping supply chains and improving efficiencies. Kirana stores now have unprecedented access to products and financial services, marking a fundamental shift in how businesses operate and thrive in the coming years. The future of this market is promising and poised to redefine retail in India,” Anil Kumar, founder and CEO, Redseer Strategy Consultants, said.
The ‘Micro-Market Strategy’ has been a game-changer, focusing on regional markets and customising offerings to local needs. According to the report, this strategy has led to a 1.2 to 1.4 times increase in both buyer penetration and wallet share in key cities. This success is attributed to a combination of regional focus, tailored product assortments, and high customer satisfaction, as indicated by strong Net Promoter Scores (NPS).
The report also reveals a contrasting scenario for other eB2B players. Many competitors are struggling to match udaan’s growth and operational efficiency, with some even experiencing a decline. This highlights udaan’s competitive edge and the effectiveness of its tailored approach.
Several factors underpin the shift towards digital B2B platforms. Traditional supply chains, fraught with intermediaries, lead to delays and increased costs. eB2B platforms like udaan streamline these processes by eliminating middlemen, thus offering faster delivery and better inventory management. Moreover, these platforms improve operational efficiency through enhanced demand forecasting and streamlined warehousing, helping kirana stores manage inventory more effectively and boost profitability. Access to formal credit through eB2B platforms further supports stores in expanding their product ranges and managing cash flow, moving away from unreliable informal credit sources.
Looking forward, the future of India’s eB2B sector is bright. The Redseer study suggests that platforms like udaan are likely to continue their expansion and replicate their success across other regions. With further growth expected in product categories, private label strategies, and market penetration, the digital B2B sector is set to capture an increasingly large share of the retail market.