India’s eB2B market is expected to cross $60 billion in 2025, an ambitious growth from a small base of $1.7 billion as on March 31, 2019, as per a report released by Redseer, an Internet and new age advisory firm.
Though e-commerce, mostly in the B2C segment, had taken off in the country in a big way, the eB2B sector experienced slow growth as credit facility wasn’t available for online deals. However, this scenario may slowly change as credit is increasingly being made available for online transactions, said the firm.
As per the Redseer report titled “Unlocking the Indian eB2B Retail Opportunity,” the $60 billion eB2B opportunity includes some of the new age B2B retail business models such as Udaan, ShopX and Jumbotail that are trying to resolve traditional retail value chain challenges through technology led innovation.
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Abhishek Chauhan, associate partner at RedSeer, said, “With higher capital efficiency and faster speed of growth as compared to eB2C sector/sub-sectors until now, eB2B retail is on a really exciting growth path. This is driven by significant opportunity to address the pain points of key stakeholders in the un-organised B2B retail supply chain, which has been driving greater than 70% of the retail market by value, through technology enabled solutions.”
The report further stated that despite the recent economic slowdown, a strong, over $900 billion consumer retail market would continue to grow at 10% to reach $1.6 trillon by FY 25. This market would be facilitated by a long multi-tiered B2B retail chain, which serves 1.3 billion Indian population through over 15 million retailers, out of which about 13 million are smaller mom and pop stores.
Anil Kumar, Founder & CEO, RedSeer, said, “In the economy which is increasingly getting digital by the day with the cheapest cost of mobile data available on the planet, and the highest amount of data consumed per smartphone across the globe, eB2B has a strong use-case to resolve the traditional un-organised B2B retail supply chain complexities, and enhance the end consumer experience.’’
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More than 70% of the country’s $700 bn B2B retail market is currently being served by the unorganised channels such as traditional formats. This leads to multiple challenges such as limited product availability, quality issues and losses in efficiency leading to longer timelines for delivery. In addition, both sellers and buyers in this supply chain face other challenges in terms of demand generation due to limited consumer insights and engagement, payments, inventory management, credit, pricing, conflict resolution and a few more. This scenario creates a sweet spot for the eB2B players to target, resolve, add value and grow, as per Redseer.