India's eB2B Market Poised to Soar, Estimated to Reach $100 Billion by 2030: Report

A Look into the Projected Market Value and Key Players

According to a recent report published by Redseer Strategy Consultants, India's business-to-business ecommerce market (eB2B) is poised for remarkable growth, with projections indicating a substantial increase to $90-$100 billion by 2030. This estimate suggests a remarkable compound annual growth rate (CAGR) of 40-45 percent from its current value of $5-6 billion in 2022.

The report underscores the dominant presence of platforms catering to retailers, accounting for 70-80 percent of the eB2B market. Meanwhile, the remaining 20-30 percent is occupied by platforms catering to wholesalers. This distribution reflects the increasing influence and adoption of ecommerce platforms among retailers, with the potential for further growth.

Driving Forces Behind the eB2B Market's Growth

Penetration, Benefits, and Evolution of Ecommerce Platforms

Mrigank Gutgutia, a partner at Redseer, identified two primary drivers fueling the anticipated growth of the eB2B market. Firstly, the deepening penetration of ecommerce platforms among retailers across various categories and geographies is expected to contribute significantly to market expansion.

Secondly, the platforms' ability to offer attractive benefits, including cost-effective procurement, faster deliveries, higher fill rates, and consistent product quality, will entice retailers to embrace these digital platforms more extensively.

As India's retail market is predominantly unorganized, with a value of $950 billion, traditional general trade dominates the landscape. However, with the rapid growth of the eB2B market, the report emphasizes the potential for a shift in the market dynamics.

While general trade currently accounts for 83 percent of the overall market, its stronghold exceeds 90 percent in the groceries segment.

Unveiling the Landscape of eB2B Platforms in India

Challenges for Vertical Platforms and the Rise of Multi-Category Players

The report sheds light on the composition of the eB2B platform landscape in India, highlighting the limited presence of multi-category platforms with nationwide operations across diverse product categories.

These platforms encompass staples and FMCG groceries, electronics and accessories, general merchandise, fashion, and other segments. In contrast, the majority of eB2B platforms operate within narrower categories or verticals at regional or local levels.

Gutgutia explains that vertical platforms focused solely on grocery or discretionary categories face challenges, resulting in limited growth or even decline. These challenges primarily stem from demanding unit economics and prevailing macro-economic conditions.

Conversely, multi-category platforms such as Udaan have managed to gain significant market share, accounting for 55-60 percent of the retailer-led eB2B market. This success can be attributed to their ability to optimize go-to-market strategies and credit costs.

Unlocking the Potential of Multi-Category Platforms

Balancing Gross Margin and Cost Structures for Optimal Growth

The report emphasizes the strategic advantages of multi-category eB2B platforms. These platforms possess the ability to strike a balance between gross margin and cost structures by leveraging assets and capabilities across various categories.

The cross-category approach optimizes go-to-market (GTM) strategies and credit costs, enabling these platforms to effectively navigate the market landscape.

In contrast, vertical platforms focused solely on groceries or discretionary categories face challenges related to GTM costs due to lower retailer density and lower demand predictability.

The report highlights the significance of high retailer density and demand predictability in achieving optimal throughput per feet-on-street (FoS), a crucial aspect for maintaining cost efficiency and achieving sustainable growth.

Conclusion

In summary, India's eB2B market is poised for extraordinary growth, with projections indicating a significant increase to $90-$100 billion by 2030. The report highlights the dominance of retailers in the market and emphasizes the value proposition offered by eB2B platforms, including cost savings, faster deliveries, and consistent product quality.

As multi-category platforms gain traction, they are well-positioned to capture market share by leveraging cross-category synergies and optimizing their gross margin and cost structures.