Background about the organization:

Founded by three senior executives of Flipkart- Sujeet Kumar, Amod Malviya and Vaibhav
Gupta, Udaan is a B2B marketplace which offers a platform to connect manufacturers,
wholesalers, traders and retailers. The company received $225 million funding from DST
global and Lightspeed. The fastest growing B2B e-commerce company became Unicorn just
after 26 months of its inception and the company is in talks to receive another round of
funding of $500 million which would make its valuation to $3 billion. As per market reports,
it is said to be “The Flipkart of B2B e commerce”. Its exposure is mainly in electronics,
FMCG products and apparels with overall 15 lakh products. It also offers credit solution to
small businesses, which is one of the biggest reasons for its rapid growth. On this platform,
mostly manufacturers and wholesalers sell their products to retailers.
Market Size: The Indian B2B e-commerce market size is $525 billion, and it is
expected to reach $700 billion by 2020.There are 14 million retailers in India who are
driving this growth.
Customers: The e-commerce unicorn claims to have 20,000 sellers, 10lakh retailers and
500 brand partners on its platform.
Competitors: There are many players like Indiamart, Power2SME, ofBusiness who are
already established in this B2B e-commerce segment. Amazon, Alibaba and Reliance
are also planning to enter and capture this potential B2B marketplace, which would
increase the competition in future.
Description of the Implementation:
The business model of the company is tech enabled non-linear, which helped it to scale
up as per the requirement of the market.The implementation process started when the
company was founded in November 2016.At that time the company did not start into e -
commerce platform, instead it addressed the key challenges faced by many e -commerce
companies like logistics, sales, marketing, payment solutions etc. The company started
to provide logistic and payment solution to other e-commerce companies which helped
it to make strong relationship with various B2B sellers and retailers.
After understanding whole B2B ecosystem and having developed good number of
contact, it started its platform for wholesalers and retailers to register and sell their
product and offered them a variety of choices and customization. One of the best things
that happened with Udaan is that they scaled up their operation post GST
implementation. It took more than a year for small scale businesses to adjust to GST
shocks and the sector was hurt after GST, while the SMB was ready to aborb GST
shock, at the same time Udaan captured the whole landscape.
As soon as the growth started to pick up, the company increased no of products and
wholesalers on its platform, getting funding og $225 million helped the company to
become Unicorn in this space and soon it gained much traction among the Small and
Medium Enterprise B2B space.
The unique aspect of Udaan is that they not only provide the logistics and payment
support to their customers and generate revenues but also offer credit solution with
attractive interest rates to its small business clients.80 perecnt of the buyers on Udaan
platform belong to Small Scale businesses. With liquidity crunch in the economy and
major NBFCs facing the heat, Udaan became a better alternative for these credit
deprived small scale businesses. Having the transaction history and average order size
of their clients they are financing only potential and creditworthy small business, which
helps both to grow.

Getting scale by leveraging the technology(its non linear,less manual intervention)

Traffic is there on this website which is very important, lakhs of seller on the platform within 2 year,
they were able to scale up

They did better work on credit and logistics side

Udaan helps businesses discover customers, suppliers and products across categories
and connect them in order to get the best deal. The platform also facilitates secure
payments and gives logistics support.

Till February 2018, Udaan had a seller base across 80 cities and delivered
to more than 500 cities, with an average order value between INR 6K -7K.

The company delivers to over 500 cities, and picks up from sellers in
over 80 cities through third party logistics.
It also offers order management, accounting, and payment
management solutions to merchants on the platform.

B2B WAS UNORGANISED IN TERMS OF OFFLINE BUSINESS, MORE OPTION AND FLEXIBILTY, ADDING
CREDIT IS ALSO FRUTIFYING MORE TO UDAAN, LOGISTIC IS REALLY IMPORTANT (Startups
are
increasingly focusing on the large, and largely unorganised, enterprise
and small businesses market.)
2018 proved to be a better year for Indian start up ecosystem Fourth unicorn post Swiggy , policy
bazar, freshworks

Internet was there, market was there, potential was there, value creation happened,

Jio, GSt set the base for digitization:::perfect time to hit the market as they came post GST and till
that time whole market structured it around GST

They Solved last mile delivery challenge

Implementation:
This, despite inefficiencies in logistics, sales,
marketing and other areas. Our belief is that these
challenges are common across categories and we have
found success by following a tech-enabled approach to
solving these inefficiencies,"

why Udaan started with logistics and how it helped the firm to establish
B2B business?

Logistics essentially helped it to foster a relationship with the buying and

selling community in B2B space. “For more than a year and a half, Udaan
did logistics on subsidised rate and it helped them to gain significant
exposure within the community,” said two sources.

“More importantly, logistics allows Udaan to gain insight on who is buying

what,” they added. Essentially, the company’s deliberate goal was to
build a database of buyer and sellers before getting into supply business.
Around early last year (Feb-March), Udaan began B2B supply business
with a handful of buyers and sellers. Within a short span of about 22
months of operations, it has been able to onboard about 1,80,000 sellers
and buyers on the platform.

While 80 percent of this is buyers comprising of small-scale retailers,

remaining 20 per cent are manufacturers who are selling inventories on
Udaan’s platform.

So, what’s the revenue model for Udaan?

Probably, making a commission on transactions and charging for logistics.
But, that’s not the case. Udaan is gunning a bigger opportunity. It wants to
become a lending platform for merchants who are buying at it.

“They don’t intend to make money through logistics and commission at

the moment. Udaan funds working capital for its buyers and charge around
15-18 per cent interest on it,” emphasised the sources.
Financing working capital has been a major headache for end retailers.
They typically end up borrowing from local lenders who charge
exorbitantly. Udaan intends to be a working capital ‘fund’ for them.

Udaan has data of sellers so they know that who is creditworthy and they give loan/credit facility to
those people and they form a kind of relationship which drives synergy

It has become to one stop solution to SME

(1) , (2) description of the implementation,