Business

Udaan: A Bangalore-based startup(2016) is winning the Bezos vs Ambani’s fight for retail domination.

Udaan: Sometimes, a single idea can do wonders. No matter how much the investment is, if the idea and strategies are different from others, the business can be at the top.

udaan revenue growth business model case study - sales creta

In our country, new start-ups have been rising every single day, new investments are made every day and the development of the country, is therefore rising at a very high pace. In the last few years, the support of the government towards these start-ups have been immense too. Tax concessions, subsidies, easy financing policies, fewer restrictions and much more, everything is done to promote start-ups in the nation.

These start-ups have been very great in solving many problems- reducing the income inequalities in the nation, increasing infrastructural development and raising the employment opportunities in the country. In this article, we will be discussing one such start-up, which was launched just five years and has now changed the complete game, competing with the big giants in the nation.

A bruising battle between two of the world’s richest men and their companies- Amazon led by Jeff Bezos and Reliance Industries led by Mukesh Ambani is ongoing and has stolen all the limelight, but another start-up has been capturing the whole market share of the retailers in the country and is doing better than these two.

The country is witnessing an ongoing digital transformation of the corner Kirana stores which refers to tens of millions of shops and 1.3 billion consumers will matter to every company of the nation, from Unilever NV and Procter & Gamble Co. to State Bank of India, which is country’s largest lender. It will also be very important for both the giants, Amazon and Reliance Industries.

Reaching all the small stores in the nation which has more than 6,60,000 villages and nearly 8,000 cities and towns has always been very difficult for all the brands. Even Unilever, a company which is in the country for now over a century, has been able to tap 15% of the retailers directly. However, the company requires wholesalers to tap the remaining 80+ % in the country. However, this method is small and expensive and is a very traditional method. Here comes our start-up – Udaan.

Udaan

Udaan- a Bengaluru based tech start-up has been changing the game for all the millions of retailers in the back end ever since it started to function. The founders have their own way of working.

This start-up was launched just five years ago and has now acquired 80% of the total business to business e-commerce market and sends the supply of its goods from its 200 warehouses to nearly 1.7 million retail stores across 900 cities and villages across the nation every single day. The performance of Udaan has been so great that it has captured a greater market share in just five years where other big companies which have been in the country for a very long period of time are not able to do so, till now.

zyeta designed a purposeful workplace for india's emerging unicorn, udaan - picture gallery 5

What is so special about Udaan?

Suppliers who are using Udaan receive their money on time as soon as Udaan takes their products from them. Retailers, on the other hand, receive credit very easily which they would have otherwise obtained at a very high cost from the wholesalers.

This promotes the retailers to rely more on this app than on the traditional wholesalers. Moreover, all of this is done on a mobile, which helps the retailers to bring a history of reliable payments. The platform has a very huge network across the nation and is still growing. From manufacturers and millers to farmers, pharmacists, hotels, restaurants and grocers, the platform has more than 3 million registered users. The platform has been widely used and has managed to eliminate the middlemen and therefore has helped the retailers in saving their money and time.

Trust issue?

bridging the gap: how b2b ecommerce startup udaan seamlessly connects india and bharat

Vaibhav Gupta, which is one of the three founders of this platform has said gaining the trust of retailers was the most important priority of the company. It is safe to say that they have succeeded in gaining the trust of the people.

The firm is backed up by Lightspeed Venture Partner, which was an early investor of this company along with Yuri Milner’s DST Global. Start-ups that are worth more than $1 billion are called unicorns, and this company is one of the fastest-growing unicorns in the nation. This was possible only because of the ability of the company to gain the trust of the retailers across the nation.

Sujeet Kumar, which is the other founder of this platform has said that the introduction of Goods and Services Tax provided an edge to the company and led to its widespread growth across the nation. With multiple rates and a high cost of compliance, GST is a cumbersome consumption tax and is uniform across the whole nation. Warehouse decisions, which were previously taken in confusion by local levies but are now efficiently guided.

One ironic thing which reports suggest is that Ambani, which is a competitor of the platform has helped the company to grow. You might be wondering how Ambani helped Udaan to grow, right? Mobile and the internet plays a major role in the functioning of Udaan and the introduction of Ambani led Jio in the telecom sector completely changed the game.

The prices of the internet and other telecommunication services were reduced to that extent that now they are the cheapest in the world. Now, the corner Kirana store owners have mobile and internet facilities and are not ashamed to use them. The barrier imposed by lack of education is slowly starting to move aside ever since all these people started to use mobile phones and become more digital.

Moreover, you can completely say that the growth of the company is due to the great experience of its founders. Kumar and Gupta, two of the three co-founders of the company have been working in the development of Flipkart, a huge rival of Amazon and they left it two years before it was bought by Walmart for a huge amount of $16 billion.

Amod Malviya, the third co-founder of the platform Udaan was previously the chief technology officer of Flipkart. At Udaan, these co-founders have always aimed to provide the best of services to their customers.

The business to consumer retail is both deeply political and trapped with regulatory minefields. In our country, the functioning of Amazon, as well as Flipkart, is tightening as the country aims at providing a more nationalist economic agenda. Ambani led Reliance is growing too and has an edge over Amazon keeping in mind that it is completely national and promotes the agenda of the nation.

However, Udaan on the other hand is much preferred by retailers across all the sectors due to the efficient services that it provides to the people. The retailers are now able to book their supplies at credit and later pay after sales have been done. The elimination of wholesalers has helped to reduce the cost for the retailers.

Udaan, along with this, also promotes the process of digitalisation in the country, making the retailers more digital in their operations. The growth of Udaan, a start-up company launched just five years ago is very commendable and helps to influence other start-ups and entrepreneurs of the country.

Simerleen Kaur

Talk to me about economics, trade, and all things India.

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