India’s next battleground in the startup space…
Venkatramani is a 37-year old, running a local kirana store in Tiruchi. On any typical day, you’d see his customers arrive by OLA autos and make payments through Paytm. His children study through the BYJU’s App and on occasions to celebrate, order Pizza through Swiggy. His wife gets beauty advice from Nykaa, purchases big-ticket items from Flipkart and, at the end of a long day, Venkat catches up with friends and family on Share Chat.
This is a bonafide example of the extent of proliferation of techno-logy in our daily lives across the country and the world at large today.
The seeds of our tech-enabled lives were sown in the 1980s with the advent of the internet and the subsequent Dot-Com boom. Thereafter, the globalisation wave in the 1990s catapulted India to become the world’s back office, with companies such as Infosys, Wipro and TCS forcing the world to take notice of India’s contribution to the world of technology. However, India truly found its place on the global map with the smart-phone wave in 2010 and onwards, where we witnessed the emergence of tech-led startups such as Flipkart and the consequent attention of global funds to the Indian market.
THE ONLINE MARKETPLACE AND ITS DRIVERS
It is well accepted that India’s most-celebrated start-up – Flipkart mothered the B2C e-commerce space and in many ways set the stage for the Indian start-up ecosystem; and now start-up pundits believe that B2B e-commerce is to be India’s next battleground. The B2B space is not entirely new; the launch of Reliance Jio, the 95 per cent cost reduction in data services, the introduction of GST, demonetisation and the impetus to digitalisation by the government have together nudged businesses to adopt digital technologies.
THE KEY PLAYERS
With the rapid growth in mobile usage and the success of B2C e-commerce; the B2B segment seems a lucrative path to profits. The sector has seen strong investor interest over the past few months and one with a hyper-growth trajectory is Udaan, the fastest Indian start-up to earn the coveted ‘unicorn’ status (a privately held company valued at more than $ 1 billion) in a span of just 26 months!
B2B e-commerce is also home to India’s first female unicorn co-founder – Ankiti Bose, who along with Dhruv Kapoor, founded Zilingo, a fashion and lifestyle startup in 2015. Zilingo primarily caters to the South East Asian market, providing a digital platform for small-medium businesses to market their products
The veteran in the space – the 23-year old IndiaMart, (started by Dinesh Agarwal in 1996) managed to have its IPO oversubscribed 36 times, the only Indian internet-based startup to pull off this feat.
Tiger Global’s largest initial cheque of $89.5 million was earned by NinjaCart, an agri-tech company, connecting farmers
to retailers, restaurants, supermarkets.
Other notable players include Shop Kirana and Shopify, both of which focus on retailers; Jumbotail, a wholesale food and grocery platform; Moglix which caters to the industrial goods market; etc.
THE ROAD AHEAD…
As per a report by IBEF in July 2019, the Indian e-commerce market is expected to surpass USA by 2034 to become the world’s second-largest e-commerce market and reach about $200 billion by 2026.
The largely unorganized SME market in India, the increased use of mobile platforms and availability of data analytics portray the huge untapped potential that the B2B e-commerce market offers. Further, initiatives such as Internet Saathi (a collaboration between Google and Tata Trusts to improve internet penetration among rural women) and government-led initiatives such as BharatNet and Digital India along with ISRO’s commitment to launch 3 more satellites to improve bandwidth connectivity in rural India, shall unquestionably drive e-commerce.
100 per cent foreign direct investment allowed in B2B e-commerce is bound to enhance competition.
We’ll now find a happier Venky – sourcing goods at the click of a button and fulfilling his childhood dream of singing in kutcheris!