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Last few months have been hard for the businesses due to various restrictions imposed by government as safety measures for Covid-19. B2B e-commerce platform Udaan is expecting its business to shoot up as the festive season approaches. The firm is banking on their business in smaller towns for this increase.

Vaibhav Gupta and Sujeet Kumar, co-founders of Udaan told in an interview that even though operations came to a halt due to coronavirus, they grew their network of retailers and manufacturers as traditional methods could not be used during lockdown.

The company connects manufacturers with small retailers across three categories–food (staples, and fresh vegetables), non-food (electronics, and fashion), and pharmaceuticals. Food and non-food contribute equally to about more than 90% of Udaan’s sales volume, while pharma is its fastest-growing vertical.

The company has recorded 80% recovery of its pre-Covid sales period in the month of June in fresh food and pharma category. The founders estimated that the non-essentials sector would take time to go back to normal numbers but on the contrary, the business is coming back to track faster than ever.

Commenting on the development, Gupta said, “I think almost everybody’s mindset has materially shifted to digital as a very important channel going forward…In the last few months, a number of brands, manufacturers, as well as retailers, chemists, factory owners have been reaching out and beginning relationships with our platform. For instance, if you think about garments, people used to travel for touch and feel of section of samples. Now they are restricted, and also very scared to touch products.”

Kumar said, “There is a very increasing realization that middle and lower end Indian retail is a very different, and ecommerce retail model is the only efficient way to scale…We expect more talent, capital, and competition to come into B2B e-commerce. However, building on the ground supply chain, merchandising, capabilities and customizing according to the region, demand will take time.”

Udaan is collaborating with external lenders to expand its financial services business, instead of investing capital solely from its balance. “We are getting a large amount incoming from suppliers of capital who want to tap into small business market of India, but typically haven’t had either the access,” said Gupta. The firm is also looking to grow its business geographically. A few sources also state that Udaan is planning to set up offline fresh and grocery retail stores in franchise model in Bengaluru.


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