Unlocking the Indian eB2B Retail Opportunity

3
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Preface
We are almost approaching the end of Q3 for the financial year, and it has seen a slightly
modest year in terms of Indian economy growth. While there have been a mixed point of
views on the causes, the economy appears to be well positioned for rebound in the near
term, to continue growing at about 7%.
The consumer retail market has been one of the key pivotal drivers for the Indian
economy growth in the past, and will continue to play a critical role in the future
economic growth. The beautiful as well as the intriguing fact underlying this ~900 BN
consumer retail market, is the huge and complex B2B retail supply chain, which makes
sure that ~15 MN retailers are able to service the 1.3 BN strong Indian population, whose
per capita consumption levels have been increasing. Out of these 15 MN retailers, ~13
MN are smaller mom and pop retail stores, which enable the reach to the big Indian
geography, including Bharat cities and towns.
This B2B retail market surpassed $700 BN in FY 19, and more than 70% of it continues
to be un-organized i.e. traditional format of low cost retailing being catered through un-
organized distributors. Driven by complexities, this supply chain suffers with lower fill
rates of <70%, which brings the consumer experience down.
In the economy which is increasingly getting digital by the day with the cheapest cost
of mobile data available on the planet, and highest amount of data consumed per
smartphone across the globe, eB2B has a strong use-case to resolve the traditional
un-organized B2B retail supply chain complexities, and enhance the end consumer
experience by addressing the pain points of the intermediaries in the traditional B2B un-
organized supply chain.
In this report, we have tried to decode this exciting eB2B use case for the Indian retail
industry by speaking the key stakeholders across the retail value chain, including the
buyers, sellers and the existing eB2B players. Hope you find this report an insightful and
pleasurable read. For any queries, please feel free to directly reach out to me at
anil@redseer.com.
Anil Kumar
Founder & CEO
RedSeer
About RedSeer
RedSeer is a leader in the Internet and new age advisory, over the last 11 years of its
operations we have advised 200+ clients across the breadth of Internet and investment
industry in India, Middle East and South East Asia.
Our advisory is differentiated through our high quality IP of market insights and research,
which is unparalleled in Industry and helps both corporate and funds make right choices.
With more then 200 consultants across 5 offices, we have emerged as the largest home
grown regional consulting firm in India.

Key Themes
Why is the Indian B2B Retail
Industry ‘the opportunity’ to tap?
7
1
Indian eB2B market opportunity -
“The Juggernaut”!
19
2
Glossary & Methodology 52
“The Path to Profitability”! 45
4
Current Indian eB2B business
models - “What it takes to win”!
32
3

6
Understanding the age old plight...
Being the owner of one of the four kirana stores within a radius of a kilometre has done
no favours to 53 years old Umesh Chand. He owns a 250 square feet store in Kaithal,
Haryana. When he started 25 years back, his was the only store in the neighbourhood.
Business was good and margins were high. Cut to 2017, things took a drastic turn. The
other stores run by a younger more tech savvy lot gave tough competition to Chand.
While one of the new stores was getting his supplies from a cash and carry, the other two
relied on eB2B portals to get the best prices which helped them give better discounts.
Chand on the other hand preferred his old suppliers in the nearby wholesale market and
made a fortnightly trip to buy goods in bulk, a decision for which he paid dearly a long
time.
Things finally changed when his nephew heard his plight. He did a thorough market
survey and spoke to two a few cash and carry companies as well as eB2B players.
Finally, they zeroed in on one eB2B player, who provided them with a one-stop
modernization & digitization solution to improve margins, profitability, sourcing channels
and compete with the modern retail landscape
They helped remodel his traditional closed format kirana store into an open format
one to make it more modern and competitive. From getting the right set of inventory
management tools, credit line, delivery and logistics help to a robust point-of-sale (POS)
system Chand business was made future proof. Further, his business also benefited from
the consumer pull that the eB2B player enabled by providing more product choices and
localized consumer promotions.
Just like Chand, India has north of 13 MN kirana store owners who are waiting to turn
digital with the right ally. The country by all means is set to be the biggest eB2B market
and the market size by 2025 could be over $60 BN. The opportunity is driven by the
growing need to have a ‘kosher’ supply chain which is not marred by middlemen who
create barriers which cause stress on the retail journey of a kirana store owner and end
user- the customer.
What I did not realise was that my
suppliers were giving me far less
discounts. Before demonetisation
getting supplies on credit was
kind of a norm but after that it was
mostly cash only, which puts added
pressure. Buying inventory in bulk, I
was rarely able to get benefits of a
cut in prices of commodities.

7
1
Why is the Indian B2B Retail
Industry ‘the opportunity’ to tap?

8
Note(s):
1. PFCE – Private Final Consumption Expenditure
2. Remaining PFCE (PFCE - B2C Retail Spend) includes spend on services such as transport, communication, education, restaurants, hotels,
electricity and other miscellaneous services
3. 1 USD = INR 70
Source(s): Redseer Analysis
Driven by consistent expected increase in private consumption,
the Indian retail market is expected to grow at ~10% CAGR to
reach ~$ 1.6 TN by FY 25
Despite the current economic slowdown and our expected normalized real GDP forecast of 6 to 7%, we expect
the private consumption expenditure to continue driving ~60% of the nominal GDP. This is predominantly going
to be driven by consumer retail consumption of goods, which is expected to continue driving ~50% of the private
consumption. Driven by the same, the consumer retail market will grow at 10% YoY from nearly $900 BN today to
reach $1.6 TN by FY 25.
• B2C Retail market size = Nominal GDP x PFCE1
% x Retail spend on goods%.
• Forecasting has been done on the same assuming a real GDP growth of 6-7% in the wake of recent economy
slow down. B2C Retail market size = Nominal GDP x PFCE1
% x Retail spend on goods%.
India Retail Spending
Funnel (FY 19)
USD BN3
Nominal GDP
~2940 BN
~60%
~50%
PFCE1
(Domestic)
~1760 BN
B2C Retail spend
on Goods2
~886 BN
Total B2C Retail Market Size – Growth Forecasts
USD BN3
Forecast (%) Definition
Real GDP growth
(FY 19-25)
6% – 7% -
Nominal GDP
growth
(FY 19-25)
9% – 10% ~5,000 BN
PFCE1
(as% of GDP)
~57% – 60% ~3,000 BN
B2C Retail Spend
on Goods
(% of PFCE1
)
~46% – 50% ~1,570 BN
886
FY 19
CAGR~10% 1573
FY 25F

9
Multiple intermediaries exist between the brand and end
consumers
This huge retail market is facilitated through a long B2B retail supply chain between the brand / manufacturers,
and the end consumer through multiple intermediaries. All these complexities bring in their own set of
implications.
Mostly, there are as many as four to five layers of intermediaries starting from a forwarding agent, distributor, a
sub distributor, a wholesaler to finally a retailer a brand / manufacturer needs to go through to get to the end user.
This traditional system of supply chain causes multiple bottlenecks that lead to longer timelines, losses in
efficiency, issues with quality and most importantly, reduction in retailer margins.
» Long timelines (Goods flow through multiple
intermediaries)
» Efficiency loss due to multiple intermediaries
» Pricing inflation for end consumer
» Product assortment and quality issues
» Operational issues - reliance on un-organized
credit and logistics
End Consumer
1 2 3 4
• Works with
select brands
and has a fixed
geography
decided by
company
C & FA
• Services the
market –
wholesalers and
big retailers
• Sub-distributor/
sub-stockist is
present only in
the rural chain
to distribute
products to
retailers in the
interior regions
Distributor/
Stockist
• Private entity –
No restriction
from brands
• No restriction
on geography
• Better reach in
rural/ smaller
cities
Wholesaler
• Pushes
products to final
consumers
Retailer
• Manufacturing
and Marketing
Brand /
Manufacturer
Multiple levels lead to implications
B2B Retail Value Chain

10
Despite varying personas for various intermediaries in the
traditional retail value chain, they face challenges
Education
Level
Income
Sources
Income Level
/ Store Sales
Tech Usage
1 Risk Averse Wealthy
Traders
C&FA/ Large Distributors
Graduates
Multiple
Businesses +
Rental Income
through real
estate +
Investments
>$3,000 + per
month
(Household
income)
Premium
Smartphone +
Laptop/ Tablet
+ Smart TV
2 Margin Savvy
Strategic Traders
Stockists/ Large Wholesalers
Typically
Graduates
Business
revenue +
credit lending
Business
revenue +
credit lending
$1,000 – $2,000
per month
(Household
income)
Smartphone
3 Emerging Traders
Small Wholesalers Non-Graduate
or First
Generation
College
Graduates
Wholesale
business
revenue only
$500 - $1,000
per month
(Household
income)
Budget
Smartphone
4A TraditionalRetailer
Class A Retailers
Typically
Graduates
Retail store
revenue only
>$40,000 + per
month
(Store Sales)
Smartphone
4B Traditional Mom & Pop
Class B/C/D Retailers Non-Graduate
or First
Generation
College
Graduates
Retail store
revenue only
<$40,000 + per
month
(Store Sales)
Budget
Smartphone

11
It is fascinating to see that the people involved in the retail value chain, while they are all working towards the
same goal, face several issues in their day to day operations. These issues could be similar or diverse, basis the
role they play in the entire process.
In this retail value chain, the 13 MN traditional mom & pop retailers are the big rollers for driving the retail
consumption due to their deep penetration, especially in Bharat (Tier III cities and beyond). A Mom & Pop store
owner is mostly a first generation college graduate who earns less than $40,000 a month in store sales. For them
getting a credit line as well as reliable contacts for sourcing products is a major issue.
Purchasing stock requires me to shut shop for a duration and I lose consumers during that time. Also, I
cannot keep multiple products in my shop, so information on consumer preference would be helpful.
~ Class B FMCG Retailer, Vizag
The traditional big retailers despite their larger scale of individual operations too, face problems around predicting
the future needs and wants of customers. While their month store sales go north of $40,000, they also face high
margin pressures.
I have limited knowledge about what consumers prefer and how their preferences change. I lose out on several
customers due to lack of stock of trending items as they go to my competitors-both offline and online.
~ Class A Apparels retailer, Mumbai
Small upcoming traders, who act as both buyers as well as sellers in the retail supply chain, are non-graduates
or the first in their families to go to college and graduate, have a household income of a little over a $1000 a
month. For them the biggest challenge is dealing with extreme competition from others who are from similar
backgrounds. Rental and inventory costs take a massive toll on their margins and profits.
Now-a-days there are so many wholesalers in the market that price competition is very high. I need to
manage trucks, staff and inventory. My profits are affected badly.
~ FMCG Wholesaler, Lucknow
Large wholesalers and stockists whose monthly household income is around $1000 to $2000 earn from a
maximum of two sources of income which are mostly around trading and credit lending. They face challenges
around O2D due to non-reliable logistics support, and warehouse management.
Warehouse management and logistics is a big issue. I lose out on customers at times due to poor third-party
logistics. Credit is another issue. I cannot give credit to everyone.
~ Electronics direct distributer, Indore
Last but not the least, the risk averse wealthy traders, who act as C&FAs or large distributors to the brands/
manufacturers, mostly ‘play safe’. They earn from multiple income sources such as rental income from real estate
etc. and typically have a household income of more than $3000 per month. For them the problems are around
figuring out space for large inventory that they need to carry, to getting more reliable logistics partners for their
smooth day to day operations. They are also mostly tech savvy and have everything from a premium smartphone,
laptop to a smart television.
I get regular orders from the company, but I do not have place to store so much inventory. Also, logistics
partners cannot be fully relied on for delivering goods to merchants on time.
~ Fashion C&FA, Kolkata

12
Brand /
Manufacturer
C & F Agent
Distributor/
Stockist
Traditional
Wholesaler
Retailer
End
consumer
Definition
Manufacturer-
may be branded
or un-branded,
large or mall
Solution to
logistics-
Leases out
warehousing
space
- Works for
brands in areas
decided by
company
- Stockists in
rural areas &
distributors in
urban areas
Private entity –
No restriction
on brands/
geography
Create reach in
semi-urban
Pushes
products to
final consumers
Creating
consumer pull
through tech to
buy from local
retailer
Unorganized B2B
(Unbranded +
Branded) 72%1
Brand /
Distributor Led
27%1
Cash & Carry
<1%1
eB2B
<1%1
B2B2C play
Online ordering
via customer
but fulfillment
through local
retailer or
customer
loyalty
programs.
These intermediaries engage with each other through multiple
models, with unorganized B2B driving bulk of the market (>70%
by value)
Traditional
Retailer
Traditional
Retailer
Traditional
Retailer
LFR/EBO
Traditional
Retailer
This consumer retail market in India is largely un-organized, which drives 72% of the retail goods flow by value. The key
stakeholders in this value chain are ~13 Mn class B/C/D retailers (turnover of less than USD 40K per month), who are
largely under-served by brands and distributors. These retailers get on an average ~65-70% fill rates, even from brand
distributors. Estimated 70% products reach retailers through wholesalers without formal credit, no service and limited
selection. This high number of retail stores plus plethora of smaller wholesalers / stockists operating in the supply
chain, create a challenge for demand consolidation for the brands / manufacturers.
A
B
C
D
Note(s):
1. India B2B Retail value share% – FY’19
1 2 3 4

13
A broken retail chain causes nothing but pain to buyers and
sellers
Various supply chain issues bog down everyone starting from brands / manufactures, distributors, wholesalers,
to retailers. Limited resources and non-availability of tech tools are just few of the problems they have to deal with
on a daily basis.
Seller - Pain Points
(Brand, C&FA, Distributor/ Stockist, Wholesaler)
Buyer – Pain Points
(Wholesaler, Retailer)
Demand fulfillment Demand predictability
Payment collection Inventory management
Limited consumer
insights
Order returns
Buyer credit worthiness Conflict resolution
Product Availability &
Quality
Conflict resolution
Delivery times Inventory management
Pricing Vendor reliability
Minimum order
quantity
requirements
Credit availability
Issues are a plenty for buyers (Retailers and smaller wholesalers / stockists), mostly ranging from finding easily
available quality products, right pricing, getting reliable vendors on-board, credit availability, minimum order
quantity requirements to getting a consistently good pricing on products.
During our research, we also discovered several pain points that sellers face. Sellers in this supply chain include
brands / manufacturers, C&FAs, Distributors, Wholesalers and Stockists. For them, the major challenges range
from understanding end consumer trends and behaviour, availability of reliable logistics partners and a large
geographic presence.
1 2 3 4
C & FA Distributor/
Stockist
Wholesaler Retailer
Brand /
Manufacturer
SELLERS BUYERS
Traditional Value Chain – B2B

14
Low satisfaction Neutral High Satisfaction
Product
Product
selection
Fill rate/ SKU
availability
Pricing
Prices
Trade schemes
availability
Logistics
Pin code coverage
O2D times
Logistics cost
Credit
options
Credit period &
duration
Interest rate on credit
Un-organized channels leave a long line of dissatisfied buyers
and sellers
Over the years, dealing with un-organized channels has given heart-burn to a host of buyers and sellers. During
our research, we have found out that a buyer’s experience through the whole process is mostly less than
satisfactory or just bearable.
Satisfaction w.r.t to traditional sourcing channels for buyers
% of respondents, N = 970 (buyers)
How satisfied are you with the following parameters relating to traditional sourcing channels i.e. Wholesalers /
Distributor led? (On a scale of 0-10)
0 4 7 10
In most parameters starting from product selection, pricing, trade schemes availability, credit options and
interest rates, ‘Buyers’ are mostly left wanting for more. Cost of logistics is high and the delivery footprint or the
pin-codes covered is quite low. This creates major gaps in the supply chain for these players. On a scale of 0 to
10, most of the scores given by buyers on the said parameters is between a low 3 and 6.5.
Buyers

15
‘Sellers’ too face massive issues around lack of good logistics options. Their satisfaction levels are even lower
compared to buyers. Most of them face issues around predicting demand, discovering potential customer base
and lack of credit to funding their working capital requirements. On a scale of 0 to 10, sellers mostly just gave
between 3 to 5 points.
Satisfaction w.r.t to traditional sourcing channels for sellers
% of respondents, N = 300 (sellers)
How satisfied are you with the following parameters relating to traditional B2B retail (On a scale of 0-10)
Demand
Demand predictability
Discovery of potential
customers
Logistics
Limited capability and
pin code coverage
Lack of manpower /
tech capability
Credit
Collection issue from
customers
Lack of credit to fund
working capital
Sellers
0 4 7 10

16
v
Seizing the $1.3 TN B2B retail opportunity - channels such as
eB2B and Cash & Carry, are expected to take increasing share
from the ‘Un-organized’ pie
We calculated the size of the B2B retail market in India, by subtracting the margins that retailers make across
multiple retail product categories through multiple channels. Please refer to the graphic below, which explains the
calculation clearly
Note(s):
1. Absolute $ value amounts for retailer margins are calculated at median value of%age retailer margins
2. Others include stationery, sports & fitness, equipment, toys, etc.
3. Retailer margins indicate lower limit and upper limit as% of MRP which the retailer earns when the good is sold to end-consumer
4. 1 USD = INR 70
Source(s): RedSeer Analysis
B2C Retail market FY19 Retailer Margins B2B Retail market FY19
886 - 172 = 714
India B2C and B2B retail market size (USD BN)
12%
35%
30%
10%
20%
30%
12%
30%
20%
10%
14%
40%
35%
12%
25%
60%
17%
50%
25%
15%
FMCG & Grocery
Apparel & Accessories
Footwear
Mobiles & Accessories
Consumer Durables and Appliances
Jewellery & Watches
Beauty & Personal Care
Furniture & Furnishing
Pharmacy
Others2
74.0
12.4
4.9
2.6
34.8
6.6
3.8
3.6
26.3
3.0
$BN
∑: USD 172 BN
Retailer Margins1,3 range%age

17
Note(s):
1. 1 USD = INR 70
This $714 BN Indian retail B2B market would grow at the same CAGR of 10% of the B2C retail market growth as
highlighted earlier, to reach $1.3 TN by FY 25.
Largest chunk of this $714 BN B2B retail market in FY19 currently is driven by the un-organised B2B retail, where
numerous smaller sellers such as wholesalers, stockists and sub-stockists operate, and supply branded as well
as un-branded goods to the retailers.
According to our research, around 72.2% of all B2B retail is still un-organized.
Indian B2B Retail Market Growth
USB BN
Cash & Carry
Brand/ Distributor Led
714
FY 19
1262
Brand/ Distributor
Led B2B - 27.2%
66%
28%
Un-organized B2B
Retail - 72.2%
CAGR~10%
eB2B -
0.25%
Cash &
Carry
0.35%
1%
5%
Examples
eB2B
FY 25F
Driven by the challenges faced by the buyers and the sellers from the un-organized play as elaborated earlier, we
expect that the share of the un-organized play will be challenged, and new models such as eB2B as well as Cash
& Carry will grow faster by capturing more share from the un-organized pie driven by several merits.
eB2B specifically is expected to grow the fastest, at a CAGR of >80%, driven by its capability to connect everyone
in the whole retail supply chain. It helps in connecting all the dots for a traditional retailer. A traditional retailer is
able to jump over a lot of barriers as eB2B does the tough task for them of connecting to the right set of people to
fulfil the requirements of a retailer.
Starting from handing delivery logistics, warehousing needs, getting right inventory from right set of distributors
to taking orders online and getting them fulfilled by the retailer, eB2B has the capability to fill in the blanks. Driven
by the same, eB2B will outpace all channels in terms of growth.

18
Huge margin potential in the retail supply chain is available for
new models such as eB2B to tap
At present in tier-I cities, on an average while C&FA has a maximum of 3% margin, organized cash and carry
potentially have a margin between 7 – 9%. For direct distributors the margin ranges from 5 – 7%, and wholesalers
who buy from them get a margin of around 3% when they sell to retailers.
Note(s):
1. Organized retailers procurement is similar to organized cash & carry
2. The numbers indicated are mark-up on landing cost of the stakeholder as a% of MRP
3. Strong play in Tier 2+ citiesas it addresses fragmented supply & inefficiencies
Indian B2B Retail Market Growth2
Route 1
Organised
Cash
& Carry
Route 2:
Distributor
Led
Strong play in
Tier 2+ cities3
.
Data and
information flow
Route 4:
Bharat (Tier
2+)/
Un-organized/
Unbranded
Retail
Route 3: eB2B
Metro
and
Tier
1
cities
Tier
2+
Cities
Brand /
Manufac-
turer
C&FA
(2-3%) Retailers
(10-12%)
Retailers
(10-12%)
Organized
Cash & Carry
(7-9%)
Direct
Distributor
(5-7%)
eB2B
(Current: 0-4%,
Potential: 7-9%)
Stockist
(2-3%)
Sub-stockist /
Distributor
(3-7%)
Wholesaler
(2-3%)
Wholesaler
(2-3%)
C&FA
(2-3%)
1
2 4
5
5
4
1
3
3
Brand /
Manufac-
turer
In the retailer supply chain in the tier-II and Bharat cities, there are additional intermediaries which affect the retailer
as well as the end consumer. In Bharat cities, stockists, sub-stockists,distributors and wholesalers – most of them
come into play and consume margins
Currently eB2B have margins of between 0 – 4%. But the potential to increase that almost two-fold is immense
majorly due to direct procurement from brands, providing value added services such as tech. solutions and credit
among other things. Going further, it can have a strong play in tier-II and beyond cities as it addresses the problems
of fragmented supplies and inefficiencies in the traditional retail supply chain. We believe that eB2B certainly has
the potential to make 7-9%, with room to make addition 3 to 5% through additional profit streams like marketing and
new product launch services (for which brands have a separate trade marketing budget).

19
2
Indian eB2B market opportunity -
“The Juggernaut”!

20
The eB2B retail value proposition works on channelizing the
product flow across the traditional retail value chain from
brands / manufacturers until retailers.
With the help of technology and manpower, eB2B retail helps brands reach to the end user. Companies such as
Udaan, ShopX, Jumbotail and many more are connecting brands / manufacturers to different buyers and sellers
through their technology platforms. In the process, they are also trying to address the numerous pain points
that these buyers and sellers face by working through the un-organized retail. In addition, few companies such
as ShopX are also trying innovation around B2B2C, by enabling consumers place order through their app, but
fullfilment happening through local retailers, thereby adding newer demand avenues for last mile retailers..
Note(s):
1. Selected companies have been included to illustrate the respective buckets basis RedSeer analysis
2. eB2B2C includes end consumer base initiative such as customer ordering via app but fulfillment through local retailers, customer loyalty
programs etc.
eB2B Retail
Marketplace for Brands,
Wholesaler/small Enterprises
(sellers) and Retailers (buyers)
Listing Platforms
Enable supplier/ buyer
discovery on platform;
Transaction is offline
Customer
Ancillary
Supplier
O.E.M /
Brands
Raw
Material
Retailer
B2C Online Platforms
Direct selling platforms
to end customers
Raw Material Focussed
Online marketplace and
auctioning for raw material
used by industries
Distributor/
Wholesaler
MRO Focussed
Online marketplace
and enterprise sales of
manufacturing supplies (MRO)
eB2B2C2

21
Traditional retail is all about wading through one challenge
after another
During our conversations with various people in the whole retail chain, the pain points they faced dealing with the
‘old school’ system of traditional retail were clearly visible.
Tracking and monitoring the products from seller to my place is difficult due to the lack of technology involvement.
~Class A FMCG Retailer, Patna
The whole idea of omni-channel retail resonates the most with eB2B players. They can help solve one of the
biggest pain points of a retailer in today’s world, losing customers to online marketplaces. ‘
My customers are finding online prices of daily needs cheaper and more convenient.
~Class C FMCG Retailer, New Delhi
Small town retailers mostly lose out on on-boarding brands as they might not meet the minimum order quantity
(MoQ) requirements.
I don’t meet the minimum order quantity requirements of brand appointed wholesaler; the independent wholesaler is
unreliable and charges extra.
~Class C Mobile Retailer, Guna
Ambitious but sadly with limited means, retailers sometimes might not have the tech knowhow to pull off things
like a successful loyalty program.
I want to introduce some loyalty programs that actually increase the customer spend –
have tried manually but it did not work.
~Class C FMCG Retailer, Mysore
eB2B, along with eB2B2C, is the potential problem solver of all these issues and can help even the smallest of
retailers to be equipped with tech and future proof their business.
Challenges related to daily operations
Challenges related to end-consumer
Sometimes, the price of certain products are high
when compared to online channels.
~Class B Electronics Retailer, Ujjain
My customers want availability of several SKUs of
product. My store outlet has limited capacity.
~Class B Fashion Retailer, Bengaluru
I cannot purchase limited quantity from a local
wholesaler rather I have to buy clothes in bulk every
time which leads to over-inventory.
~Class B Apparel Retailer, Thrissur
I need to travel to Ahmedabad, Surat, Jaipur or
Mumbai so that I can get different cloth varieties
from wholesaler, due to which, involves an
additional cost.
~Class C Apparel Retailer, Hyderabad
I want to introduce some loyalty programs that
actually increase the customer spend – have tried
manually but it did not work.
~Class C FMCG Retailer, Mysore
Monthly working capital is not sufficient at times
where I am thinking to ask financial assistance.

22
Product
Product
selection
Fill rate/ SKU
availability
Pricing
Prices
Trade schemes
availability
Logistics
Pin code coverage
O2D times
Logistics cost
Credit
options
1
Credit period &
duration
eB2B is resolving challenges compared to other channels
including traditional retail for buyers
During our survey, most of the respondents showed higher satisfaction with eB2B retail in most of the parameters
ranging from product selection, fill rate/SKU availability, prices, trade schemes availability, ease of logistics,
interest rate on credit among other things.
Satisfaction w.r.t to sourcing channels for buyers
% of respondents, N = 1248
How satisfied are you with the following parameters related to sourcing channels? (On a scale of 0-10)
Direct
Distributor
Un-organized
Wholesaler
Cash & Carry
eB2B
0 4 7 10
Note(s):
1. Not applicable for Cash & Carry

23
Awareness about eB2B platforms is helping convert a host
of non-believers
Tier 3+ Cities
40%
Tier 1 & 2 Cities
62%
Metro Cities
44%
Awareness of eB2B platforms
Are you aware of eB2B platforms for sale and purchase of goods. Check “Yes” if applicable.
Willingness of respondents not using eB2B to use in future
% of eB2B non-user/ eB2B-aware respondents, N = 790
Open to try
eB2b
40%
No
Maybe
Yes
25%
35%
More people are getting to know about eB2B platforms
surprisingly on the back of positive word of mouth
endorsements by users. A rise in awareness has helped
in increasing the user base as everyone wants to
experience the merits attached to dealing with an eB2B
player.
Almost 62% of the respondents from tier-I and tier-II
cities know about these platforms. Many who have
heard about eB2B players are either willing to order
from them or have already shifted to them as their
primary supply channel.
The ease of ordering and having the option of not
keeping their establishment closed for a supplies run is
another factor which is pulling retailers towards eB2B
players.
Driven by the merits, ~60% of non-users are willing to
try eB2B.
My friend in the city informed me about eB2B
players. I was drawn to the idea that I won’t have to
shut my shop for sourcing products as I could just
place order online from my smartphone.
We started hearing about eB2B players around
a year back. For sellers it has been great as it has
opened access to markets and buyers. Earlier we
had to go on tours to get orders.
I saw ads of some eB2B players on TV. I am happy
with current sourcing channel but good to know
that there are alternatives.
Buyers Speak

24
60%
56%
42%
24%
67%
Wider market reach/access
Logistics Support
Payment Terms
Predicability of demand
Inventory management
and end-customer insights
(tech support)
Primary trigger for selling through eB2B platforms
% of respondents, N = 30 (Sellers)
Select the primary trigger for selling on eB2B platforms
Sellers also give a big thumps up to eB2B’s wider market
reach, tech enablement and logistics support
Time spent for looking for buyers is very high
(e.g. visiting different stores, cities, etc.)
Credit is a big pain point as every retailer
wants to buy on credit.
Unsold inventory and inventory
management cost is a big concern.
Logistics management - retailer expects
wholesaler to arrange delivery - reliance on 3PL
leads to inconsistency and in some cases losing
out on clients due to bad experience.
Sellers Speak

25
In an age when ordering services, checking facts, discovering restaurants is all done in palm of the hand courtesy
the ever evolving smartphone, both buyers (retailers, wholesalers) and sellers (distributers) want the convenience
of a digitally connected life. The consumption of data, and further thanks to the Jio effect, has removed most of
the socio-economic barriers around who uses the internet and who does not.
Many retailers after losing out to online players, are now trying to evolve, by leveraging some tech back up from
eB2B players to fight back.
Post demonetisation and massive campaigning by the government digital payments for day to day buying has
become a habit for a large chunk of people in the country. So many retailers are now trying to integrate it as part
of the payments system.
In the age of digital living, ambition also flows seamlessly be it tier-I or Bharat cities. The hope to expand beyond
their location has become a great pull for sellers to tie up with eB2B players.
Moreover, eB2B will merit from increased digital appetite
across buyers and sellers
Metro Tier-1 & 2 Bharat Cities
Sellers Speak
Sometimes, I run out
of the stock because
of variance in demand.
Market intelligence that
helps with demand
predication may be
helpful. lack of demand
predictability.
Apparel Wholesaler, Bengaluru
Although, we keep a
track of our inventory,
some support/ assistance
to determine the optimal
order placement quantities.
I am going to Mumbai next
week after Diwali to enquire
about solutions.
FMCG Wholesaler, Ujjain
I want to cater to Wide
range of retailers , but
currently there are very less
retailers in my geographical
location; I will be willing to
try out if online platforms
helps me connect to new
retailers.
Footwear Distributor,
Moradabad
Buyers Speak
Nowadays my
customers want to pay
through UPI. I want
a platform that helps
integrate different UPI
options with my sales log/
software system.
I lost out a few
customers because
BigBasket was offering
good promotions. I’ll be
interested to inquire if
there are ready technology
options that helps
introduce loyalty programs/
promotions that I can try
out.
My loyal customers
often take goods on credit.
Technology can be helpful
in keeping an accurate
log and follow up with
customers.
Class B Electronics Retailer,
Kolkata
Class B FMCG Retailer,
Kolkata
Class C FMCG Retailer, Guna

26
NPS1
of eB2B platforms
N = 1248
How likely are you to recommend the following sourcing/purchasing channels to other
retailers? On a scale of 1-10
Direct from
brands
eB2B
platforms
Cash & Carry
stores
Distributor /
Wholesaler
Promoters Neutral Detractors
28%
63%
-9%
27%
66%
-7%
37%
55%
-8%
43%
52%
-5%
19% 20% 29% 38%
NPS for ‘eB2B platforms’ is the highest among available
sourcing channels
Net Promoter Score (NPS) has come out to be the highest for eB2B platforms when compared to everyone
ranging from brands, cash and carry stores as well as distributers. Retailers dealing with eB2B players have been
able to grow and expand, thanks to the seamless and convenient flow of inventory, help with warehousing and
logistics as well as credit options. More than 43% of respondents believe that eB2B is the sourcing channel that
they would recommend to others. With more adoption, this %age would surely go up.
Note(s):
1. NPS =% Promoters (Score 9-10) -% Detractors (Score 1-5).
Source(s): RedSeer Analysis)

27
Favoured by the government and over a BN dollar in
investments, Indian eB2B retail is more lucrative than ever
Key Recent Policy Changes
2016 - eCommerce Clarifications
• Bars foreign backed companies to keep inventory or
sell products directly to consumers.
• Capped total sales originating from one vendor at 25%.
2019 – New policy changes
• Restrictions put on sale of products where the market
place owns a equity stake.
• Restrictions put on exclusive listings.
• Restrictions put on value of inventory sourcing
allowed from one wholesaler
Pressured margins in eB2C
Democratisation of marketplace limits
marketplace’s ability to offer discounts
Regulations were tightened for
e-B2C companies but remain
very investor friendly for e-B2B
giving push to the segment.
B2C
• 100% FDI in “single-brand”
retail, e.g. Ikea
• 51% FDI in “multi-brand”
retail
• 100% FDI in food retail if
all the products are locally
sourced
B2B: 100% FDI allowed
General India
FDI Policy
$1,122 MN
26 28
338
730
India eB2B Investments:
2016 – 2019
USD MN
Any company operating in India has dealt with regulatory issues
sometime or another. The ecommerce space is no different.
While eB2C companies have over the years faced a slew of tight
guidelines, eB2B has had a smooth sailing.
The biggest fillip the eB2B space in India got in the recent times,
was the allowance of 100% FDI in the B2B sector. This has
opened a floodgate of opportunities for the sector. FDI norms in
the recent times have been rejigged to bring in more international
investments. The government has also allowed 100% FDI in
‘single-brand’ retail, and more recently food retail with a rider that
all the products need to be locally sourced.
While between 2016 and 2019, around $1.1 BN in investments
have been made in eB2B space in India, a lion’s share of those
investments have been made this year as more than $730 MN in
investments were made in this space into various players.
Note(s):
1. 1 USD = INR 70
Source(s): RedSeer Analysis)
2016 2017 2018 2019

28
eB2B outpaces eB2C sectors proving to be much more
capital efficient
Our research indicates that eB2B sector is growing at a much higher speed than the eB2C sector. Investments
that have gone into eB2B space have been much better utilised vis-à-vis the eB2C space that has seen big dollar
figure investments being made over the years, which is indicated by the GMV per investment dollar until FY 19
for both of these sectors. eB2B generated around $3.5 GMV for every dollar invested, almost 1.7 times when
compared to eB2C.
Note(s):
1. Measured by time in years to reach the GMV level. Higher the number of years taken, lower the speed of growth
Sector
GMV
FY19
($
BN)
GMV / Investment $ - cumulative until FY 19
eB2B 3.5 eB2C 2.1
High Growth
Food-tech
Hotel-tech
Mobility
E-Pharma
Slow Growth
Medium
Growth
E-Tailing
30
25
0
Low Speed of growth1
High
1
2
3
4
5
6
E-B2B
Compared to the other digital commerce sectors including hotel tech, food tech, e-pharma and the mobility
space which are all witnessing medium speed of growth, eB2B is growing much faster, which proves that the
sector is capital efficient.

29
Note(s):
1. 1 USD = INR 70
eB2B will ride on the eB2C e-commerce wave
We believe that there is a direct and strong correlation between growth of eB2C and expansion of eB2B in the
country. eB2B has been and is going to further benefit from the infrastructure, digital ecosystem and digital
maturity (including habit formation) which eB2C growth will enable. This is the same phenomenon that struck
China, UK and US among other mature markets.
With the supply chain and logistical capabilities created by eB2C players, eB2B would be able to expand across
the country. The Chinese eB2B market size is the largest in the world worth over $1990 BN. India’s market size
stands at just $1.7 BN in FY19. But the growth potential for eB2B is immense and could go up to $60 BN as eB2C
penetration is set to rise further.
E-B2B & E-B2C Penetrations – Global benchmarks
%, FY 19
10%
4%
20%
30%
40%
40%
10%
Low High
eB2C
Market
Penetration
(%,
2019)
India
30%
20%
US
$1100 BN
eB2B Market Penetration
(%, 2019)
UK
$140 BN
China
$1990 BN
4.8%
($60 BN) (FY 25F)
$832 BN
Un-organized B2B
0.24%
($1.7BN)
FY 19
0%

30
Note(s):
1. Others include Jewellery & Watches, Furniture & Furnishing, Pharmacy & other smaller categories such as Toys, Sports, Alcoholic Beverage &
Tobacco, Stationery, Luggage etc.
2. 1 USD = INR 70
Driven by the growth drivers as elaborated above, eB2B market
is expected to grow at 35x by FY 25, at a CAGR of >80%, with all
categories expected to witness healthy growth
Over the next six years, tier-II and Bharat cities would be the real growth driver for the eB2B space. We estimate
that in FY 25, eB2B will witness strong penetration in India in almost all categories ranging from fashion,
consumer durables, FMCG and grocery.
India – E-B2B Retail
USD BN2
FY 19
$BN
eB2B
Penetration
1.7 0.24%
FY 25F
60 4.8%
2
8
%
9% 54% 28%
Others1
Fashion & Accessories Beauty & Personal Care
Consumer Durables & Electronics (Including Mobile) FMCG & Grocery
Fashion &
Accessories
Beauty & Personal
Care
Consumer Durables &
Electronics
(Including Mobile)
FMCG & Grocery
CAGR
FY 19-25%
85% 55% 90% 70%
eB2B
penetration
FY 19 (%)
0.2% 0.8% 1.3% 0.1%
eB2B
penetration
FY 25F (%)
~4.2% ~7.0% ~22.5% ~2.1%
Key growth
drivers
Increasing penetra-
tion in Tier 2+ cities
is expected to drive
growth.
Category is domi-
nated by few large
players (brands).
Growth is expected
to lag other high
growth segments.
High penetration
and acceptancev
of online channel in
eB2C is expected to
have domino effect
on eB2B.
Local sourcing and
efficient supply
chain is expected to
drive future growth.
81%-CAGR%
4% 8%
5% 41% 43%
6% 3%

31
Thereby, eB2B will outpace eB2C
A host of growth drivers as detailed earlier, will help the eB2B sector pace ahead of eB2C. Amidst several supply
chain issues that affect country’s large un-organized retail market base, more people will continue shifting
towards eB2B. Moreover, favourable government policies as well as high receptiveness of buyers and sellers
towards eB2B will further enable the sector growth. The eB2B space will also continue cashing on the increasing
penetration and influence of the eB2C space in the country.
eB2B Growth Drivers
Favorable govt.
policies
Opportunity from large un-
organized retail market
Increasing eB2C
penetration
High receptiveness of buyers and
sellers towards eB2B
Higher capital efficiency
ratio of eB2B as
compared to eB2C
Sector
GMV
FY25
forecast
($
BN)
High Growth
Food-tech
Hotel-tech
Mobility
E-Pharma
Slow Growth
Medium
Growth
E-Tailing
180
160
0
Low Speed of growth High
10
20
30
40
50
60
E-B2B

32
3
Current Indian eB2B business
models - “What it takes to win”!

33
The varied models of eB2B players
Multiple business models have already come-up in this sector, driven by immense opportunity that everyone
sees, as quantified earlier. While there could be multiple ways for classifying these models, we believe that these
models try to differentiate on their operating model on 2 key axes.
The first axis is basis inventory ownership. Some companies want complete control on what is being sold on its
platform and own the inventory stored in their centralized warehouses. Others prefer inventory fulfillment through
managed tech led JIT inventory model.
The second axis is driven by tech led vs people led (FoS) demand generation.
Note(s):
1. Selected companies have been included to substantiate the business models basis RedSeer analysis
India eB2B Retail Business Models1
100%
digital
100%
FoS
Products are owned by the
e-com entity and stored at
centralized warehouses
Inventory fulfillment through
managed JIT inventory model
or through Logistics network
connecting suppliers and retail-
ers with no products of its own.
Inventory based – Tech Led
Inventory based – Assisted
Asset Light Technology
Led Marketplace
People Led Marketplace
Self-help digital
ordering / demand
generation
Tech/ App Led1
Assisted ordering /
demand generation
Assisted through
Feet on street (FoS)
100% owned inventory No inventory
When we plot the various existing players on the 2 axes, 3 business models come out:
1. ‘Asset Light Technology Led’ marketplace, which relies more on pure tech led demand generation, in addition to
relying on JIT inventory.
2. ‘Inventory based - Tech led’ players, who maintain their inventory, but rely more on tech led demand generation.
3. ‘Inventory based – Assisted’ players, who maintain their own inventory in their warehouses, plus they promote
FoS assisted demand generation i.e. they have their sales force who visit the respective buyers for taking or-
ders, in addition to also having app support.

34
Less is more for Asset Light Technology led marketplace
In an asset light technology based model, sales are majorly driven using digital marketing campaigns run on the
technology led marketplace platform. Also they do not assign sales targets to their limited salesforce personnel.
In an inventory based assisted model, sales are driven by in person interactions, bringing in a direct connect
between the retailer and eB2B platform. It works on territorial sales model, with area sales managers assigned
quarterly or annual GMV targets.
GMV ($ MN) per Feet-on-street (FOS)
Asset Light
Technology Led
Marketplace
Inventory based -
Assisted
~$3 Mn
per FOS
~$0.2 Mn
per FOS
15X
Different business models aim at the common goal of
addressing buyer and seller pain points
While the business models might seem different, there are certain synergies in the way they address issues
around demand fulfillment, availability and quality of a product, logistics, credit facility and pricing.
Both asset light technology led as well as inventory based tech marketplaces work through helping a retailer
adapt to ordering online, rather than relying on seller’s feet on street network. Product availability in both models
is determined through the strength of seller partnerships.
When it comes to maintaining quality control of products, while an asset light technology marketplace has
managed warehousing, strict SOPs and a highly controlled supplier network, inventory based eB2B players
control warehousing and of course have robust SOPs.
Logistics for an asset light eB2B marketplace are all about close knit partnerships with third party logistics
players (3PL). While 3PL manage it, the eB2B keep a close watch on all warehousing and delivery operations. For
an inventory based eB2B, logistics are mostly an in-house operation on the back of a controlled network to handle
warehousing as well as delivery.
Pricing in these two models might vary a little bit as the parameters are different. An asset light eB2B has to
factor in operational efficiency, strength of the network, exclusive partnerships, managed invoicing procedures
and multiple monetization levers. For an inventory based eB2B model, effective demand forecasting and
inventory management is extremely important for pricing.

35
Asset Light Technology Led
Marketplace
Inventory based – Tech Led
Inventory based –
Assisted
Demand
Fulfillment
Completely technology led, through retailer adapting to
ordering online, rather than relying on seller’s feet on street
network.
Predominantly driven by
feet on street model as on
date.
Product
Availability
Determined through the strength of seller partnerships (as
observed through fill rates)
Determined through the
strength of backward
supply chain sourcing and
supplier partnerships
Product Quality
Control
Determined through
managed warehousing,
robust SOPs and controlled
supplier network (as
observed through damaged
products and return rates)
Determined through
controlled warehousing
and tech driven quality
control SOPs
Determined through
controlled inventory
management procedures
and oversight
Logistics
Driven by 3PL partnerships,
robust SOPs, technological
oversight, and warehousing
network (as observed
through O2D and delivery
timeline compliance)
Driven by partnerships or internally controlled network,
robust SOPs, technological oversight, and warehousing
network
Credit Facility
Determined by partnerships, buyer quality, and regions, categories catered to by the
platform
Pricing
Determined through
operational efficiency,
strength of network,
exclusive partnerships,
multiple monetization levers
and managed invoicing
procedures
Determined through
effective demand
forecasting, inventory
management, monetization
levers and exclusive
partnerships
Determined through
effective asset utilization,
strength of network,
exclusive partnerships
and managed invoicing
procedures
The third model inventory based assisted eB2B marketplace is much more personal in the way it creates and
fulfils demand. Mostly driven by ‘foot-soldiers’, product availability is determined through the strength of the
backward supply chain sourcing and supplier partnerships. For them pricing is all about effectively utilising
assets, capitalising on the strength of network, exclusive partnerships and managed invoicing procedures.
For all the three models providing credit facility depends on partnerships, buyer quality, regions and categories
catered by the platform.

36
Warehouse/
Inventory
Brand &
Manufacturer
Farmer’s Agent /
Producer
C&FA
Wholesaler Distributor/JIT
Retailer / Wholesaler /
Corporates
End Consumer
Demand Generation:
Assisted (FoS)
Demand Generation: Tech Led
Demand Generation:
Tech Led
Mills / Factory
Applicable for selected players such as
Demand Generation:
Assisted (FoS)
• Leased by online player
• Inventory management
• Perform QC of products
• Packaging and barcoding
• Schedules delivery
• Perform QC of products
• Packaging and barcoding
• Schedules delivery
Bridging gaps between sellers and buyers through tech, eB2B
players are gaining traction
‘An almost’ one stop shop solution providing a whole bouquet of services has made eB2B popular in a short span
of time. What eB2Bs have successfully done is making both sellers and buyers realise that everything starting
from brands / manufacturers, reliable warehousing and logistics, inventory management and payments solutions
can be obtained on a single platform.
Most of the players in the eB2B space have been able to plug major gaps in the retail chain and made the process
of buying and selling seamless.
Innovative ideas that address actual needs of sellers and buyers have proved an important factor in making eB2B
successful. Efficiency of the entire supply chain is the key for a successful retail operation. eB2B players are
constantly innovating, tweaking and bettering the tech to make retail operations smooth. During our research
we came across many such examples of tools and processes players use to make operations run smoother.
Innovation on the back of technology can be seen at every step of the operational model be it planning, buying,
moving, selling as well as managing.
India – E-B2B Retail Value Chain1
Note(s):
1. Selected companies have been included to substantiate the business models basis RedSeer analysis

37
India eB2B Retailer Operational Model
Manage
Sell
• Brand specific
platform to enable
them to sell directly
to buyers and run
highly targeted
campaigns
(Udaan,ShopX).
• Retail as a
service integrated
with POS to
enable mom &
pop stores to
perform efficiently
(Jumbotail).
• YARDSTICK app for
efficient salesforce
management
(ShopX).
Move
• Established
network of channel
partners to
ensure last-mile
delivery (Amazon
Business).
• Charge
commissions on
every transaction,
by connecting
seller and buyer
on a B2B retail
platform.
• B2B2C App
digitizes last
mile transaction
between retailer
& end-consumer
(ShopX).
Buy
• Own their logistics
fleet (Amazon
Business, Big
Basket, Udaan),
and also tie-
up with 3PL
(Jumbotail, ShopX)
for delivering
goods to retailer.
• Perform quality
check of products
at distribution
centers (ShopX &
Jumbotail).
• Unbundled 3PL–
All partners use the
tech provided
by platform
(ShopX).
Plan
• Own their logistics
fleet (Amazon
Business, Big
Basket, Udaan),
and also tie-
up with 3PL
(Jumbotail, ShopX)
for delivering
goods to retailer.
• Perform quality
check of products
at distribution
centers (ShopX &
Jumbotail).
• Unbundled 3PL–
All partners use the
tech provided
by platform
(ShopX).
• Analytical tools to
ensure automatic
inventory
replenishment
at retailers’ end
(BigBasket).
• Restock Inventory
Tool for online
sellers to help
them manage their
inventory levels
(Amazon).
One of the youngest and fastest growing unicorns in the country, Udaan, has positioned its revenue model around
charging on add-on services such as credit and advertising, keeping the core service (product portfolio and logistics)
cost low.
Driven by solid tech and acute knowledge of on-ground bottlenecks in the retail space, ShopX has developed a unique
just in time inventory (JIT) management system that boosts efficiency and reduces wastage of goods received. Not
only that, it has created a B2B2C model which is enabled via its tech-based solution. Retailers working with ShopX are
now selling offline as well as online and are becoming future ready.
Another player trying to make a difference is Jumbotail, which has been working on transforming kirana shops into
convenience shops. Thousands of kirana store owners rely on its robust in-house supply chain and logistics for
procuring staples and FMCG. It provides tech driven solutions which effectively is “Retail as a Service” platform, that
helps sellers with everything starting from point of sale solution to inventory management systems to help them
modernise their stores.
eB2B firms such as BigBasket have developed analytical tools that ensure automatic inventory replenishment at
retailers’ end. Farm-to-fork model which is a factor in running a successful fresh produce business is being perfected
by players such as Ninjacart who directly procure from farmers.
Few of the largest logistics networks and delivery fleets are owned by companies such as Amazon Business,
BigBasket and Udaan. Filling the gaps in the supply chain has also helped in coming up with varied revenue models.
Some companies charge commissions on every transaction, by connecting seller and buyer on the B2B retail platform.
Companies such as Udaan and ShopX enable brands to sell directly to buyers and run highly targeted campaigns.

38
• Commissions charged on every
transaction from buyers (0%-4%)
• Credit provided to buyers at ~1.5-2%
• Advertising revenue earned from
sellers on per category basis
Revenue Sources
Delivery Network
Vendor
Distribution
Centre / Hub
Retailer /
Wholesaler
3PL + Captive
Udaan’s “secret sauce” for success
Country’s one of the most successful and growing eB2B unicorn Udaan has in just three years managed to create
a mix of captive and third party logistics partners, for an highly efficient last-mile delivery. It has helped it to reach
out to a larger set of retailers across most pin-codes in the country.
The marketplace has been designed keeping in mind small and medium businesses in the country. It has been
over the years bringing traders, wholesalers and manufacturers on to a single platform.
It has a network of 6,00,000 plus buyers and sellers across India which is one of the highest in the eB2B retail
space. During our research, we found out that last year, Udaan picked up products from sellers across 80 to
100 cities and delivered it in 800 cities and towns across India. Its major product categories include fashion,
electronics, mobile phones, food, grocery, beauty and personal care items.
Udaan has three major revenue sources. Its commissions on every transaction from a buyer are around 0-4%. At a
nominal rate of 1.5% - 2%, it gives credit to buyers. Listings or advertisements are also one of the main sources of
income for the company, and is earned from sellers on per category basis.
The company has started expanding its warehousing capabilities, and also launched a secure payments platform
called UdaanPay. Thanks to the option of a personal and secure conversation in real-time in the multiple Indian
regional languages, as well as the option of a user being able to directly negotiate the terms of credit with the
seller, Udaan has been able to gain a massive following. It helps buyers and sellers expand their business through
MyBiz, Feed, Share, Connections to grow market presence and creating brand interest. Also almost 75% of the
logistics requirements are handled by the company in-house.

39
• Commissions charged on every
transaction from buyers (~3-4%)
• One-time registration cost for buyers
(~Rs. 1000)
Delivery Network Revenue Sources
Dist./WH
Quality check &
Aggregation Hub
JIT sourcing,
no inventory
Managed
3PL
ShopX is giving small retailers the power of technology
to dream big
For a small retailer in Bharat, expanding business beyond certain parameters is mostly an impossible dream.
For them making compromises on sales and inadequate inventory is part of doing business. ShopX, since 2015
has been trying to change that. It has been helping these small retailers not only dream big, but is also making
them come true. Extensive market research, understanding ground realities and being in constant touch with the
market has helped the company create a host of solutions specific to small retailers.
The company has given these small retailers access to premium brands, equipped them with robust POS
systems, inventory management solutions, as well as given them access to online customers through its B2B2C
app.
The company that has for the last four years future proofing one small retailer at a time, now has more than
150,000+ retailers in its network from across the country and approximately six MN end customers.
The company has created strong presence in the country, and is currently operating out of 440+ towns and cities.
It has partnerships with 550 plus brands from more than 50 manufacturers.
Other than the usual categories such as FMCG, electronics and mobile phones, it also provides value-added
services such as digital payments and recharges, which act as additional revenue streams for its retailer
partners. While it charges around 3-4% in dommissions from buyers, it also takes a one-time registration fees that
costs around Rs 1,000.
ShopX retailer app suite includes a Retailer app, as well as a consumer app, which the retailers can activate for
selected consumers. The consumer app creates an interesting B2B2C play, as consumers can use this app for
placing orders, but the demand fulfillment happens through local retailers. On top, ShopX Suvidha, is alending
platform that gives credit interest free through a partnership network of banks and NBFCs. In addition, ShopX
also offers tools such as Yardstick, which is a Salesforce management platform and SmartApp which simplifies
retailer account for performance and order management. This comprehensive technology solution has resonated
well with ShopX’s user base.
Data
Flow

40
• Commissions charged on
every transaction from
sellers (~3%)
• No registration charge/
commissions taken from
buyers
• Credit provided to buyers
at ~1.5-2%
• Mark up from Private
labels
Miller/
Producer
Brand
Fulfillment
Center
Distributor
Distributor Center / JIT Led
Retailer /
Wholesaler
Jumbotail eases the mammoth task of connecting brands to
Mom & Pop shops through it’s in-house supply chain
Jumbotail which started operations in 2016 uses technology, data science and design as the three key levers for
creating differentiation in the market and achieves competitive edge in the food and grocery segment.
The company is present in Bengaluru, Mysuru, Tumkur and Hyderabad. It has a total of 2 fulfillment Centers and 8
Distribution Centers in Bengaluru and 1 fulfillment Center in Hyderabad. It charges commissions of around 3% on
every transaction.
The company offers Mom and Pop stores with wide range of high-quality staples, packaged foods, personal care
and home care products from all the leading brands and staples producers. It also has its own set of private label
brands.
The firm also provides credit and working capital facility to the potential buyers from their lending partners. The
key differentiator for Jumbotail is providing Mom and Pop stores and tuck shops ‘Retail as a Service’. It has fully
integrated POS machines and softwares to run the store like modern convenience retail stores.
In addition, Jumbotail also provides in-store analytics, loyalty programs and O2O services to drive retailer
stickiness.

41
• Commissions:
General goods: ~4.5%
Private label: ~6.5-7%
• No registration charge taken from
buyers
Dist./WH
Warehouse
Inventory
storage
Captive
A fully integrated model, and strong inventory management,
BigBasket has it all
One of the first e-grocers in the country, BigBasket started its eB2B operations in early 2016. Over the years,
it has established a strong network of over 27,000 retailers across the country. It is doing well in the top four
metropolitan cities including Delhi NCR, Mumbai, Bengaluru and Hyderabad which make up for approximately
50% of its B2B GMV in FY19.
Its main product categories are food, grocery and FMCG products which contribute to around 80% of its B2B
GMV. HoReCa customers contributed another 10% of total annual GMV in FY19. BigBasket earns around 6.5-7%
on private labels and approximately 4.5% from general goods in commissions.
The company has set up large warehouses spanning over 25,000 square feet in 10 metros and Tier-I cities across
India. It gives benefits to its retailers who are members on the platform and give an additional discount on basis
of their order quantity. On the tech front it uses ‘Flexi’ app platform to process orders for bulk purchases by large
retailers.

42
Delivery Network
Farmers
Collection
Center
Fulfillment
Center
Distributor Retailer /
Wholesaler
• Commissions
charged on every
transaction from
buyers (~18-27%)
• One-time
registration cost for
buyers (Free)
Revenue Sources
Ninjacart slashes farmer’s biggest enemy, non-value adding
middle-men
Eliminating unnecessary middlemen, who fleece hapless farmers, has been one of the biggest achievements of
Ninjacart. A service which started as a fresh produce supply chain operation in 2015 has now gained a network of
13,000 plus farmers. With major presence in Southern India, Ninjacart now runs operations in seven cities.
It has at present around 60 collection centres for fresh produce from farmers across the country and almost half
of those are in Karnataka.
A champion of the farm-to-fork model, its primary customer base includes major retailers, malls and restaurants.
Fresh produce is a high margin game, and Ninjacart on every transaction charges anywhere between 18% and
27% commission.
Farmers are the real winners here as they get 20% more revenue than the existing market. They also ensure that
farmers within 24 hours get payments for the supplies. Logistics of fresh produce need to be fast due to the
limited shelf like, Ninjacart ensures delivery from farm to store happens within 12 hours.

43
Product
Product
selection
Fill rate/ SKU
availability
Pricing
Prices
Trade schemes
availability
Logistics
Pin code coverage
O2D times
Logistics cost
Credit
options
Credit period &
duration
0 4 7 10
Player 1
Player 2 Player 3
All players are perceived to have their own strengths
During our survey, we found out that respondents believe most of the eB2B players come with their own set of
strengths and weaknesses. In general most of the respondents have shown high satisfaction levels with the
services of these players.
While some have a better product selection, others offer better competitive pricing and trade schemes. Logistics
and reach is something most of the players are working on and are improving.
Challenges w.r.t to sourcing channels for eB2B platforms
How satisfied are you with the following parameters relating to sourcing channels? (On a scale of 0-10)
Over the years, the un-organized B2B market has created a lot of holes in the retail value chain. Pain points are
a plenty for both the buyers and sellers in the retail value chain. For a single player to fill all these gaps is quite
difficult. The country’s eB2B players need to address all these issues that are currently affecting buyers and
sellers, to win in this complex but interesting market.

44
Shorter credit period/
Difficult credit terms
Geographic coverage
(serviceable pin codes)
Conflict Resolution
Marketing support/
services
End consumer
behaviour/ analytics
Listing process/ TAT
It is not like eB2B players have been able to address all pain points. There are a few pain points which if
addressed can make these platforms much more user friendly and attractive for Bharat.
During our survey, buyers and sellers charted out few key pain points that eB2B players need to address. While
credit is offered by a few eB2B firms, the terms and conditions attached to it are sometimes difficult.
Currently, the biggest challenge with eB2B is around credit and logistics coverage. We operate on very thin
margins and we need these companies, to help address inefficiencies in value chain so that we can sustain
and expand.
~ Wholesaler of mobile accessories, Mysore
For buyers and sellers, the needs and wants of an end user are still somewhat a mystery. They all look towards
eB2B players who have the technology and the knowhow to crack this code, but are yet to get any answers.
What we need from eB2B companies are better interface and understanding of the end customer. Right now,
no one is offering that in a substantial way.
~ A snack brand owner
In this fast paced world, no one including buyers and sellers like to be caught in long drawn verification processes
for uploading and listing on eB2B platforms. Be it a tier-I seller or a small town Kirana shop owner, no one wants
to be caught in ‘corporate red tape’.
Although, the user interface support multiple languages products, companies need to make the process a
bit more efficient. It takes too long for verification and uploading the listing of products on the platform.
~ Kirana shop owner from Ujjain, Madhya Pradesh

45
4
“The Path to Profitability”!

46
1
Focus on ‘Buyer Stickiness’!
• Driven by a margin sensitive play,
‘Buyer’ engagement is critically im-
portant in this market to enhance CLV
(Customer Lifetime Value).
• The same can be increased through
acting as a one stop shop for all the
Buyer needs and addressing the key
pain points.
2
‘Seller Stickiness’ is equally important!
• Strong relationship with sellers (in-
cluding brands) could open up new
monetization streams, and ability to
extract better margins.
• The same could be achieved by
offering a mix of services such as
new product launches, data insights,
in-store marketing, etc.
3
Stay Lean i.e. Asset Light, & Create
Technologically scalable SCM!
• Since CAC is relatively high, asset
intensity in operations is a fundamen-
tal lever for driving margins efficiency
& profitability.
• The SCM technology platform should
be able to integrate with all partners
across the supply chain, to keep tight
control on O2D, quality control, inven-
tory management and delivery expe-
rience.
• In addition, the SCM capabilities
should be scalable enough to support
category expansion/ diversification.
4
Innovate and Monetize!
• Multi category play rather than
uni-category.
• Focus on Bharat, the future retail
spend key driver.
• Innovate on other monetization
levers (e.g. in app advertisements,
financial services etc.).
• Enable integration with other chan-
nels to create a win-win.
Four key levers will drive Indian eB2B players’ ‘Path to
Profitability’!

47
Acting as a one stop shop to address ‘Buyer’ pain points, and a bouquet of
handpicked services will drive ‘Buyer Stickiness’
Lever 1
1. Act as ‘One stop shop’ for addressing all key pain points:
The greatest service a buyer can get from any eB2B player is finding a single window for addressing all their
grievances and pain points. If any platform is able to prove to a buyer, that they can not only take care of their
business needs but also help them face problems and handhold them through crisis, that eB2B player can get an
ally for life.
» Product availability and quality
» Delivery times
» Pricing
» Minimum order quantity
requirements
» Credit availability
» Inventory management
» Vendor reliability
» Conflict resolution
• Incentivize buyers for ordering through the platforms through loyalty programs.
• Incentivization should also be done at the end consumer level, to create pull and added revenue
for the listed buyers.
• Incentivization can be done basis buyer rating, which could be an outcome of volume and value
of transactions during a period, timely payments, and buyers’ adherence to performance KPIs
2. Drive loyalty programs
Once the goal of addressing the pain points is achieved, it is all about driving in a bunch of services including
having a rewarding loyalty program as well as value added services to drive buyer engagement.
3. Provide ‘Timely conflict resolution’
It is much more important for a digital entity to provide a personal touch to buyers. At no point they should feel
stranded and left alone to fend for themselves in case of any problem during their retail journey. Timely conflict
resolution is extremely important.
• Buyer should only be speaking to one dedicated helpline, irrespective of the different stakehold-
ers involved e.g. irrespective of working with 3PL at the backend, eB2B platform should be able to
resolve any conflicts related to O2D buyer should not need to speak to the 3PL.
• TAT levels should be defined for the various categories of conflicts along with escalation mech-
anism, they should be communicated to the buyers effectively, and thereafter they should be
adhered to.
4. In addition, provide VAS to buyers to drive engagement.
Buyer relevant value added services (VAS) help to further drive engagement. An eB2B player should provide brand
support as needed as well as give personalized feed to buyers driven by their transaction profiling.
Indicative examples include:
• Brand support should be provided as needed.
• Personalized feed to buyers driven by their transaction profiling.
• Additional revenue streams for the buyers as possible e.g. providing popular services such as
ticketing or bill payments for consumers on the eB2B platforms through retailers.
• Innovative B2B2C play such as Consumer ordering online, but demand fulfillment through local
retailer etc.

48
We believe that better seller partnerships can help in increasing margins. Key data insights and leveraging the
network between brands, distribution, retailers and finally customers will further boost seller stickiness.
Also targeted advertisements in allied retail stores, as well as in app advertisements will further boost seller
margins, thereby increasing the stickiness further.
1. General Distribution Margins
Direct procurement, distribution and favorable terms
from brands can lift margins similar to Cash & Carry
levels of 7-9%.
3. In-store Marketing
Targeted advertisements in allied retail stores could
generate additional streams of revenue up to 0.4%.
2. Data Insights
Leveraging the network – i.e. brands-distribution-
retailers-customers, eB2B players could leverage
insights and commoditize data for additional revenue
up to 0.8%.
4. In-App Advertisements
Targeted advertisements on apps could generate
another potential revenue of up to 0.8%.
Great ‘Seller’ relationships, with better margins help in ‘Seller Stickiness’
Potential margins
of 7-11% with direct
brand relationships
0.3-0.8%
0.6-0.8%
0.1-0.4%
7-9%
General
margin
Data
Insights
In-app
adv.
In-store
marketing
8-11%
Total
As a brand, our core focus is
always on brand building and
manufacturing. Once volumes
from eB2B grow, we can even
look at direct distribution.
They can potentially help us
with data and insights on
network including retailers and
customers. eB2C companies
already share insights with us.
eB2B could follow the same
path.
~Packaged Foods Manufacturer
Lever 2

49
Asset Light technology led models are relatively efficient on contribution
margins compared to other eB2B models
Inventory based –
Assisted
Inventory based –
Tech Led
Asset Light
Technology
Led Marketplace
Revenue from sales commissions
(as a% of GMV)
4.0% 4.0% 3.0%
Net revenue from VAS
(as a% of GMV)
1.0% 0.5% 1%
Net Revenue (as a% of GMV) 5.0% 4.5% 4.0%
Less: Logistics & Inventory handling
costs
(5.5%) (4.5%) (0.9%)
Less: Marketing costs(discount) (3.5%) (2.0%) (4.0%)
Contribution margin -4.0% -2.0% -0.9%
Indian eB2B Unit Economics – Models Comparison1
Lesser manpower requirements, no added costs on purchasing and maintaining inventory all help to keep the
burn rate of asset light models much lower than that of an inventory based one. It should therefore come as no
surprise that contributions are the highest when it comes to the asset light technology led marketplaces, vs.
some of the other eB2B business models.
Low High
Contribution Margins
Lever 3
Note(s):
1. The numbers used here are indicative estimates basis our research, and can vary for different players.

50
For any digital commerce company the next level of growth and expansion is set to come from Bharat. Internet
penetration, rising literacy, a young population, cheaper smartphones are all helping in creating a whole new set
of online consumers who want experience and use all sorts of ecommerce services. Tapping into this market for
an eB2B player is extremely important.
Set sights on Bharat and innovate for them
1. Must focus on Bharat – the retail spend driver in coming years!
Tier-wise split by online customers
%, MN Users
Tier-II+ (Bharat)
Tier-I
Metro
CY16
75
CY17
90
CY18
118
CY19
135
CY22F
250
36%
19%
45%
41%
19%
40%
47%
19%
34%
50%
15%
35%
60%
13%
27%
1. Volume: Helps in achieving scale.
2. Value: Efficient margins management
through multiple categories presence.
3. High utilisation rates.
4. Creates a network effect.
Example
Case Study in the next page
2. Efficient multi category play rather than single category focus!
Ideally, a player catering to Bharat
needs to cover all bases and create
multiple category offerings. Global
giant Alibaba.com is a perfect
example of creating a one stop shop
solution for all ecommerce needs.
3. Innovate on other “Monetisation”
levers!
Equally important for an eB2B player is to come
up with different monetisation plans.
1. Financial services, facilitate digital
transactions
2. In app advertisements
3. Enabling targeted product launches for brands
4. Ability to run trade schemes and in-store
marketing for brands
5. Data insights for both buyers and sellers
6. Integrate with other channels such as cash &
carry or eB2C to sell through.
7. Ability to launch private labels
4. Drive tech led innovation on the
demand and supply side to create a win-
win
Demand Side
1. Digital demand generation
2. Technology led targeting through localized
marketing as well as vernacular support
Supply Side
1. Technology led efficiencies to ensure smooth
flow of the goods across the supply chain
with assured O2Ds and higher fill rates.
Lever 4

51
Alibaba’s exemplary growth in this market is driven by its
continued focus on the 4 key levers
Must focus on Rural areas and greater China –
the key retail spend driver
Efficient multi-category play
» 150 MN registered members globally.
» High reach in rural areas and greater China.
» Horizontal focus.
» Led expansion into categories organically
starting with fast moving standardized
products i.e. electronics and accessories and
then gradually everything else as agile supply
chain capabilities were developed.
• Overall EBITDA Margin of around 18% as of year 2019.
• ~0.3 Mn Active Enquiries per day.
Multiple monetization levers through
value added services
1. Alimama - Marketing and Advertising Services
2. Aliyun - Cloud Computing & Data Management
to handle traffic
3. Trade Manager - Enables real time
negotiations
4. CreditDirect - Buyer and Seller Credit Reporting
Platform
5. Alipay - Online Payment Platform without
Transaction Fees
6. Taobao - Free Registration and Commission
Free Transactions
Asset lean tech led value chain
1. Asset Light Business
Model – Virtual Inventory
and No Company Owned
Warehouses.
2. Third Party Logistics
Structure – Avoids High
Operating Margins.
3. In-house Tech led supply
chain management system
for monitoring of operations
and creating efficient supply
chain.
Addressing pain points, building a true one stop shop solution, providing the technology to help smaller
businesses become sustainable for years to come, could be the chain that joins all aspects of eB2B retail
seamlessly.

52
» Retail Value Chain
» Margin Structure
» Seller Pain Points
» eB2B perspective
» Future Outlook
» Channel Breakdown
» Growth Rates
» Competition understanding
» Buyer Pain Points
» User Experience
In Depth Interviews (IDIs): Coverage
We spoke to ~1250 retailers & 40+ merchants pan India to map their pain points and digital
appetite to identify the use case (Current/Potential) of eB2B retail
Survey Coverage
N = 1248
By User Type
eB2B Non-
User
eB2B User
63%
37%
By Merchant Type
Sellers
Buyers
24%
76%
By Class
< USD 40K per
month turnover
> USD 40K per
month turnover
Class B,C,D
Class A
79%
21%
By City
Bharat (Tier
3+ Cities)
Tier-1 & 2
Metro
19%
52%
29%
40 IDIs
Methodology

53
Glossary (1/2)
Definitions and Classifications
Segment Definition
Cities
Metros
Top eight cities by population in India are considered as metro cit-
ies for the purpose of this study: Ahmedabad, Bengaluru, Chennai,
Delhi/ NCR, Hyderabad, Kolkata, Mumbai, and Pune
Tier 1 cities
Tier 1 cities are non-metro cities with population of more than 1
MN
Tier 2 cities Tier 2 cities are cities with population between half a MN to 1 MN
Bharat
Bharat refers to Tier 3+ cities/ villages with population of less than
half a MN
Retail
Channels
Un-organized
Retailing
Un-organized retailing refers to the traditional formats of low-cost
retailing (including unbranded products) and sourcing through
un-organized distribution (non-company led) channels .g. small
wholesalers, Mom and pop Stores, Kirana Stores
eB2B Retail
Online platforms that facilitates the trade between Seller (Brands,
distributors, wholesalers) and the buyers (retailers, wholesalers)
across geographic locations
Brand/
Distributor Led
Brand led distribution channel mostly for branded products. It also
includes supply to modern retail formats such as Exclusive Busi-
ness Outlets (EBOs) and Large Format Retail (LFR)
Cash and Carry
Large store outlets providing multiple product categories for retail-
ers
Retail Stores
Category A Merchants with monthly GMV> USD1
40K
Category B/C/D Merchants with monthly GMV< USD1
40K
Note(s):
1. 1 USD = INR 70

54
Glossary (2/2)
Product Category Definitions
Product Category Definition
FMCG & Grocery
Includes Food based FMCG, Non-Food FMCG, Staples, Grocery and Home Care
etc.
Apparel & Accessories Includes Clothing, Bags, Belts, Wallets etc.
Footwear Includes Men, Women and Kids Footwear
Mobile Includes Smartphone and Feature Phone
Consumer Durables
Includes AC, Refrigerator, TV, Washing Machine, Kitchen Appliances, Laptop/
Desktop, Gaming Consoles, Air Cooler, DTH, UPS/ Inverter, Stabilizers, Heaters,
Fans, Lighting, Vacuum Cleaners etc.)
Jewellery & Watches Includes Gold, Diamond, Silver jewellery, Gems and Watches
Beauty & Personal Care
Includes Hair Care, Skin Care, Oral Care, Bath & Shower, Makeup & Cosmetics,
Fragrances & Deo, Men’s
Grooming and others
Furniture & Furnishing Includes Furniture, Home Décor and Home Textile
Pharmacy Includes medicines and related healthcare products
Others Includes Toys, Sports, Alcoholic Beverage & Tobacco, Stationery, Luggage etc.

55
Report Authors from RedSeer
Anil Kumar,
Founder and CEO
Anil Kumar is the founder of Redseer Consulting. He has been part of engagements
in Internet, Private Equity, Retail CPG and Healthcare among others. He specializes in
growth and investment strategies. Anil is a believer of the data-driven approach in solving
business problems. His consulting approach leverages Data IP, sector expertise and the
client’s core hypotheses. He holds a B.Tech from IIT-Delhi.
He can be reached at anil@redseer.com
Abhishek Chauhan,
Associate Partner
Abhishek heads the Consulting and Diligence practice at Redseer for the Indian Market.
He brings in ~13 years of strategy and consulting experience in Technology, Telecom,
Insurance / Insure tech, Automotive and Consumer Internet Sectors, both in Indian as well
as Global markets.
He can be reached at abhishek@redseer.com
Abhishek Gupta
Senior Consultant
Abhishek has served clients in Retail, Government, Education, ICT, Fintech, and
Healthcare. He brings storing project experience in business growth strategy, market
entry, due diligence, organization restructuring, public policy, and debt restructuring. He is
an MBA from Indian Institute of Management (IIM) – Indore, India (2016) with exchange at
École supérieure de commerce (ESC) de Clermont – Graduate School of Management.
He can be reached at abhishek.g@redseer.com
Vijay Kumar
Associate Consultant
Vijay has worked for several clients in industries such as Retail, E-commerce, Government
and Healthcare. He brings in projects experience in domains such as due diligence, go-to
market strategy, growth strategy and market research (across Indian and MENA regions).
He is an MBA from Indian Institute of Management (IIM) – Udaipur, India (2016) and is CFA
Level 1 certified.
He can be reached at vijayk@redseer.com

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