B2B e-commerce has been a big opportunity for tech-enabled startups in India. However, early entrants including IndiaMart, Industrybuying, Tolexo, and Wydr have been unable to make big with marketplace approach. On contrary, the growth of Bengaluru-based Udaan has been phenomenal and it can be gauged from its massive fundraising and Unicorn status.
Sensing a big opportunity in wholesale space, Paytm Mall has launched a B2B buying app for merchants. Currently, the app offers four categories including Women’s fashion, men’s footwear, personal grooming and gold coins and promises door to door shipping.
The wholesale app also lets merchants become a distributor for headphone and speaker brand – Bluedio and Bozlun. Besides the above four categories, it’s also expected to enable small merchants, including kirana stores, to buy stock from Paytm Mall.
Since Paytm has a strong sourcing capability in China because of Alibaba, merchants will be able to bypass middlemen and brokers that eat up their margin.
Paytm is a fintech firm by DNA and its bigger game is to woo merchants through a credit facility. Access to credit has been a major headache for small retailers. They typically end up borrowing working capital from local lenders who charge exorbitantly.
On the lines of Udaan, Paytm intends to be a platform offering everything – sourcing, logistics (via third parties) and credit access. While Paytm Mall commits credit facility to buyers, it’s yet to be clear whether Paytm would lend on itself or leverage third-party lenders (NBFCs and banks).
Udaan lends on its own book and keeps inventory in large warehouses owned by companies directly owned by it. If Paytm does all these, Udaan would be the primary competitor.
Within two years of its operations, Udaan has been recording stellar growth. At present, it has about 1,80,000 sellers and buyers on the platform. Entrackr’s sources estimate that the platform works with manufacturers in about 130 cities and delivering to buyers across 1,000 cities.
Despite the decent amount of actions in B2B sourcing and lending segments, only a handful of startups have been able to solve sellers’ supply issue as well as credit requirement. Majority of lending platforms focus on facilitating a loan to mid-sized sellers with decent credit record.
Whosoever (Paytm, Udaan or others) solves these challenges for sellers, there is a big reward to take home.