Unlocking Business Potential: Udaan's B2b Marketplace Revolutionizes Trade In India

Udaan is an Online B2B marketplace offering multi-category products. The product catalog includes home & kitchen appliances, utensils, toys & baby care products, hardware tools, sports equipment, electronics, clothing, fashion accessories, home furnishing products, medicines, and more. It brings traders, wholesalers, retailers, and manufacturers in India onto a single platform. Its mobile app is available for Android and iOS users. It helps businesses discover customers, suppliers, and products across categories and connect them to get the best deal. The platform also facilitates secure payments and gives logistics support. With real insights into active trends, and great B2B trade features, Udaan brings to them the power of technology to scale & nurture their business.

Goal

The goal of Udaan is to cut the middleman between the customer and the factory product so that the customer gets the product at the best prices.

Why udaan?

● Udaan has eliminated the intermediaries so that retailers can directly buy from manufacturers at the best price. Udaan chat feature allows users to have a personal and secure conversation in real-time, in a language of their choice. It enables a direct connection between buyers and sellers which allows one-on-one discussions to negotiate terms of trade between transacting parties.

● Udaan has its own logistics system called Udaan Express. Udaan Express (UE) is a leading end-to-end logistics solutions provider, serving clients across the country. Udaan enables small manufacturers, farmers, and brands to market and sell their products across the country at low cost with 100% payment security and complete transparency.

● Udaan provides financial support to the retailer. UdaanCapital is a platform which enables businesses to manage their accounting and get credit using the same platform. Udaan Capital is focused on Small Market Enterprises (SME) trade financing products and services for sellers and buyers to expand their business.

UDAAN EXPRESS

● Providing End to End logistics solutions across India, for Corporates as well as SMEs by using Part Truck Load, thus enabling faster connectivity across all locations within the country.

● Providing convenient door-to-door pickup as well as delivery for all your shipments.

● Access to a single point dashboard on our website – thus making it extremely easy to track all your shipments in a single location

● Providing point-to-point service, directly from the point of pickup to the point of delivery.

● API integration with your own shop website to automate all your logistics system requirements Access to a single point dashboard on our website – thus making it extremely easy to track all your shipments in a single location.

Udaan Capital

Udaan Capital enables small and medium-sized retailers to make purchases for their stores from a wide array of suppliers on the Udaan platform with credit lines provided by its lender partners. Today, more than a third of sales on udaan, India’s largest B2B commerce platform is powered by Udaan Capital according to a company statement.

Udaan Capital is owned and operated by IndusAge TechApp Private Limited (ITPL). ITPL is a digital lending platform and works with finance partners Hiveloop Capital Private Limited (HCPL) and IDFC First Bank to facilitate credit to businesses.

How does Udaan lend money to retailers?

Udaan Capital has developed unique underwriting and risk management tools based on transactional data, thereby enabling credit access. Based on the history and sales of a Retailer, it will be mapped to the Business Development (BD) team.BD will visit and he will try to understand and pitch for credit, collect documents, and based on that credit will be collected

What are the fees for Udaan Capital?

Fees chargeable to the User by the Financial Partner @ 2.25% per month (calculated on a pro-rata basis) for collection of overdue amount in the manner specified under the credit facility agreement entered into between the User and the Financial Partner.

What is the profit margin of Udaan?

From these transactions, udaan makes a gross profit of around 6%, according to analysts.

Credit Limit can be Reduced 

This can happen because of one of the following reasons: 

1. Delayed payment behavior in past or current dues 

2. Being inactive on the platform for a long time. 

3. Retailer purchase on the Udaan platform and payment has been slow

Tenure

The credit tenures offered are short term i.e. for 45 days. Udaan does not have an option to update Credit Tenure/Limit. Retailers need to do regular transactions on credit and re-pay timely. 

*If Retailers are eligible for an increase in credit limit, they will be getting a notification on the app.

Revenue Model

Udaan has been the combination of a marketplace, logistics, and lending.

● Udaan revenue works on the 15% - 18% commission that it charges from the buyers for funding their purchase.

● Udaan also charges for the logistics in the form of delivery charges from the buyer which also varies according to the product and quantity.

● Udaan collects fees from the customer for any return of sales from the customer.

● Buyers pay on delivery unless it is a credit transaction. It provides access to new markets and regions with greater cost efficiency and better price control.

● Udaan provides dealers registered at the platform, garage, and warehousing offerings to allow them to ship items quicker to the customers. Sellers are charged a fee for such warehousing offerings.

● Udaan charges for promoting the product listings on the platform to make sure there is higher visibility among customers within the platform.

Payment Options:

● Cash on Delivery (COD): Udaan allows buyers to make payment upon delivery of the products. This option is available for both credit and non-credit transactions.

● Credit Transactions: Udaan facilitates credit transactions, where buyers can purchase products on credit and make the payment within a specified time period agreed upon with the seller. This option is available for eligible buyers and subject to credit limits and terms.

● Online Payment: Udaan provides online payment options, allowing buyers to make payments electronically through various methods such as debit cards, credit cards, net banking, and digital wallets.

Udaan Weakness

a) Decreasing Profits - The company though increasing its revenue each year is not able to boost the profits too. The profits are decreasing each year which is a major threat to the company.

b) Requirement of Internet - Certain locations still cannot access the Internet. These individuals remain impoverished, forming a barrier across all geographic areas.

c) Unable to manage its Expenses - The expenditures of the company increase with an increase in revenue amount but the hike in expenditure is more than the proportion of revenue.

Udaan Opportunities

a) B2C: The company can develop a platform that deals B2C i.e. Business to Customers along with its current department. This can help in increasing the customer base and revenue sources of the organization.

b) Setting up of Outlets: The company currently trades through an online platform. It can be a great way to increase the customer base by investing in establishing offline outlets in different areas.

Udaan insights

● At first, Udaan concentrated on marketing, but these days it is more concerned with sales. It advertises its brand using Facebook advertisements, Instagram reels, and even by giving customers posters.

● To enhance sales and market share, Udaan offers 5–10% coupon discounts to customers who spend more than Rs 30000.

● Udaan also has its own clothing factory but i.e. it has been divided into two types-

     ○ Private - The company has its own clothing where the margin is 25% - 30%.Since they are the supplier of the clothing the profit margin will be high.

     ○ Marketplace- It is commission i.e. they will receive a commission from the manufacturer who is selling products to retailers.

 

Different Sales Techniques Used by Udaan

Sales Techniques in Lifestyle and fashion have been divided into 3 parts-

■ National Sales Team

■ Field Executive/Business Development Executive

■ Field executives are given 100 seller groups per month which they need to visit each seller and do their marketing

■ Typical sales

Here the sales are done via different zone managers-

■ Regional manager - Every Regional manager has 12-20 team members based on geo-location/size

■ Zonal Manager- Every CMM/ZPM has a full zone(north, south, etc)

■ Telecallers i.e. Remote based

It is a team of 50 members based in Bangalore where their Key Responsibilities Area target is to daily call around 100-150 retailers and in which approx 60-80 calls get connected. All the members have a detailed report of their client i.e. their transaction history, sales, what brands they are purchasing, and at what time, to have a good and engaging conversation with their client.

● Financial and Administration department

Their daily touch base is around 10-12 visits in which the executive needs to capture the location and selfie along with the business Board. They also provide free samples (Example- Technosport) to the retailers to have in hand experience and also for the quality check.

Product category - Lifestyle and fashion

■ Inhouse Udaan Brand

■ It is a private label of udaan which is divided into 3 subcategories-

■ Bold and Classic - It is a very good quality product and economical.

■ Fashion By Stacktrail- It is a cheaper version of bold and classic

■ Indus- It is an active lifestyle version or a cheaper version of Puma etc

■ Strategic Brand (Pull Strategy)

Vendor Brands give orders to Udaan platform and orders get fulfilled from the warehouse sellers start their shipping process and the product is being delivered.

■ Eg - Adidas

■ Marketplace (Push Strategy)

■ All small brands are included in the marketplace. It has all sellers, from small to big.

■ It encompasses a wide range of small brands, accommodating both emerging and established sellers. This inclusive approach ensures that the marketplace caters to a diverse spectrum of businesses, accommodating those of varying sizes and stature. By including both small and big brands, the marketplace strives to offer a comprehensive selection of products, enhancing consumer choice and promoting a competitive environment within the platform.

PROJECT VISTAAR

Udaan’s next 10-12 months target is to extend its reach to 15000 plus small towns and villages i.e. towards tier 3 and tier 4 cities and to grow FMCG business. Udaan is opening a micro warehouse ranging in size from 7000 to 10000 square feet smaller than a typical Udaan warehouse which is 50,000 to 80000 square feet.

Aim-

● The company is looking to tap rural opportunities for cold beverage supplies for expansion.

● To be closer to the market

● To offer next-day delivery

“To cater to the demand from across Bharat, Udaan has enhanced its warehousing capacities with next-day delivery options. Keeping in mind the rural demand, Udaan is looking at supplying not only a variety of brands but also making available small-size packs. For example - a 200-millilitre size pack perfectly fits the purchase habits of customers from Bharat," Shrivastava said."

Udaan has partnered with reliance consumer products i.e. Campa. Through this partnership with Udaan, Reliance’s Campa will be available to over 50,000 retailers initially.

Udaan has removed entry barriers by reducing the minimum cart value from Rs 3000 to Rs 499 along with free delivery to increase its frequency as well as a number of buyers. The company has taken initiatives in terms of its supply chain, customer service, and expansion.

Conclusion

Udaan is a B2B trade platform that brings manufacturers, traders, retailers, and wholesalers onto a single platform. The platform additionally allows steady bills and offers logistics support. The agency additionally gives accounting, order control, and fee control answers to traders on their platform.