India’s traditional retail market, dominated by over 15 million kirana stores, is undergoing a significant transformation. A new study by Redseer Strategy Consultants reveals that the B2B kirana market, which has long relied on fragmented, traditional trade-distribution models, is embracing digital innovation through eB2B (ecommerce-led Business to Business) platforms, fueling rapid growth and operational efficiency in the sector.
The report, titled ‘B2B e-commerce Opportunity in India’, outlines how the rise of digital solutions is reshaping the market, which has historically faced challenges. Kirana stores, especially in remote and rural regions, are increasingly turning to eB2B platforms for better procurement management, access to formal credit, and superior customer service.
India’s B2B Market
India’s Consumption-Driven Economy: India’s private consumption is growing rapidly, with a compound annual growth rate (CAGR) of 10.4% from FY18 to FY23. The retail market is expected to reach INR 116-125 trillion (USD 1450-1550 billion) by 2028, driven by rising incomes and shifting consumer preferences.
Challenges for Traditional Retail: Traditional retail continues to face challenges such as fragmented supply chains, inconsistent service quality, and limited financing options. These inefficiencies have driven retailers toward eB2B platforms like udaan, which provide digital solutions to streamline operations.
Growth Drivers and Industry Shift
The shift toward digital B2B platforms is being driven by several key factors:
Fragmented Supply Chains: Traditional B2B channels involve numerous intermediaries, leading to delays and increased costs for retailers. By eliminating these intermediaries, eB2B platforms offer faster, more reliable delivery and inventory management.
Operational Efficiencies: Through improved demand forecasting, streamlined warehousing operations, and vertical integration with suppliers, eB2B platforms enable kiranas to better manage inventory and improve profitability.
Financial Inclusion: Many kirana stores, which previously relied on informal credit arrangements, now have access to formal financing options through eB2B platforms. This access to credit allows retailers to expand their product range and improve cash flow management.
A Promising Future for eB2B
The future outlook for the eB2B industry remains promising, with platforms like udaan expected to replicate their success across more regions. The continued expansion of product categories, the adoption of private label strategies, and increased penetration in existing cities are projected to propel the industry forward. While traditional retail channels still dominate India’s essentials market, the rapid growth of digital B2B solutions is likely to capture a larger share in the coming years.
