India's kirana stores turn to eb2b innovation, udaan leads market growth

India’s vast traditional retail landscape, anchored by more than 15 million kirana stores, is witnessing a significant shift. According to a recent report by Redseer Strategy Consultants, the B2B kirana market, which has traditionally relied on a fragmented trade-distribution system, is now adopting digital innovations through eB2B (ecommerce-led Business to Business) platforms. This shift is driving rapid growth and improving operational efficiency across the sector, Redseer said.

The report, titled ‘B2B e-commerce opportunity in India’, underscores how digital solutions are transforming a market long plagued by inefficiencies. Kirana stores, particularly in rural and remote areas, are increasingly leveraging eB2B platforms to streamline procurement processes, access formal credit, and enhance customer service.

 

The study also emphasises the dominant role of ‘udaan’, India’s top eB2B platform, which has emerged as the go-to choice for kirana stores in Bengaluru and Hyderabad. Udaan has outpaced its competitors, securing a large market share and continuing to expand, while other eB2B platforms have experienced a decline, the report mentioned.
 

Anil Kumar, founder and chief executive of Redseer Strategy Consultants, believes the Indian B2B kirana market is poised for a significant transformation, with digital platforms reshaping conventional trade practices.

“Our report highlights strong growth driven by digital adoption, with eB2B solutions reshaping supply chains and improving efficiencies. Kirana stores now have unprecedented access to products and financial services, marking a fundamental shift in how businesses operate and thrive in the coming years...,” he said.

Udaan leading the eB2B market

The study highlights udaan as a key player driving change in the eB2B sector, primarily through its micro-market strategy. The report reveals that udaan is revolutionising how kirana stores operate by offering digital solutions that streamline procurement, boost efficiency, and facilitate access to formal credit.

In Bengaluru and Hyderabad, udaan has captured a significant market share, serving around 80 per cent of kirana stores in Bengaluru alone, with around 15,000 stores transacting daily on the platform. Central to this expansion is udaan’s micro-market strategy, which has significantly increased buyer penetration and wallet share by 1.2 to 1.4 times in key regions like Bengaluru and Hyderabad.
 

This strategy includes a strong regional focus, customising services and product assortments to meet local demand. The approach has also led to high customer satisfaction, with the company recording impressive Net Promoter Scores (NPS) and increasing loyalty among kirana store owners, the press release said.

Vaibhav Gupta, co-founder and CEO at udaan, said, “Udaan is transforming the future of eB2B retail by empowering kiranas and small retailers with unmatched access to a wide variety of quality and affordable products, and credit while leveraging technology. Our rapid growth in Bengaluru and Hyderabad is just the beginning. We are committed to revolutionising the eB2B retail landscape across Bharat, expanding into new clusters, and driving efficient and profitable growth for millions of small businesses.”

India’s B2B market

India’s private consumption is expanding rapidly, with a compound annual growth rate (CAGR) of 10.4 per cent between FY18 and FY23. The retail market is projected to reach between Rs 116 and 125 trillion by 2028, driven by increasing incomes and evolving consumer preferences.

Growth drivers and industry shift

The rise of digital B2B platforms is fuelled by fragmented supply chains, operational efficiencies, and financial inclusion. By cutting out intermediaries, eB2B platforms provide quicker deliveries and better inventory management. They also offer improved demand forecasting and access to formal credit, helping kirana stores manage cash flow and expand operations, the Redseer report mentioned.