Udaan forms strategy to strengthen its staples business across Bharat

Following high growth, B2B e-commerce platform plans to double miller count in the next 12-15 months

India’s largest business-to-business (B2B) e-commerce platform Udaan has formed a strategy to strengthen its leadership in the grocery business across tier-II and III cities and towns.

As a part of this, the Bengaluru-based firm is planning to double the number of millers that supply staples like pulses, grains, wheat, rice and oil, on the platform in the next 12-15 months. This would be on the back of quarter-on-quarter growth of over 45 per cent in the staples business. The total staples shipped by the platform in the January-March quarter were more than 1.95 lakh tonnes.

Udaan aims to onboard about 100 miller partners per quarter. Currently, it works with over 500 miller partners supplying over 10,000 SKUs (stock-keeping units) to retailers and kirana owners.

“Udaan is fast emerging as an enabler and a partner of choice for millers to grow their business,” said Arvind Chari, business head, staples category, Udaan. “Over the next 12 months, our aim is to significantly improve our miller partnerships and focus on driving scale and growth for our strategic partners.”

In a country like India, where the trade ecosystem is highly fragmented, Udaan is addressing the challenges of patchy demand by consolidating orders from retailers. It is providing better visibility in terms of demand and helping millers with inventory management.

Udaan said the partnership reduces lead time and provides an unmatched assortment to retailers, kiranas and millers. This also improves margins with data analytics, aggregates demand, and provides supply-chain and logistics support to them, it added.

Retailers can benefit from transparent pricing and a wide variety of products available to them that are directly sourced from local millers at reasonable prices. The farmers benefit from committed procurement, a large volume of orders, and better pricing for their produce, Udaan said.

“Millers also enjoy the benefits of brand building, assured product procurement and timely payments,” said Chari. “Increasingly, mill owners want to understand the e-commerce aspect of the business and invest in brand-building with us. They see this as a cost-effective way of reaching lakhs of retailers.”

Sachin Karma, director, Samradh Agro Food Industries, said that prior to engaging with Udaan, he was restricted to selling his produce at the local market. Also, there was no guarantee of timely payment or sales, resulting in wastage.

“B2B e-commerce has opened up opportunities for us. Today, I get better pricing for my products and also access to customers from across India,” said Karma. “I am no longer dependent on local buyers. I have been able to scale my business organisation to the medium category from micro and small in just a couple of years.”

Another miller Pramod Kumar S, chief executive officer and whole-time director, Sunil Agro Foods Limited, has been running the wheat milling business for around 40 years. He wanted to expand beyond the trading business and create a brand of his own. But it was a huge challenge. It was also difficult to gain access to new markets in a short time.

“Due to their (Udaan) extensive supply-chain and retailer network we were able to launch our brand in South India, mainly in Bengaluru urban and rural within 4-6 months,” said Kumar. “Today our brand is doing Rs 176 crore business.”

Suraj Agarwal, CEO, Rice Villa Group, said through Udaan, the enterprise had been able to expand its business to every corner of the country without having to invest heavily in time, money, management and infrastructure. “In a short period of time, Udaan has allowed us to launch our brand and make our products available in new states,” said Agarwal. “Our online B2B sales have grown by over 100 per cent in the past year.”

Udaan recently launched its rural initiative, “Project Vistaar”. It is aimed at expanding and growing the fast-moving consumer goods and food business by tapping into the opportunity offered by Bharat. The project is being implemented in rural Uttar Pradesh and has reached over 15,000 retailers across 10 districts. The company aims to expand its reach to over 10,000 towns and villages in the next 10-12 months.