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Businesses can impact society massively. But running a business is not an easy task. To run a profitable business, its supply chain and products are the essential elements.
Distribution networks play a vital role in impacting business sales. Because eventually, the products reach consumers through the distribution network.
The ultimate funda of the retailers is to seek a high standard of products to cates its customers. But a lot of retailers are facing issues to get goods at affordable prices.
The distribution network in India is complex, fragmented, and not tech-intensive. So, the product’s price varies at high margins.
Because it depends solely depends on retailers’ distribution network preferences.
Some distribution network is efficient and sells at affordable prices to its registered retailors. But many distributions network are not serving at legitimate prices. As it shows their inefficiency and brittle supply chain.
So, there is a lot of middle man intervention before reaching the products to the end-users. Ultimately, the cost price of the products surges up to the sky and retailers can’t get good margins at the sales of their products.
To, tackle this underserved and fragmented sector, the Udaan B2B e-commerce platform had raise out.
Here is a complete journey of the Udaan startup story. How did they achieve to bring positive change to the Indian distribution network?
Udaan is a B2B e-commerce platform where it unifies the entire distribution channel. Manufacturers, wholesalers, and retailers are consolidated at a single platform.
There are 30K sellers and 17 lakhs retailers on the platform. where it facilitates the entire process with ease. Now the process has become too easy and comfortable.
Because now the wholesalers and retailers can purchase their goods of higher quality at budget.
Udaan caters across 900 Indian cities covers 12,000 pin codes. This platform delivers nearly 1.75lakhs products in a day. Now the retailers are completely dependent on the platform. Moreover, it delivers 4.5 million products to its retailers in a month.
Ex-employees of Flipkart Amod Malviya, Vaibhav Gupt, and Sujeet Kumar are the founders of the Udaan. Their mission is to fix the broken distribution network. Try to bring the whole system under the influence of technology.
Udaan is the fastest unicorn titleholder in Indian startups. As it achieved the unicorn within 26 months of its launch in September 2018.
Udaan has more than 200 warehouses across India. On top of that, it has 2500 brands collaboration where the availability of the flagships products are more.
To facilitate retailers’ sales, Udaan provides financial assistance up to 2 lakhs. This initiative is driven for, to, and from the retailer’s point of view.
So, Udaan startup story is basically solving retailer problems. It is helping the shopkeepers to improve their sales and get the best products.
Udaan Startup story
Every startup has its own problem-solving niche. Even the founders are might have personally experienced the inconvenience.
Before starting the success story of Udaan. I would like to quick and short insight on traditional distribution networks.
In conventional, distribution network has three main stages. They are manufacturers, wholesalers, retailers, and end-user(customers). The ultimate goal of each stage is to sell the products and make profits.
Primarily manufacturer, produce the goods in turn wholesalers makes bulky orders. Because to get huge discounts and good margins. Finally, the wholesaler delivers the products to thousands of retailers.
But the reality is very pathetic. The process won’t happen smoothly. Instead, between wholesalers and retailers there exist money-minded middlemen. Where he charges commission from both. Eventually, the costs of the products raise and retailers have to deal with low margin profits.
Coming back to the success story of Udaan. The founders were the employees at Flipkart, the largest e-commerce platform in India. The founders were working in high-profile positions.
- Vaibhav Gupta- Head of Finance and Analytics
- Amod Malviya – CTO(Chief technology officer) of Flipkart
- Sujeet Kumar – Pillar of Operations and Logistics
So, the trio was had immense knowledge of the distribution network. Then they got to know the inferior and brick and motor methods of distribution channels.
Foundation Udaan startup story
Amod, Vaibhav, and Sujeet had known each other for a long time. Even they had good bonding and were desperate about starting up their startup.
Their mission ultimate vision was to impact a huge audience and bring positive change. Finally, they have to create a technology-based platform.
The founders understood the exploitation made by the middlemen and the inefficient logistics system. Since they were proficient and pioneers in the distribution network. Their experience was key for setting new company.
In 2016, Amod Malviya, Vaibhav Gupta, and Sujeet Kumar founded Udaan. The trio went on to work intensely to develop a B2B platform.
Now anyone can join Udaan with three easy steps. Firstly, the user has to create an account and then complete the KYC of the shop. Finally, the user can start trading from the Udaan app.
Udaan has a wide range of products up to 5 lakhs. This includes Electrical, footwear, Medicines, Luggage&Bagge, Clothing&Accessories, Electronics and applications, Home&Kitchen and many more.
The platform spent nearly 4000 crores to strengthen the distribution network. Udaan platform leverage on Supply chain, Categories, Credit, and other compliances. They desire to build rigid and flawless B2B e-commerce.
Ultimately, Udaan startup story success is entirely dedicated to its founders.
Udaan startup growth in Covid
When covid-19 struck the country everyone confines themselves within their home. All Trade and transportation halted. But as the situation progresses even trading also opens up.
Due inculcation of the technology in trade sector considers as a boon. Now all the Udaan members can orders goods online. Even logistics also an improvised lot and quick deliveries were a common event.
In the 2nd wave of Covid, demand for virus protective products was at a peak. Udaan manages to sell 15 million masks, face shields, and PPE suits together.
Online orders were exponentially increasing day by day. Nearly, Udaan made it possible to deliver 23,000 bulk orders.
Even orders were coming from all the corners of the countries. Since Udaan brought whole traders into their platform. So, it manages to deliver the products covering over 5000 pin codes.
It has become hassle-free for retailers to order from the Udaan app. Half of the orders came from Assam, West Bengal, Andhra Pradesh, and Bihar. This move signifies the technology adoption rate.
Udaan Business model
Udaan’s business model has made a significant transformation in the distribution ecosystem. The platform focuses on the technology combined with the existing distribution network.
Now, the retailers are free to purchase the products from any part of the state. Earlier they to rely on the respective area-wise dealers. But now Udaan brought entire traders producers, wholesalers, and retailers into a single platform.
Udaan forms a bridge between all the categories of the traders. This platform gets the revenue out of the sales in a commission form. They charge a certain percentage of commission based on the category and quantity of the sales of the product.
Even the platform posses its logistics service. Where the products reach the trader in no time. There will be no more delay in the process. Udaan charges a fee for this service.
To, facilitate the small and medium business Udaan provides credits. Udaan founders were aware the credibility plays a vital role in the trading system. Other sources of income come from the interests they chare the credit amount.
These were the three aspects where Udaan’s business model relies on. Here Udaan startup story incorporates the best business model to empower retailers.
B2B platforms are booming in India. India is the largest market for domestic sales. Udaan in mission to develop technology incorporation B2B platform.
Investors are more confident investing in the B2B platform.
In January 2021, Udaan was able to raise 280 million (2048 crores). The major investors were Lightspeed Venture Partner, DST Global, GGV Capital, Altimeter Capital, and Moonstone.
From this funding, Udaan’s valuation went up to $ 3 billion. The platform utilizes the fundings to expand their categories and developing of technology. Further, they want to reach more small and medium businesses and help them to provide credit and a strong supply chain.
Following will be the earlier funding of Udaan
|Series A||$10 million|
|Series B||$ 50 million|
|Series C||$225 million|
|Series D||$585 million|
In total, Udaan was able to raise $1.2 billion from 13 investors.
Udaan startup Competitors
In India, there are about 63 million small and medium-sized enterprises. Even b2b market size will grow up to $99 billion by 2024.
Since it is a huge market of startups are emerges out to grab the opportunity. Here are some of the competitors of Udaan
Udaan made a huge impact on the trading ecosystem. So no one will face the heat of commission anymore. The purchasing limit is no more relies on an area or respective state. Technology made the lives of many small and medium enterprises profitable.
Even manufacturers and wholesalers have the equal opportunity to reach out to a vast community.