Unlocking Potential of B2B E-Commerce in India!

In the last decade, India has witnessed an astonishing transformation in consumer digitization. What began with less than a million users engaging in online transactions in 2010 has burgeoned into over 100 million by 2022. This phenomenal growth can be attributed to the emergence of diverse B2C marketplaces in the country, including Flipkart, Zomato, Swiggy, Ola, Big Basket, Pharmeasy, Urban Company, Livspace, and Myntra. These platforms capitalized on macro-enablers such as reduced data costs, widespread smartphone adoption, and the utilization of open APIs through the India Stack initiative.

However, the shift to online transactions is only the beginning. With India’s economy set to grow from $3.75 trillion to $6 trillion in the next decade, a significant part of this growth will be fuelled by the digital economy. According to estimates, this digital economy, currently valued at around $100 billion, will expand to an astounding $1 trillion. While consumer digitization played a pivotal role in the initial $100 billion, experts foresee substantial future growth originating from business digitization and online transactions, which are broadly categorized as business-to-business (B2B) online marketplaces.

B2B marketplaces in India are on the cusp of remarkable growth, owing to the country’s predominantly unorganized B2B economy and fragmented supply chain. In 2022, B2B e-commerce accounted for just 1% of the overall B2B market in India, a stark contrast to its near-absence in 2019. Nevertheless, forecasts indicate a substantial upswing, with the expectation that its share will surge to nearly 5% of the overall market by 2030.

Fast forward to 2030, and analysts anticipate that online-first, tech-enabled B2B marketplaces will represent a remarkable $200 billion market opportunity. It’s essential to note that even with this substantial growth, the gross merchandise value (GMV) of online B2B transactions will still make up only about 5% of the overall B2B business in India, significantly lower than the penetration in other countries.

Money9 spoke to Kishore Yedam, CEO of Federal Soft Systems, on the growth and potential of B2B e-commerce in India. Yedam emphsized the the role of technology adoption in the success of B2B marketplaces, underscoring the interconnectedness of consumer internet adoption with business digitization. Yedam provided valuable insights into the offerings of Rolloverstock, an innovative player in the B2B e-commerce space.

Rolloverstock: Bridging the B2B E-commerce Gap

Rolloverstock is a trusted online B2B eCommerce marketplace that acts as a bridge between manufacturers, master distributors, wholesalers, and retailers. As Yedam points out, “Our platform facilitates bulk purchases across a wide range of product categories, offering wholesale prices. What sets us apart is our unique feature that allows buyers to place orders for more than  ‘1000’ products at a time, simplifying the B2B buying process, especially for retailers in Tier 2 and Tier 3 cities.”

While some customers may draw comparisons with platforms like IndiaMart, Rolloverstock distinguishes itself as a B2B Marketplace Infrastructure platform. It offers technology platforms and tools in payments, logistics, warehousing, and more, whereas IndiaMart primarily serves as a listing platform without actively participating in sales or conversions.

B2B supply chain dynamics are far from uniform across verticals, with variations in buyer and supplier personas, working capital requirements, logistics, payments, and underwriting. This is precisely where the strength of vertical marketplaces like Rolloverstock shines, as Yedam highlighted.

Recognizing that India still predominantly relies on offline stores for B2B transactions, Rolloverstock has ventured into the brick-and-mortar space. These stores operate similarly to the online platform, catering to users who prefer in-person interactions. The company currently has around 20 stores in South India and has ambitious plans to expand to 20 stores in each state by 2025. These stores are operated by Rolloverstock franchises, creating exciting business opportunities in the B2B space.

Driving Forces Behind B2B Marketplace Growth

The remarkable growth of B2B marketplaces in India can be attributed to four key driving forces: increased digital adoption, mature digital infrastructure, favorable regulatory policies, and a conducive cross-border environment.

Business digitization has been a significant driving force behind the growth of B2B marketplaces in India. Tech adoption in the country has its roots in consumer internet adoption. With over 750 million people in India now online, micro, small, and medium enterprises (MSMEs) have reaped the benefits of discovery, price competitiveness, convenience, and a wide range of choices. India boasts over 60 million MSMEs, and as of 2022, 10% of these businesses engage in online buying and selling, a number set to rise to 25% in the next four years.

The future holds incredible potential for B2B e-commerce in India as the digital economy continues to evolve and expand, fostering growth, innovation, and opportunities across various sectors.

The growth of B2B e-commerce in India is not only an exciting economic development but also a testament to the nation’s digital transformation. As more businesses and consumers embrace online transactions, the potential for growth and innovation in the B2B marketplace is vast. With the right infrastructure and technology, B2B e-commerce will continue to shape the Indian business landscape in the coming years.