Is Udaan going to be the next Alibaba In India?

Udaan is a marketplace platform that helps you discover, book, rate and review local services. It is India's largest local services marketplace. But is it big enough to compete with Alibaba?

Posted by By Shoaib Ahmed on 2021-10-22

Udaan is perhaps one of India's fastest-growing startups to have gained a unicorn status (valued at $1 Billion) and also reached further than many have achieved. This startup recently raised up to $500 million from internationally renowned venture capitalists, showing how quickly this company can be valued up to $3 Billion dollars.

But does that mean Udaan can be the next Alibaba, or India’s Flipkart 2.0? Let’s find out.


What Is Udaan?

Udaan is a Business-to-Business portal that connects brands, retailers and manufacturers among other industry players together. Founded in 2016 by Sujeet Kumar, Amod Malviya and Vaibhav Gupta, its headquarters is located in Bangalore.

The main reason behind the success of Udaan was because all of its founders were from the same background and had already knowledge in this domain. The only difference between Udaan and Flipkart is that one was B2B (business to business) and another one was B2C (business to consumer).

Also after Jio was found, the founders were sure acting upon they would have lots of users so, they came in the market with features like product catalogue, reviews & specific buyer-seller interaction.

How Did Udaan Succeed?

The existence of numerous websites for business to customer (B2C) interactions has contributed enormously towards B2B markets too. But all these had one drawback - the absence of B2B portals on which companies could simply list themselves along with their needs and requirements thereby increasing their revenue through interaction with other companies.

Udaan decided to fill this gap by giving small businesses their own portal where they can openly advertise what they need and hope to get the best-suited buyer in return without any competition from other sellers which helps them increase their revenue considerably. This has been the major propellor for Udaan into the coveted unicorn sector.

Is Udaan The Next Alibaba?

Indian grocery stores are known as kiranas, and as estimated by Udaan they comprise a staggering 69% of the total food market in India. This is a gigantic market ripe for innovation, and where online grocery is growing at around 50% year-on-year. Globally, this is an industry worth €7 trillion annually from which Udaan aims to squeeze a piece of that pie with a radical transformation of traditional models.

Brick-and-mortar shops are fixtures of India. From station towns to metropolitan cities, small businesses like Kirana stores provide convenience and efficient service when it comes to buying food & groceries by providing them in an easily accessible place.

While some online retailers work hard to attract the attention of Indian consumers when they shop for food & groceries, Udaan has quietly become the largest food player in the country. While Udaan is only available in select areas right now, their goal is to cover cities across all major states in India in less than 2 years time!

Udaan Founders Source: Business Standard

Can Udaan Fly Higher?

Udaan wants to be India's most trusted platform in helping consumers get the most for their money by using their smartphone apps. Right now, they’re already helping over 3 million people shop from 25,000 retailers in 900 cities all across India. Some of its customers include HP, LG, ITC, HUL, Coca-Cola, PepsiCo, Boat Lifestyle and many more.

Technology is on Udaan’s side. E-commerce as a business has been extremely successful during arguably one of the toughest times to ever exist – a global pandemic. When that happened, the service had to adapt and continue doing well. The service itself has flourished in India – sales across food, lifestyle, and electronics have experienced an unprecedented boom in the last 12 months.

Sellers in the food, lifestyle, and electronics categories have seen soaring sales on Udaan's platform. A large number of these sellers have been from smaller cities with over 1,350 having logged sales of over Rs. 1 crore on Udaan's platform alone in India in the last year. In total, these sellers helped to move over 8,000 tonnes of goods from their storefronts in India which when totalled up is equal to being ten times larger than Wal-Mart!

So it’s pretty safe to say that Udaan is bound to grasp every single inch of the market share that it can. It’s a free-for-all battle.

Not Everything Is Great For Udaan

Not every business has found success in the way Udaan has, especially when they are in markets that are already dominated by others. But the secret to their longevity is in realizing what is holding them back so it’s possible for them to improve what they're doing that isn't working and then move on with this new plan of action.

Sometimes, simply changing your game plan is all you need to do. If another business like Jumbotail comes along and threatens Udaan's place in the market, these leaders will have to develop a strategy that involves more competitive pricing or product offerings for example.

At any rate, they'll likely come out on top simply because Udaan knows what made them successful in the first place - which means with one slight change here or there, they can let nothing stand between their continued growth.

Closing Thoughts

Even though Udaan is still a product in the making, it is not far-fetched to believe that Indian enterprises can get things right (like Alibaba!) after seeing this new company's success story. It's only been 5 years since the launch of this company and already they've expanded into nearly 1000 cities!

This really goes to show how much potential India has for this kind of business (and many like it). Then there are all kinds of B2B (business-to-business) companies to count as well including NinjaCart and Moglix, just to name a few, and there are a lot more to come. India’s startup economy is only just beginning to bloom, and we’re excited to see what’s coming in the near future.

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