Topics In Demand
Notification
New

No notification found.

The Dark Horses of the Start-up Era (A Series): 4 - B2B Marketplace
The Dark Horses of the Start-up Era (A Series): 4 - B2B Marketplace

June 9, 2021

6247

1

The Dark Horses of the Start-up Era: A Series

4. B2B Commerce / Marketplace

By the time this article hits social media, India might have got its 15th unicorn of the year in the form of “Ofbusiness”. Ofbusiness is a B2B marketplace providing raw material and working capital finance to small and medium enterprises (SMEs) in the manufacturing and infrastructure space.

Though this B2B marketplace sector is with us for the past many years in the form of biggies like Indiamart and other players like Ninjacart, Jumbotail, Industry buying, Karkhana, etc. But a more organized and technological approach came after Udaan and other start-ups.

Surprisingly after Udaan, there was a dearth of scaled upB2B commerce firm and many of us have thought that this sector will continue to work in an unorganized model. But behind the scene, this sector was building a mammoth ecosystem. Ofbusiness is the 4th unicorn in the B2B marketplace business after Udaan, Moglix, and Infra.market. Out of these 4, 3 turned unicorns this year.   

 

B2B Marketplace

Now before talking about the market opportunity and size which anyways is huge, the most important and interesting factor about this sector is the “Profitability”.  Profitability means whether the companies working in this business are making any kind of profit or not. Let’s find it below:

  • OfBusiness: 6-year-old firm is profitable for the past 3+ years
  • Infra.market: 5-year-old firm is profitable since its inception

Old is Gold in this sector:

  • Indiamart: Profit of INR 233 cr in FY21, 10X increase in share price in past 2 years

Well, the numbers above are not very common, especially if we talk about unicorns. 50% unicorns profitable in a sector is not bad considering the performance of other unicorns in this sector. So, it’s easy to say that this sector offers a big room for profitability. Even government is not behind in this sector and launched an e-marketplace in 2016.

Now if we talk about the market size, as per research B2B e-commerce market stands at $1.7 billion and expected to grow at a CAGR of 80% to reach $60 bn by 2025. As per another research, this CAGR is around 20%. Frankly, it’s not that straightforward to predict the market size because of overlapping in the company’s business portfolio and of course, being a too fragmented market but definitely potential is gigantic. Driven by cheap mobile data and simplified GST norms, this sector is expected to get a major boost from Indian SMEs. SMEs not only in metro cities but in Tier 1, II, and III cities. Being a highly fragmented market, investors also see a huge potential in B2B commerce and have already invested over $2 billion till date in this sector.

So, from consumer durable to industrial raw materials, agriculture product to lifestyle products, there would be hardly any area where B2B e-commerce can’t help and hence a huge potential.  “B2B e-commerce” is equal to “Business Procurement Simplified”. A sector which you just can’t ignore. 

 

For other blogs in this series, click on the link below:

#1 Social Commerce: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-1-social-commerce

#2 Spacetech: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-2-spacetech

#3 PropTech: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-3-proptech

 


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


© Copyright nasscom. All Rights Reserved.