Online wholesale suppliers have come up to cater to firms selling grocery to stationery and unbranded products, addressing increasing demand from small traders to institutional players who seek procurement efficiency and convenience, cost saving and financial hygiene.
In return, these business-to-business wholesalers, such as WholesaleBox, GrocNation and Zoffio, get assured revenue. Customer acquisition cost is low for them and customer loyalty high, which might not be the case with business-to-consumer players.
GrocNation, an Ahmedabad-based start-up that was launched six months ago, dropped its online B2C grocery delivery service as soon as it sensed better opportunity in B2B.
“In B2B grocery business, one can lock-in the customer through exclusive contract, which is never possible in B2C, “said Cofounder Vivek Singh
“With several B2C players, the customer acquisition cost is high owing to several marketing promotions, discounts and offers being made. Further, the customer loyalty is also low.“ Also, the average order size of a retail customer is low, which puts further pressure on margins in the B2C business, he said.
GrocNation caters to institutional customers in Ahmedabad and plans to expand to three more cities in the next 12 months. Its monthly revenue is more than `. 6 lakh from just five customers.
Jaipur-based startup Wholesalebox.in, established in September, caters primarily to traders who buy unbranded goods and where there is an immediate need for an efficient procurement and distribution model.
“Small traders nowadays have a leaning towards convenience and cost saving,“ said cofounder Chandan Agrawal. Usually , a trader travels to various markets to source unbranded products, negotiate price on his own, involves multiple middlemen that increases his procurement cost 20-30% and takes all the trouble to transport the product, he said. “We get them their local unbranded product at their doorstep, with easy return policy and bring cost down by at least 20-30%.“
Wholesalebox sources unbranded apparel from Jaipur, which is a major manufacturing hub for cotton-based products like kurtis, dupattas and skirts.
WholesaleBox has roped in more than 600 women’s apparel stores across India as it is focusing on apparels.
“Bulk ecommerce players are providing a certain level of financial hygiene in the entire process of business transaction for the corporates, SMEs (small and medium enterprises) and traders,“ said Abhishek Kamani, founder and CEO of Zoffio. He said offline and B2C e-commerce players are not tuned to the needs of the business establishment that requires specific supply patterns and financial transparency.
The Bengaluru-based start-up provides office stationery to companies and SMEs.
Source: The Economic Times