India’s B2B kirana market undergoing digital transformation

India’s B2B Kirana market is poised for a major transformation as digital platforms redefine traditional trade practices. Kirana stores in rural and remote areas are increasingly adopting eB2B platforms to enhance procurement management, access formal credit, and improve customer service. Udaan, India’s top eB2B platform, has firmly established itself as the preferred partner for kirana stores in Bengaluru and Hyderabad.

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India’s traditional retail market, led by over 15 million kirana stores, is undergoing a major transformation through the adoption of eB2B (ecommerce-led Business to Business) platforms. 

A report by Redseer Strategy Consultants, titled B2B e-commerce Opportunity in India, reveals that digital innovation is reshaping this market, long reliant on fragmented, traditional distribution systems. Kirana stores, especially in rural and remote areas, are increasingly turning to eB2B platforms to improve procurement, access formal credit, and enhance customer service.

Udaan, India’s leading eB2B platform, has emerged as the top choice for kirana stores in cities like Bengaluru and Hyderabad, significantly outperforming competitors. The platform has captured a substantial share of the market by streamlining operations and providing efficient services, while other eB2B players have seen a decline. Udaan’s success underscores the growing demand for digital solutions to address challenges faced by traditional retailers.

India’s consumption-driven economy is expected to grow rapidly, with private consumption experiencing a compound annual growth rate (CAGR) of 10.4% from FY18 to FY23. By 2028, the retail market is projected to reach Rs 116-125 trillion (US$ 1450-1550 billion), fueled by rising incomes and changing consumer preferences. 

Despite this growth, traditional retail faces significant challenges, including fragmented supply chains, inconsistent service quality, and limited financing options, driving kirana stores toward digital solutions like eB2B platforms.

Several factors are accelerating this shift including: eB2B platforms eliminate intermediaries, enabling faster, more reliable delivery and better inventory management. They also offer operational efficiencies like improved demand forecasting and vertical integration, helping kirana stores enhance profitability. Additionally, eB2B platforms provide formal financing options, giving stores access to credit, which allows them to expand product offerings and improve cash flow management.

The future of eB2B platforms is promising, with companies like udaan expected to expand further across more regions, broaden their product categories, and implement private label strategies. While traditional retail still dominates, the growing adoption of digital B2B platforms is set to capture an increasing share of India’s retail market in the coming years.