How B2B e-commerce established itself In Indian Market

B2B commerce is the buying and selling of products between two business parties. It has been constant and basic in Business Studies. However, many people are not aware of the fact that B2B e-commerce is growing rapidly in the last few years.

Take a look at the case study of how the B2B marketplace got everyone's attention and many entrepreneurs got success in India. In India, Indiamart is one of the oldest internet firms that established itself as a B2B marketplace. Well, the company incorporated in 1999 as an export marketplace that shifted its focus to domestic trade by the end of 2008.

The true success of the B2B marketplace happened in 2016 when 3 large changes occurred in India due to which many other B2B marketplaces came forward and become unicorn startups within years.

These three changes were:

1) Launch of 4G services by Reliance Jio

2) Introduction of Goods and Service Tax (GST)

3) Demonetization.

Economists and analysts have stated that the introduction of GST and demonetization damaged the informal economy and the reason for the economic slowdown. However, one sector got huge benefits from these changes which is B2B e-commerce.


Before 2016, many B2B e-commerce startups failed to make their way in the unorganized market. Experts pointed out that GST and demonetization forced small and medium enterprises to go digital with their business. Indian internet companies are also making their contribution to organizing this massive market. Apart from big companies like Indiamart and Udaan, many B2B marketplaces made their presence such as ShopX, Ninjacart, and which have raised huge capital in the last couple of years.

For instance, the government also launched a new platform Government e-Marketplace which has processed transactions of about 32,000 crore rupees as per the news of The Economic Times.

This B2B marketplace facilitates the buying and selling of fashion, groceries, and electronics between brands, manufacturers, and retailers. The B2B e-commerce revived due to the structural changes in the industry by macro factors. GST made it convenient to move goods between Indian states and demonetization forced businesses to experiment with digital payments. At the same time, 4G mobile gave fast and stable internet connection that appeals to people to dive into the business industry.

Sujeet Kumar of Udaan states, "In any internet business, timing is key, and in our case, and for B2B e-commerce in general, all these factors were crucial enablers."

Path to profits

B2B Marketplace is a blessing in disguise for Indian manufacturers as they get dozens of buyers across the world for their product listings.

It is also beneficial for retailers as these B2B marketplaces provide credit, price discovery, transparency, and logistics with other value-added services. Retailers have the opportunity to earn more revenues and expand into many other categories by increasing their profit margins.

The online B2B market earns revenues in 4 broad ways:

1) By trade commission (buying and selling)

2) charging for logistics services

3) providing credit and finance

4) providing value-added services that include analytics and advertising.