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Udaan.com Case study Model Analysis

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DOI: 10.13140/RG.2.2.28289.07523/1

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Udaan.com Case study Model Analysis

by
N JACINTHA

Marketing
COMPANY PROFILE
Udaan is a Business-to-Business (B2B) ecommerce platform, designed to solve core trade problems
for small, medium and large businesses across India. It is the largest such national distribution
platform of its kind enabling retailers and businesses to source merchandise from manufacturers,
brands, white labels, importers etc. on a single platform. Udaan brings to users the power of
technology to grow their business.

Udaan provides access to new markets with a fast, low-cost, low-wastage, highly-reliable shipping &
delivery system across India for its buyers and sellers. Udaan Capital, the NBFC arm focused on SME
financing service, provides financial products for sellers and buyers to grow their business.

Businesses can reach out to buyers and sellers across the country. The Udaan marketplace facilitates
efficient and convenient transactions by offering low and best price, good quality and best selection to
its retailers.

Udaan enables direct connect between buyers & sellers which allows one-on-one discussions to
negotiate terms of trade between transacting parties. The chat feature allows you to have a personal
and secure conversation in real time, in a language of your choice. The entire experience is seamless.

1. ABOUT CASE STUDY

The case talks about how Udaan which is a start-up and has become the fastest unicorn and it took
them just 26 months to do the same compared to many other companies such as swiggy. Basically, the
case talks about how wholesalers and manufacturers can sell their products to the retailers which
started in 2016 by 3 ex-employees of flipkart who were Sujeeth kumar, Amod malviya and n Vaibhav
gupta. All 3 of them came up with a 3 criteria policy to start udaan which was impact on large number
of people, disruption by tech and unique indian flavour. After the company was launched, they had
good amount of investment and then they released the app beta version where they majorly did
logistics work for 8 to 10 months after which they launched the main version in 2017.

They majorly became the unicorn startup for 5 reasons which are healing the pain points,
benefits to the eco system, creating and helping entrepreneurs, solving credit issues and rapid
expansion. Another benefit with them is that they cover almost more than 1000 cities in india unlike
flipkart who only cover 500 and miss out on many cities which have been covered by udaan.
According to them customers shop for 7 times a month rather than just once and they have also had
talks started sourcing with chinese manufacturers. Coming to their income they are worth 16.9 million
and not only earn through commission but also by charging sellers and buyers for trading and also by
giving retailers credit. They also fund working capital for its buyers and charge around 10 15 %
interest on it and also these retailers can pay the credit in the form of monthly EMIS. Thus is all that is
we have to know from the information received and on what exactly Udaan performs.
2. BUSINESS MODEL:
 i. Udaan is a Business to business marketplace on which manufacturers and wholesalers can
sell their products to retailers through platforms like online or mobile app.
The company provides logistics, secure payments, and technical support also.
ii. They do not own many assets
iii. Udaan helps like a bridge between business and customers and help businesses find
customers, suppliers, and products across categories and connect them to get the best deal.
iv. The company also offers accounting, order management and payment management
solutions to merchants on their platform.
v. So, apart from being a platform for retailers and wholesalers, it has also
started underwriting loans for these small businesses at 10-15% interest rates
vi. It has also received a non-banking financial company (NBFC) license to provide finances
to SMEs.
3. PROBLEMS FOUND IN THE COMPANY
• UDAAN had become a unicorn in just 26 months unlike other startups which took almost 4-5
years is because the biggest problem of distribution and supply chain was addressed by UDAAN
as it understood the gap that existed between the retailer, manufacturer and the wholesalers.
• UDAAN looked into the problem of retailers i.e to save their time as well as cost and likewise
UDAAN has also understood the problem of the manufacturers and wholesalers where they can
only sell the products only to the people they know but UDAAN had provided a solution for all
their problem by making use of the technology and gave them a platform where all of them can
directly be connected with each other and can comfortably do their trading activities without
worrying about the logistics, payments and handling other expenses since that was handled by
UDAAN itself.
• Another problem that was there is that, the farmers had to sell the products to the fruit sellers and
had to undergo a lot of steps before he actually sells his products to the end consumers but through
the UDAAN application, farmers can directly sell their products to retailers and to the end
consumers and skip themselves from involving with the sellers in a local market.
• UDAAN also looked into the problem of opening a new businesses and it helped in motivating the
budding entrepreneurs who could not find any other way to start their business since they were
unaware of the prices etc but through UDAAN, they can find the best prices with the most trusted
brands.
• Also focusing on finding big markets in India where mobile and Internet can create a huge
disruption or a huge change, UDAAN changed the way of doing things.
• One of the big problems within the trade is that the credit, therefore UDAAN understood that
problem and gave credit to the retailers where retailers can borrow money in between 10k-1lacs to
buy the products.
• UDAAN also found that there was a problem of having delivery to many regions of India, so it
gave an option to deliver the products to more than 1000 places.
• One of the big things for India, as we know that with the fragmented channel and unorganized
channel, payment reliability, like on-time in-full payments to seller is one of the biggest problems
in the country so UDAAN gives the credit and the retailers and they can pay the money within
30days and also through installments.
4. LEARNING FROM THE CASE STUDY:

UDAAN is a B2B trading platform on which wholesaler, manufacturer sell their products to the
retailers. So learning from the case study is that any business who wants to excel needs to focus on
these points

• Impact on large number of people

• Disruption by technology
• Unique Indian flavour

Organization should come up such kind of innovation that has a huge impact on the consumers. The
product or the services is of great importance to the consumers. Just like Udaan identified that after
agriculture it was the SME which was growing rapidly and generating revenue more than 700-800 B$,
which was greater than Pakistan’s GDP. Then they observed that there was no technological boom in
SME’s and found that there was huge B2B opportunity and growth.

Name and the Look of ther firms are often completed but the UDAAN name and its user interface was
very much customer friendly.

Any Firm who wants to grow at a rapid rate should abide by these 3 points.

In order for rapid growth of the Organization. They should also keep a check on their logistic which
assures successful delivery of goods and services to the customers.

Their focus should also there on

• Healing the pain points

• Benefits to the ecosystem
• Creating and helping entrepreneurs
• Solving the credit issues
• Rapid Expansion

UDAAN understood the pain points of the retailers and wholesalers, retailers in order to purchase has
to spend a lot of time and money to reach to the wholesaler at the same time goods were sold from
those customers who knew them. UDAAN identified the problem and then with the help of internet
helped to connect the wholesaler and the retailers, and took care of the logistic and the money
transfers.
UDAAN provided benefits to the entire ecosystem from the wholesaler to the retailer ann at the same
time they also helped the farmers by starting local to local services in Delhi and Bangalore, where they
sell direct to the consumers and retailers

UDAAN provided credit opportunities to the retailers so that they can purchase easily from the
wholesalers.

They also had an excellent business model, because of which large number of retailer, wholesalers
manufactured got associated with them. It delivers to almost all the places in India, which is still not
not by Flipkart.

So , any firm who want to grow at a rapid rate just like UDAAN, need to adapt these steps.

5. SOLUTION TO THE PROBLEM

Udaan is a Business to business marketplace on which manufacturers and wholesalers can sell their
products to retailers via an online platform or mobile app. And, the company provides logistics, secure
payments, and technical support also. They are the asset-light player based on their Business Model.
They do not believe in owning assets and also are not planning to go asset-heavy as of now. Udaan
assists organizations with finding clients, providers, and items across classes and associate them to get
the best arrangement. The stage additionally encourages secure instalments and gives coordination’s
support. The organization likewise offers bookkeeping, request the executives and instalment the
executives answers for traders on their foundation.

The Promoters of the organization found that financing working capital has been a significant cerebral
pain for end retailers. The retailers wind up acquiring from neighbourhood banks who charge
excessively. Udaan plans to give working capital(funds) to them at a sensible rate. In this way, aside
from being a stage for retailers and wholesalers, it has additionally begun guaranteeing credits for
these private companies. It has additionally gotten a non-banking money related organization (NBFC)
permit to give accounts to SMEs.

Udaan has been the mix of a market place, logistics, and lending. To comprehend the interest and
gracefully perspectives over the various classes, the originators of Udaan Focused uniquely on the
logistics part for around 8-10 months. It helped them to set up a relationship with the purchasing and
selling network. Presently, Udaan has been the blend of a market place, logistics, and lending. Udaan
charges a rate on deals as a commission which changes in various classes. Udaan likewise charges for
the logistics as conveyance charges from the purchaser which additionally differs as indicated by the
item and amount. They give credit cut off to the main checked purchaser that as well if is qualified for
 the breaking point. From the start, they will give Rs. 10000/ - credit with no intrigue charges then as
far as possible will be expanded to a limit of Rs. 250000/ - . Right now, Udaan doesn't expect to bring
in cash through giving assets to working capital for its purchasers so they don't charge any interest on
the credit.

6. CONCLUSION

➢ Udaan was founded by 3 ex-employees of Flipkart

➢ The company was successful because they allowed the engineers to involve and develop in their
creativity.
➢ Udaan has the strong founders' team. They were best in their work at Flipkart which was handy
here.
➢ They already had a clear plan on the execution, the only thing to do was the workflow execution in
smaller towns where they faced small issues
➢ When the founders were working at flipkart they saw that flipkart delivered to only 500 cities and
one of the founders saw that his own village wasn’t on the list so the main aim was to provide
delivery to more places and also towns.
➢ Eventually Udaan delivers to more than 1000 places which includes smaller towns which also
helped in covering more market in turn they gained more revenue
➢ Small and medium-sized sellers could use the platform to build their own brands, which is difficult
on consumer-based portals such as Amazon and Flipkart.
➢ Udaan not only acts as a market place for the sellers and buyers but also takes care of the logistics
and payments.

Not only those but Udaan also solves issues of the small retailer who belongs to a small town usually
who belongs to middle class.
The value propositions of Udaan are- taking care of the logistics, payment between the supplier and
the retailer and also customer. It also gives credit to the suppliers/retailers ranging from 10000 INR to
200000 INR.
Udaan’s revenue works on the 15% — 18% commission that it charges from the buyers for funding
their purchase (interest rate they impose on the buyers is 15-18%) from where it generates huge
revenues

Due to all the factors like concentrating on wider and larger market, logistics and
distribution, value proposition, solving middle class retailers’ issues, generating revenue by imposing
good interests rates on buyers and having the best experienced and know ledged founders made Udaan
what it is today

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