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Reading: B2B E-commerce Struggles Signal Challenges Ahead
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e-CommerceStartups

B2B E-commerce Struggles Signal Challenges Ahead

Osama Khalid
Last updated: February 12, 2024 1:44 pm
Osama Khalid
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1 Min Read
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  • Udaan and Ula thrived early in the pandemic but are now struggling as retailers revert to old buying habits.
  • Low margins on staples and major brands’ distribution preferences make profits difficult without massive capital investment.
  • Niche categories and business models may lead to success in India and Indonesia.

Contents
Impact of the PandemicStrategies for Survival

Recent layoffs and business model shifts by high-profile B2B e-commerce firms Udaan and Ula highlight tough realities facing the once high-flying sector.

Impact of the Pandemic

Both companies thrived early in the pandemic as traditional chains faltered. But post-COVID, end retailers reverted to old buying habits once discounts and lockdowns ended.

Low margins on staple products make achieving scale difficult without massive capital investment. Major consumer brands also prefer existing distribution networks, forcing B2B players to use intermediaries.

Strategies for Survival

As profits suffer, Udaan and Ula have restructured and pivoted their strategies. But their high valuations allow little room for error in finding new high-margin, capital-efficient offerings.

India and Indonesia represent attractive long-term B2B e-commerce opportunities. Success may depend on niche categories and business models.

TAGGED:div5

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