Udaan News: Udaan expects strong sales in the cold beverage segment

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udaan, the business-to-business (b2b) e-commerce platform focused on Kiranas, has partnered with over a dozen fruit juice and cold beverage brands. The company is targeting double digit revenue growth due to increased demand from Tier 2.3 cities across Bharat during this summer season. This will be a second year of double-digit growth in the juices and beverages segment, primarily due to the company’s large and growing retail base across the country.

In order to achieve growth, the company is stocking up and is partnering with beverage manufacturers such as Paper Boat, Rasna,

Redbull, Coca Cola etc. and aims to supply Lakhs Kirana retailers this season through its extensive distribution reach covering over 1200 cities and 12,500 PIN codes.

In a statement, Vinay Shrivastava, Head of FMCG Business Udaan, said: “Demand for juices and beverages in rural India has outstripped urban demand. With our solid distribution network across Bharat, udaan is well positioned to provide brands with the necessary distribution reach and retailers with product availability and variety. With our multi-brand partnership and expansion into new cities and communities, we’re confident of continued double-digit growth in the juice and cold beverages space. As we expand the category on our platform, we plan to add more brands and give them access to the national market. Our kirana partners benefit from transparent and fair prices, secure delivery and a large selection of brands on a single platform.

In 2021, Udaan saw a huge increase in business across all Essentials categories with over 500,000 new retailers and a repeat purchase rate of over 94 percent. The company reported that demand for FMCG products increased by 77 percent and saw the highest demand for these products from Delhi, Karnataka, Maharashtra, Telangana and Rajasthan.

To continue growing its market, udaan is reaching the mass market with three key initiatives including credit, logistics and community buying. udaan Express is a leading provider of end-to-end logistics solutions, serving customers across the country. With over 70 warehouses (with a range of 200-250 km) and 500 last mile fulfillment centers, udaan’s deliveries reach all over India. The company also handles the working capital needs of trading under udaan Capital. Over 100,000 companies have benefited from the initiative.

Among the categories in which it is represented, groceries make up two-thirds, lifestyle 10 percent, electronics 10-15 percent, and general merchandise 5 percent. In terms of market focus, Udaan generates 20-30 percent of its business in the top 10 cities. The next 200-300 cities account for 40 percent. Lower cities account for 30-40 percent of sales, where it aims to expand market share as it has defocused segments by retail and brands.

udaan currently has a network of over 3 million retailers and over 25,000 sellers in over 1200 cities covering more than 12,500 PIN codes. The Company aims to expand its retail coverage to over 5 million retailers by December 2022.

Organized wholesale and distribution are opportunities and udaan aims to change through Kirana e-commerce. Under the “Kirana E-Commerce” model, udaan offers over 500,000 products in 14 categories. As part of Project Bharat, the company is on track to reach 1,500 cities by December 2022 and plans to expand coverage to 10,000 cities over the next 10 years.

According to a recent report by CLSA, Udaan has a 60 percent market share in Kirana’s e-commerce space. The report states that Kirana e-commerce adoption has increased during the pandemic, reflected in 6x revenue growth for Bengaluru-based Udaan in FY21 (Rs 59 billion). With the existing capacities, the company aims to scale, which will increase profitability. At its current size, it has a gross margin of 5.5 percent (potential for 8-10 percent) and is balanced at the premium level. The company is targeting steady growth of 50 percent with the launch of Kirana E-Commerce.

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