Written By Puja Bhardwaj
India is witnessing an excellent transformation in consumer digitisation. In 2010, the number of online transactions was less than a million; in 2022, it crossed over 100 million. The key driving factors behind phenomenal growth are various B2C marketplaces like Flipkart, Zomato, Swiggy, Ola, and Big Basket.
These are full-stack virtual marketplaces that connect buyers and sellers of physical goods and handle the whole transaction with all required services, including assortment, quality assurance, and logistics. They are often sector-specific in sectors like construction materials, agriculture, chemicals, fashion, consumer electronics, and jewellery.
These B2B vertical marketplaces have transformed the supply chains, with better transparency and innovative revenue streams. They have attracted a 20% share of marketplace funding, which is an all-time high.
Vertical marketplaces: Advantages
Vertical marketplaces specialise in one segment and focus on serving the needs of a specific industry. These platforms go beyond the transactions and strive to create value by working on industry-specific inventories. Further, they align with supply chain processes and also provide personalised insights from experts. The major benefits of vertical marketplaces include:
- Instead of moving through multiple platforms, customers find exactly what they need at one.
- When transactions happen at a trusted platform, it creates trust among customers and provides peace of mind.
- Vertical marketplaces get stronger brand equity as they establish trust by catering to the specific needs of an industry.
- This focused approach seems like a revolution for small and midsize enterprises. Earlier, these businesses struggled to enter and establish themselves due to the larger players. The vertical marketplace concept empowered them to level the playing field with access to a wider customer base without making huge marketing investments.
Obstacles in Vertical Marketplace Growth
Like every business, a vertical marketplace has its own share of challenges. One major issue is inventory constraints. Giant brands like Amazon take from thousands of sellers, but vertical marketplaces mainly rely on a smaller and specialised supplier base. As the company grow, it needs to compete with established E-Commerce players to carve out its own vertical marketplace niches. While these are major issues, the potential for growth of vertical marketplaces is remarkable.
The Future Outlook
In recent years, the younger buyers, like millennials and Gen Z, are actively involved in B2B purchasing; they will be looking for a simplified experience that they have experienced in B2C e-commerce.
The recent integration of AI tools in search and recommendations will make it easier for buyers to explore their needs, offer personalised recommendations, and also automate the entire workflow.
In the next decades, these marketplaces will evolve into more advanced intelligence hubs, with analytics, industry benchmarks, and insights, optimising operations. Private-label products will be introduced in the market as vertical marketplaces create high-demand private-label offerings by harnessing purchasing trends.
The B2B Vertical Marketplace
NowPurchase: An AI-enabled B2B, NowPurchase is an innovative platform engaged in metal manufacturing. The company has recently raised around $8.6 million (Rs 80 crore) in a funding round led by Bajaj Finserv. NowPurchase was founded by Naman Shah and Aakash Shah; the startup plans to use the funds for expanding scrap recycling infrastructure and improving its AI platform, MetalCloud, to optimise manufacturing.
Moglix: Moglix is one of India’s largest e-commerce marketplaces for industrial goods. It has distinguished itself as a marketplace leader with a multiplied valuation of $2.6 billion from $1 billion within eight months. The platform has served 500,000+ small and medium-sized businesses and enterprises over the years and handles a supply chain network of 16,000 suppliers across 40 warehouses and logistics infrastructure.
Jumbotail: A unique food and grocery marketplace, Jumbotail aims to empower Kiranat stores with top-notch supply chains and fintech solutions. Giving a broader supplier coverage, Jumbotail helps store owners sell their products beyond the distance issues and helps customers find all their products with just a few clicks.
Bottom Line
The B2B online vertical marketplaces have shaped the future of the business realm in India and worldwide. This market segment is growing faster than any other digital sales channel. For all the aspiring entrepreneurs and business owners, exploring growth—the opportunity is right here. Stay tuned for more such insightful content!
