Udaan’s community grocery buying vertical Price Company aims to expand its operations to entire South India by March 2022. 

Launched in November 2021, Price Company operates on a reseller-led model, wherein resellers (mini/micro retailers) act as conduits between the app and the end-users and earn a margin on each sale. BusinessLine spoke to Ankit Agarwal, Business Head, Price Company about the company’s expansion plans and the potential of community grocery buying in India. 

Which cities does the company plans to expand in South India? Is there an expansion target for 2022? 

We started with a pilot launch with five cities in South Karnataka and in the last two months we have scaled and launched our operations across the States of Telangana and Tamil Nadu. In the states where we have launched our operations, our aim is to expand and make the services available in 20-30 cities in the next three months. Our plan is tocover the entire South India by the end of March 2022. Over the next 12 months, our aim is to launch services in 1500 towns and cities and onboard between 3.5 million - 5 million retailers by December 2022. 

Do you have an existing reseller/retailer base in the new cities that you are targeting? If not, what efforts have you planned there? 

With Udaan’s extensive network and robust capabilities built over the last five years (3 million retailers, over 200 warehouses, 8-9000 tonnes of fresh and food products sold daily, delivery in 1000 towns and cities, 12,000 pin codes, delivering 5 million orders per month) we will leverage the existing capabilities – sourcing of fresh products from farmers/ FPOs, vast network, reach, scale, and experience for the benefit of retailer partners and the customers. 

Are the majority of new cities in your expansion plan from Tier 2? Is there a plan to include Tier 3 and beyond regions as well?

Our major focus for Price Company will be to expand into Tier 2/3/4 towns that are currently not addressed by most ecommerce players. Our overall plan is to launch services in 1500 towns and cities by December 2022 and onboard between 3.5-5 Million retailers by Dec 2022. 

What is the volume of orders done by Price Company on a monthly basis?

We have received encouraging responses from the states where we have launched our services. We are witnessing around 100 per cent growth in orders week-on-week. As we expand to more cities and see rapid customer additions, we expect to see incremental growth on all parameters. 

What is the revenue potential that you see for Price Company? How do you see it impacting the revenue numbers of Udaan?

If one were to look from China’s perspective the revenue potential is huge. The current community grocery buying market in China isestimated to be $50 billion and saw a growth of 5X over the last two years with 1.5 billion orders per month (50 million orders per day). Given India has almost similar demographics and a large population with increasing internet penetration the market is set to see robust growth in the next few years. We believe once Price Company attains the required scale it will emerge as one of the major growth engines for Udaan. We are confident we will be able to grow the market and ensure the benefits of our scale benefits everyone in the ecosystem. 

Why did udaan choose the community buying model for grocery delivery instead of quick commerce? What are the benefits of this model?

Given our extensive experience in B2B e-commerce, entry into the community grocery e-commerce business is a natural progression. Through Price Company our aim is to work towards empowering the mini/micro retailers at the bottom of the pyramid in Tier 2/3/4 towns leveraging technology. We believe for a large country like ours, such business interventions are required as they promote the local ecosystem.

Additionally, our community grocery e-commerce model will benefit the end customers with better quality and fresh products at the most affordable prices due to enhanced efficiency and waste reduction as a result of our vast and efficient supply chain and logistics infrastructure that we have established over the past 5 years.

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