PRICE COMPANY EMERGING AS LOWEST-COST COMMUNITY GROCERY E-COMMERCE PLAYER


Price company is India’s largest B2B e-commerce firm, laughed recently as an arm of udaan. It is now emerging as the lowest cost player in the community grocery e-commerce.

According to udaan, Price Company has been continuing to grow and within three months of operations, it managed to emerge as the lowest cost player in the initial launch maker of Kolar, Tumkur, and Mysore in Karnataka.

Price Company has been benefiting massively by riding on the huge Kirana stores, supply chains and logistics network, and sourcing capabilities of udaan. Udaan has been sourcing its fresh products directly from farmers in large volumes, hence, it becomes the sourcing point for the Price Company too with a major cost advantage. This resulted in the fresh fruits and vegetables that have been sourced by the Price Company being 15-20 percent cheaper which resulted in a gross margin of 2x in relation to the competition. Major competitors of udaan are, Reliance JioMart, Amazon India, Flipkart, and the Tata group.

“As we expand to more cities and towns across Bharat our intent is to further leverage udaan’s massive capabilities which include huge Kirana networks, solid supply chain, and logistics backbone, and deep sourcing abilities to bring our overall operating costs to a minimum.”

For example, Price Company uses the existing supply chain and logistics network of udaan that goes to Kirana stores in over 1000 towns and cities across India that carries over 7000-8000 tonnes of products daily. This is the reason for the extremely low shipping cost which is less than 10 percent of the order value for Price Company, however, shipping costs of its competitors are usually around 40-50 percent of the order value.

Another benefit that Price Company has is by leveraging the existing Kirana network of udaan for its go-to-market strategy - the acquisition of community leaders or retailers. According to udaan this resulted in the speed-up of scale operations across the cities.

“Going forward we will continue to work towards further optimizing these costs and bringing more efficiency across our operations, these steps will enable us to provide our retailer partners with better margins, and end customers will have better products at lower prices while helping us achieve positive unit economics.”

Price Company was initially launched in five cities in south Karnataka, last year in November. The company has expanded its operations across Telangana and Tamil Nadu in the past three months which resulted in the 100 percent growth in orders week-on-week across the cities where the service is currently available. The company aims to expand its operations across 1500 cities this year by December. According to udaan, Price Company will massively benefit the micro retailers and community leaders with an impressive increase in their business income.

The platform has an innovative business model - a ‘community grocery e-commerce’ service. It aims to serve and offer the advantages of e-commerce scale to over 500 million customers of Bharat who still have not had the taste of e-commerce yet.

Udaan has been giving solid competition to various other players in the market including Reliance’s online grocery platform JioMart. After interviewing a total of 301 retailers, Kotak Institutional Equities revealed that around 45 percent of them chose udaan as a distributor partner while only 33 percent chose JioMart. It is said that udaan had a partnership of 14.7 months with 5 surveyed retailers in Gurugram.