A peculiar crossover trend is taking hold in the Indian startup ecosystem: hardcore business-to-business players are setting up direct-to-consumer operations and the reverse.

The early signs emerged in 2020 when B2B ecommerce major Udaan launched supermarket app Pickily. This created a minor stir as many wondered why a firm known for working with wholesalers and traders would dip its toe in the consumer-facing business of grocery.

Sticking with the approach, Udaan unveiled Price Company, a group buying platform for denizens of smaller cities and towns, late last year. It is similar to China’s budget ecommerce marketplace Pinduoduo. In 2020, Walmart merged its Indian wholesale arm, Best Price, with Flipkart, consolidating its entire farm-to-fork supply chain under one entity. 

On the other side of the spectrum, social commerce companies DealShare and CityMall began operating with a mix of retail stores and D2C channels. Reseller platform Meesho also started hawking products directly to consumers, pivoting to hybrid ecommerce. 

Reliance’s JioMart caters to kiranas as well as consumers, and Tata-owned BigBasket operates a trading business arm and is now piloting group buying.

This duality constitutes a significant strategic drift. But why are companies doing this?

“B2B companies think consumer companies get higher valuations, more capital and better gross margins. B2C companies think: Customer acquisition costs, sourcing and return on capital will work out better in a B2B business, so let’s do that,” Sumit Ghorawat, co-founder of B2B sourcing platform ShopKirana, told The CapTable.