As Flipkart rides in choppy waters, investor attention shifts to other plays in ecommerce

Photo credit: Keoni Cabral.

India’s leading ecommerce marketplaces Flipkart and Snapdeal had a rough time in 2016, with valuations dropping and losses mounting. This is unlikely to change in a hurry. Attention has shifted in the meantime to other plays in ecommerce.

One of these is the wholesale marketplace: it’s not as sexy as consumer-facing ecommerce, and it has to negotiate a tough road to adoption and scale.

The wholesale market in India is unorganized and fragmented.

But it’s a model that’s easier to monetize and there’s huge untapped potential for it in India. Industry reports currently peg the Indian retail market at US$490 billion and project its growth at a compound annual growth rate of 6 percent to reach US$865 billion by 2023. Tens of millions of small retailers are part of that, and they face issues in sourcing and pricing, just as consumers do.

Investors see opportunity in this space amidst the hiatus in the broader ecommerce scene. Evidence comes in today’s announcement of follow-on funding in mobile commerce startup Wydr. The business-to-business (B2B) startup raised an undisclosed amount from its initial investors, Bessemer Venture Partners, Stellaris Venture Partners, and Jungle Venture Partners. Singapore-based Axis Capital also participated in this round.

See: 25 failed startups in India this year and what you can learn from them

Tons of action

Photo credit: Pixabay.

The Gurgaon-based startup was launched in March last year. Its founder and CEO Devesh Rai was earlier a founding member and VP of ShopClues, an ecommerce company with a focus on small-town India.

Wydr is an app-based marketplace connecting retailers with manufacturers and wholesalers across categories like fashion, home, automotive, and electronics. It claims to have 1,000 merchants selling their products on the app, and that 200,000 retailers have downloaded the app. With the fresh round of funding, the startup aims to expand its seller base, introduce new categories, and upgrade its technology to deliver more value to users.

“The wholesale market in India is unorganized and fragmented. We believe that there is headroom for technology innovation and business growth in this segment,” says Amit Anand, founding and managing partner of Jungle Ventures.

Another B2B marketplace Bizongo got series A funding from Accel Partners and IDG Ventures a couple of months ago.

India is home to eight significant players in this space: