Chronicling the rise of B2B eCommerce platforms
B2B marketplace startup Moglix became India’s 12th unicorn of 2021 as it recently closed its US$120 million Series E funding round on May 17 at a total valuation of over US$1 billion. Moglix is a business-to-business (b2b) eCommerce marketplace platform for industrial goods. Moglix operates a supply chain ecosystem of 16,000 suppliers and over 35 warehouses as well as logistics infrastructure, providing India’s manufacturing sector with end-to-end service capabilities spanning procurement, logistics and supply chain financing . With close to 500,000+ SKUs on its platform, Moglix could very well be the largest b2b marketplace serving India’s manufacturing sector.
Moglix follows on the recent successes of other vertical-specific b2b eCommerce marketplace platforms like Zetwerk and Infra.Market, a fellow unicorn that recently closed a US$100 million funding round, that serve various niche end users across India’s wider industrial sector, illustrating growing enterprise adoption of eCommerce in India.
Compared to conventional offline distributors, eCommerce platforms offer a seamless digital transaction experience, providing valuable transparency in volume and pricing information to encourage price discovery and motivate purchasing behaviour. End-to-end, full stack service digitises and expedites the entire procurement process by centralising or automating payment, delivery and logistics, freeing up valuable time and resources for customers in the process. There are evidently strong network effects in such a marketplace model, whereby additional users within a platform’s ecosystem enhances the value derived from the platform and its services for all users. With its clear market leadership, Moglix has demonstrated considerable finesse in rapidly onboarding buyers and sellers at scale, growing its user base and dominating the local market for b2b industrial procurement in the process. Having previously established operations in the UK and Europe, we believe that with its latest capital raise, Moglix is well positioned to further develop its service capabilities and aggressively expand its global footprint in foreign markets.
eCommerce marketplaces have been one of the fastest growing industries in 2020 as the Covid-19 pandemic continues to evolve, imposing lockdowns and travel restrictions and throttling global supply chains in the process. As a result, businesses have had little choice but to rely on remote selling or buying, such as via eCommerce platforms, to minimise disruptions to workflows and maintain supply chain resilience. In a recent study conducted by McKinsey & Company in 2020, 65% of industrial distribution customers are already procuring from marketplaces such as Amazon and eBay. Digital marketplaces are also expected to account for about 60 percent of digital-commerce volume in the next few years. As we enter the inevitable phase of economic recovery, we are likely to see cyclical recovery across industrial sectors in light of growing optimism and spending momentum by consumers and businesses. As businesses increasingly rely on digital procurement and continue to invest in the digitisation of their supply chains, we believe that b2b marketplaces will continue to be a fast growing global market, and we are excited to continue monitoring developments in this space.