WholesaleBox, the Jaipur-based B2B wholesale e-commerce platform, today announced that it has raised a pre-Series A funding round of $2 million from angels, institutional investors, Contrarian Vriddhi Fund and an undisclosed Tier-I VC fund. The round also saw participation from Manish Maheshwari, CEO of Network 18 Digital and ex-Flipkart head of Seller Ecosystem, among others.
The team at WholesaleBox claims that the funds will be used to scale their tech and expand into newer markets. They are also looking to enhance the overall buyer and seller experience. Speaking on the investment, Manish Maheshwari says that there exists significant scope for technology-driven disruption on the seller's side in the e-commerce industry.
He also believes that WholesaleBox has the potential to transform and revolutionalise the space and become a trusted partner to sellers like Amazon and Flipkart.
WholesaleBox is an e-commerce portal for traditional wholesalers and traders in the unbranded fashion and lifestyle category. It helps retailers get a vast variety of clothing and fashion goods right at their doorstep.
The platform connects manufacturing and retailing businesses for the transacting of goods, removing close to seven intermediary layers and bringing costs down by at least 20-30 percent.
The idea behind WholesaleBox was born when 33-year-old Rohit Dangyach, an IIT Roorkee and IIM Bangalore alumnus, noticed the irregularities present in the market with respect to prices. The stocks that were offered at a wholesale price of Rs 350 to a particular retail outlet, would later be sold for Rs 295 to a trader in Mumbai, and were bought at Rs 250 from a factory in Jaipur.
Started in 2015, the founding team of WholesaleBox comprises Rohit, Chandan Agarwal, an MBA graduate and investment banker, who had a backpacker’s hostel chain, Rakesh Shekhawat, who ran a software services company at Startup Oasis incubator, and Madhur Bhaiya, an IIT Delhi graduate .
Somak Ghosh of Contrarian Vriddhi Fund says that over 98 percent of the Indian retail market operates through offline channels, leaving open a large opportunity to a platform like WholesaleBox to bring in significant efficiencies by organising the sector’s multi-layer supply chain.
“By buying through WholesaleBox, a shop can easily break down its orders into several orders of smaller quantities based on the demand and fashion trends,” says Rohit.
He adds that they initially sold products sourced from the local market in Jaipur. Their main objective is to provide doorstep delivery to retailers along with better choice, while reducing their landing cost by 25 percent.
The team claims to have over 15,000 registered retailers and over 350 manufacturers. They believe that, post funding, they will be able to serve more than half of retailers' shelf space requirements for the domains they operate in.
Chandan Agarwal, Co-founder and COO of WholesaleBox, adds that they, as a team, enable both manufacturers and retailers to be more competitive from a price and cost perspective, thereby preparing them better for changing business requirement while solving for their other pain points of payments and collection.
According to some rough industry estimates, B2B e-commerce is a $500 billion market in its early stages in India. There are 4.8 crore SMEs that need to secure bulk supplies, and that's a much bigger opportunity than B2C e-commerce.
A report by Frost & Sullivan suggests that by 2020, the B2B e-commerce market will be worth $12 trillion. This trend makes B2B e-commerce almost thrice as big as the B2C market.
Alibaba is a pioneer in the B2B e-commerce space, with a GMV of a whopping $27.28 billion. Currently, China, the US and Japan are the biggest drivers of the B2B e-commerce market. In India, the market is expected to touch $674 billion.
Earlier this month, Accel Partners-backed Bizongo, the B2B packaging marketplace, had raised $3 million in Series A funding from IDG Ventures. Recently, Udaan, the B2B platform started by Sujeeth Kumar, Amod Malviya and Vaibhav Gupta, raised Series A funding of $10 million in a round led by LightSpeed Venture Partners.
Other players in the space include Wydr (founded by an ex-Shopclues founding member), and IndustryBuying, a B2B platform for industrial products.