Aditya Birla Group Forays Into B2B Ecommerce For Building Materials

Aditya Birla Group’s Grasim To Foray Into B2B Ecommerce For Building Materials

SUMMARY

Grasim will invest nearly INR 2,000 Cr in the platform over the course of next five years

The ecommerce platform will primarily focus on MSMEs in the segment, and will later expand to other categories

Grasim will compete with startups like Infra.Market and OfBusiness in the B2B ecommerce for building materials segment

Aditya Birla Group-owned Grasim Industries on Tuesday (July 19) announced that it will launch a business-to-business (B2B) ecommerce platform focused on building materials. The company will compete with startups like Infra.Market and OfBusiness in the segment.

The company will make an investment of nearly INR 2,000 Cr in the platform over the course of next five years. The move will leverage synergies between Grasim’s standalone businesses and other subsidiaries of the Group to scale up the new entity.

“The foray into B2B ecommerce is yet another strategic portfolio choice as it crystallizes our intent to invest in the new-age, high growth digital space. The building materials segment presents a huge scalable business opportunity with a proven path to profitability,” Aditya Birla Group Chairman Kumar Mangalam Birla said.

“With this foray, Grasim would be able to leverage the large B2B ecosystem within the Aditya Birla Group,” he added.

Grasim said that the digital platform will address various challenges within the existing supply chain. The platform will be operated by a newly recruited leadership team from the digital ecosystem.

The ecommerce platform will primarily focus on micro, small, and medium enterprises (MSMEs) in the building materials segment and will later expand to other categories.

“The company believes that B2B ecommerce is a high growth opportunity with attractive long-term returns and will be highly value accretive to its stakeholders,” the release said.

It is pertinent to note that the Group, through its subsidiary Ultratech Cement, is the largest cement producer in the country, and has also forayed into the paints business. Grasim Industries reported a consolidated net revenue of INR 95,701 Cr and an EBITDA of INR 17,772 Cr in the financial year 2021-22 (FY22).

Infra.Market and OfBusiness are among the current market leaders in the B2B ecommerce market for building materials.

Infra.Market has raised more than $406 Mn in funding so far. However, the startup has been under the scrutiny of the tax authorities. Earlier this year, the Income Tax Department conducted a search and seizure operation at 23 offices of the unicorn.

As per a report by Research and Markets, the global B2B ecommerce market size is expected to reach $20.9 Tn by 2027, growing at a CAGR of 17.5% during 2020 -2027.

The report also highlighted that the Asia Pacific region held the largest revenue share exceeding 65.0% in 2019 in terms of B2B ecommerce. The number is expected to expand at a CAGR of over 18% during the forecast period.