What happened — B2B ecommerce marketplace Udaan, which basically helps shop owners and retailers procure goods in wholesale, is locking horns with Parle, Amul, and few other FMCG brands, because the brands decided to stop working with the startup.
Some context — all started when last week Udaan filed an antitrust lawsuit against Parle, because Parle abruptly decided to not supply one of its most loved products, the Parle-G biscuits, to Udaan anymore (we’d probably do the same lol).
But Parle says its distributors are crying that Udaan is undercutting them at the retail point, so it had to act. Parle took that up in Udaan, and clearly talks didn’t go well, which led to an official complaint.
So… a pissed Parle, in retaliation, decided to cut off ALL its products including Parle-G from Udaan’s catalog of distribution. Amul, and some other brands followed suit.
Not an isolated case — a couple weeks ago, JioMart and HUL’s romance was similarly blocked by HUL’s 3,500+ distribution network, who alleged that Jio-bois were trying to undercut distributors at retail points, and hence HUL better get rid of them, or be ready for backlash. HUL caved.
Bottomline — Indian FMCGs rely heavily on distributors’ infrastructure to store products, balance lead times, all of which is extremely important for them to defend market share. No way they would sour their relationships because of some “digital” benefits of B2B marketplace.
Big picture — not entirely unimaginable that even regulators move to bring strict rules and guidelines to protect the middleman running India’s $850B+ retail industry.
aight, rant over.