Hi, Santosh, thanks for the feedback. The revenue model for a company like Elasticrun or Udaan is not very different than a traditional distributor's, where their profitability depends on the margins they get from the FMCG company and on their cost structure. But these B2B companies have the resources to undercut distributors and lose money to gain market share, in the hope of eventually selling their own brands. Jiomart is further along than Udaan on this journey. As far as the absence of cannibalisation goes, FMCG companies' authorised-distributor network starts thinning as they go deeper into India's hinterlands. HUL and ITC have the best coverage of rural areas, but even they don't have the kind of direct-distribution reach they would like. For instance, HUL products are available in nine million outlets, but only 3.5 million of these are serviced by its own distributors. The rest are mostly catered to by wholesalers, who are the primary conduit between FMCG companies and kiranas beyond cities and towns. So when a B2B players operates in rural areas, the chances of it coming into conflict with distributors are not nowhere near as high as in cities.
Seetharaman G