Enterprise e-commerce rides quick commerce wave, but credit challenges remain

Mint

10-07-2025

Bengaluru: E-commerce startups that cater to enterprise clients and retailers in the country are boosting their ability to shorten delivery timelines, hoping that same-day and next-day deliveries will enhance buying experience and result in improved cash flow in the supply chain.
Tiger Global-backed unicorn Moglix, which supplies industrial tools and equipment, now delivers more than 10,000 stock-keeping units (SKU) by the next day, within a few months of rolling out quicker deliveries. This is in contrast to its previous timeline of 96 hours prior to August 2024, according to its founder and chief executive Rahul Garg. All of the firm's 5,000 monthly orders are now fulfilled the very next day.
Bengaluru-based staples and vegetables supplier Udaan, too, is shipping a higher number of orders within 24 hours over the past few months, with emphasis on kirana stores and HoReCa (hotels, restaurants, catering) businesses. 'Years of focused investment in supply chain intelligence and operational execution have enabled us to balance speed with sustainability and scale with efficiency," a spokesperson for Udaan said.
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Flipkart's wholesale marketplace has invested significantly in its same-day and next-day delivery capabilities in recent months, with over 6,000 products now reaching clients faster. 'The move towards faster deliveries was driven by a combination of evolving customer expectations and shifting industry dynamics. In the B2B [business-to-business] segment, clients increasingly demanded quicker replenishment cycles to reduce their inventory holding and respond faster to market demand," Dinkar Ayilavarapu, vice-president and head of Flipkart Wholesale told Mint.
Quicker deliveries have become crucial for supply chain companies to strengthen loyalty and keep up with the growing competition in the marketplace ecosystem. Faster deliveries compress the procurement cycle and trigger invoicing sooner, which in turn accelerates cash flow across the supply chain.
Business-to-business marketplaces that are online-first and technology-enabled are expected to represent a market opportunity of $200 billion by 2030 from $20 billion in 2022, according to estimates by Bessemer Venture Partners.
'Faster deliveries mean that the B2B customers can keep lower inventories at their end. This will make them more capital efficient, akin to how Just-In-Time (JIT) revolutionized the automobile industry," according to Madhur Singhal, managing partner (consumer and internet) at global consulting firm Praxis Global Alliance.
Faster deliveries also help companies respond to changing market demands more efficiently, minimizing loss to a reasonable extent.
Just-In-Time is an inventory management system pioneered by Toyota in the 1970s, which relies on daily deliveries of supplies with the aim of eliminating waste due to overproduction and lowers warehousing costs. It is said to have simplified supply chain management for large automakers globally.
Some categories lend themselves to quick commerce better than others.
High-demand, fast-moving categories—grocery, personal care and general merchandise—where inventory turnover and fulfilment infrastructure are stronger are relatively easier to scale, according to Flipkart Wholesale's Ayilavarapu.
Moglix's Garg added that high-frequency industrial consumables, PPE (personal protective equipment), and MRO (maintenance, repair and operations) items are also well-suited to quick deliveries.
Unlike quick commerce in consumer-facing companies, faster deliveries in B2B don't hurt a firm's profit significantly as these companies are inherently equipped to handle complexities including higher costs and volumes. 'Moglix has absorbed a 1–2% increase in fulfilment cost to maintain customer pricing. Several levers are helping optimize costs—hyperlocal deliveries ensure that the distance travelled per shipment remains minimal and since we are operating on a 100% prepaid model our RTOs (return to origin) do not exceed 5% mark, and it also helps in eliminating credit risk," said Moglix's Garg.
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However, firms will have to store supplies closer to customer clusters, batch process orders across a wider set of customers, maintain robust and standardized item masters and lower costs in manpower and vehicle running costs to be able to keep costs in control, said Praxis Global Alliance's Singhal.
Firms like Moglix are even willing to explore delivery within minutes, subject to strong demand and sustainable unit economics. 'Moglix plans to scale next-day delivery across more geographies and products first. Moving to sub-hour delivery would require heavy investments in micro-fulfilment, a possibility only if supported by strong demand and unit economics."
Credit challenges
While faster deliveries provide convenience and value addition, enterprise clients see the feature as a mixed bag. A Gurugram-based grocery retailer—who works with a major B2B startup—said that shorter delivery timelines have resulted in shorter credit repayment cycles, making it challenging to meet the obligations. 'Our credit cycle has reduced from 30 days to 14 days in some categories like general merchandise. It's manageable in festival months where products get sold faster, but other times it is challenging," this person said, asking not to be identified.
Another business owner who deals in industrial equipment said that he is indifferent to quicker deliveries and would prefer stable repayment periods. 'Requirements in our business remain more or less steady throughout the year. I don't see value in quicker deliveries like individual consumers would for essential items like grocery and food."
However, firms are trying to be mindful. 'If done systematically and predictably, faster deliveries almost have no impact on credit or repayment cycles. It is unpredictability which can disturb our customer's working capital cycles—if we deliver faster than the customer expects, they may have previously-purchased unsold stock and also may not have the capital to buy our stock; and if we are slower then they may stock out," said Flipkart Wholesale's Ayilavarapu.
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Moreover, Flipkart Wholesale assigns credit cycles based on customer profiles and business types, not delivery speed. The firm has also introduced more flexibility in credit approvals to support faster order-to-delivery cycles. 'Digital credit and instant credit approvals help ensure there's no disruption in faster fulfilment. The aim is to ensure that speed in delivery is matched by ease in transactions, without adding pressure on working capital for clients," according to Ayilavarapu.
Moglix's Garg noted that while internal credit and payment policies have been calibrated to align with the faster pace of operations, formal credit terms remain unchanged.
According to Praxis Global Alliance's Singhal, firms will have to negotiate smarter deals with clients to maintain operational balance. 'Credit terms are typically linked to invoicing. B2B customers will have to expedite their own finance processes like purchase order issuance to be able to get fast deliveries. The B2B suppliers will have to be efficient in invoicing and have robust systems so that GST, inventory management and cash reconciliations do not become a problem."