Aditya Birla Group flagship Grasim on Tuesday announced that it will foray into B2B e-commerce platform for building materials segment. In this process, the company will invest Rs 2,000 crore over the next 5 years.

"This investment adds a new high-growth engine with clear adjacencies within Grasim’s standalone businesses as also that of its subsidiaries and associate companies," the textile company said in a statement.

Through the new platform, the company will primarily focus on MSMEs in the building materials segment for example steel, cement, other raw materials, with the potential to further extend to other relevant categories. The key value proposition would be an integrated procurement solution including on-time delivery and a superior product range at competitive pricing, it added.

Furthermore, this platform will be operated by a newly recruited leadership team from the digital ecosystem.

"The company believes that B2B e-commerce is a high growth opportunity with attractive long-term returns and will be highly value accretive to its stakeholders," it said.

Elaborating on the procurement of this segment in the country, Aditya Birla stated that the segment has grown at a CAGR of around 14 per cent over the last 3 years. This industry is estimated at approximately $100 billion with current digital penetration of just 2 per cent. "Grasim’s digital platform will address various challenges within the existing supply chain," it added.

Kumar Mangalam Birla, Chairman, Aditya Birla Group said, "The foray into B2B e-commerce 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. With this foray, Grasim would be able to leverage the large B2B ecosystem within the Aditya Birla Group. This move will also catalyse the growth of the MSME universe in India and provide an impetus to the Government’s vision of ‘Digital India’."

The entry of Grasim into the building materials segment through this investment is likely to give competition for the likes of other B2B platforms, such as InfraMarket and OfBusiness.

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