B2b e-commerce market development: is it time to go for it?
You already have an online store or different B2C merchant sites and you are wondering if it is a good idea to get into the B2B field in 2021. The answer may well be positive.
Let’s first take a quick overview of B2B digital commerce around the world in this very special year 2020, marked by an exceptional health crisis. Then, we will discuss the global rise of B2B digital commerce “marketplaces”.
The characteristics of B2B e-commerce
Why not take advantage of this year to explore new markets in a sector of digital commerce in which you have not yet taken an interest, B2B? More and more e-businesses are mixed, that is to say they work in B2C, but also in B2B. After all, selling your products to other companies could be a way to diversify your business, reach a new type of customer, and possibly increase your bottom line. Before that, let’s see what characterizes B2B online commerce.
Basically, having a B2B e-commerce is simple, you have to provide your products or services to customers who are also companies or organizations. It is not uncommon to observe online businesses on the web that cater to two kinds of customers: individuals and professionals.
So what’s the point for an online seller to tackle this segment?
In theory, once you’ve established a good reputation in e-commerce and your company has a few solid big customers, you don’t have to put a lot of effort into marketing because the corporate customers know you. And are faithful in principle, provided that the correct level of quality is maintained. We are therefore talking about saving money and time.
It happens to sell products several times to the same customer in B2C, but this can be rare. In B2B, on the contrary, it is a peculiarity that allows you to keep business partners unchanged for a long time.
In B2B, customers normally prefer to source from the same e-commerce because they know where they are going and most importantly, they don’t have to repeat the long buying process that usually happens with the first order. This is a strong point of B2B: loyalty to the supplier.
Coved 19 crisis and B2B e-commerce trends
According to a recent study, the global market size of this B2B commerce is expected to reach $ 20.9 billion by 2027, with a CAGR (compound annual growth rate) of 17.5% during the period of forecast. At the start of 2020, COVID-19 had a major impact on the e-commerce industry. In particular, it was noticed that customer behavior changed significantly during the containment phase in countries such as the United States, Germany, Italy, Spain, France, India, China and Russia.
Online shopping was popular during this health crisis because of the constraints and bans on public gatherings issued by national governments. Due to the impossibility of living normally from a social point of view, millions of people have logically turned to the internet and we have seen interactions move towards digital and B2B communications and sales have also adapted to the digital. According to e-commerce industry experts,
B2B portals play a central role and help SMEs and large companies reach certain remote areas and do business all over the world like 3 ply mask buyer . These portals facilitate the establishment of new business relationships between companies in addition to supporting existing ones. Additionally, B2B e-commerce platforms enable businesses to reduce marketing spend, better manage supplier and customer relationships, and drive business engagement.
Creating new avenues
It is important to note that in addition, the proliferation of smartphones and the gradual penetration of the internet are creating new avenues for market growth. The ease with which it is possible for companies to do business in B2B through the help of the mobile phone (tracking their inventory, displaying orders and payments, etc.) has caused a new wave of arrivals on the platforms.
B2B electronic commerce forms. In addition to this, in the context of growing and ever fiercer competition, more and more companies are opting for online business models with the aim of gaining a competitive advantage in the B2B market.
The future of B2B e-commerce, in particular “marketplaces”.
Many experts believe that marketplaces are likely to be one of the major factors in the growth of B2B online commerce in the years to come. Do you all know the Amazon or Alibaba website? Others will follow their success.
There are two reasons behind this development: Online B2C entrepreneurs are entering the business-to-business market with the aim of contributing their proven methods and experience. The digital offer is now well structured and it is in full development for the B2B sales sector.
Indeed, online marketplaces already provide all the means to optimize the purchasing process. In online B2B, a phenomenal number of sellers have the opportunity to meet just as many buyers on digital platforms and even small sellers are starting to join the movement.
One only needs to look at the incredible success of Amazon Business to realize the magnitude of the change that is taking place.
The other considerable argument that could convince more and more companies to take an interest in online marketplaces is the digital aspect of the question: a single point of entry for all transactions results in increased productivity of purchasing processes, and by extension lower costs.
With the use of marketplaces, the costs induced by the use of traditional means such as human commercial weight, various telecommunications channels (telephone, fax, etc.) will gradually fade away and give way to digital channels. Much more profitable. Not to mention the time factor.
The sectors that should be most affected by this development are the aeronautics and automotive industries, industrial machinery and office equipment.
In short, this is what makes the strength of B2B e-commerce today from the buyers’ point of view: the size of the offer, excellent quality of service and competitive prices.
We can thus consider that this economic model which presents a prototype of profitable and sustainable growth is set to develop.
It appears that, yes, this year and those which follow could be the right occasion to engage your business in the path of B2B e-commerce.
Note that, compared to B2C commerce, the latter has certain intrinsic difficulties that it is always good to remember. First of all, be aware that the B2B market is limited in terms of targets, as there are of course fewer companies than individuals. And the more specialized your product, the fewer companies that want to acquire it.
Another drawback of B2B e-commerce, which can also be seen in traditional sales, is the sometimes excessive length of the negotiation process between companies and suppliers, especially during the first sales.
In large companies, or “large accounts”, as some call them, it is not uncommon to have several interlocutors belonging to several hierarchical levels involved in the negotiations. This may explain the exaggerated length of commercial negotiations. However, we have seen that the advent of B2B marketplaces should fix this aspect of things.
Let us not forget to say also that these relations at times resemble the fight between David and Goliath. Large companies that place large orders do not hesitate to negotiate hard on prices, ask for discounts and sometimes even require additional services.