B2B Marketplace is a sales channel that allows users to build their own store within some of the largest e-commerce platforms in the country. High business scalability, coupled with the best technology platform, higher traffic and sales volume, broad audience profiles, and partner in delivery, contributes towards revenue generated by the B2Bs e-commerce marketplace. It offers several benefits, some of which are listed below:
A significant number of start-ups are entering into the B2B e-commerce space to leverage the opportunities and profits provided by these marketplaces. B2B is considered the fastest-growing e-commerce platform and presents a high potential for small and medium businesses. For instance, Moglix, a start-up for B2B e-commerce transactions, primarily focuses on digitally transforming the manufacturing sector’s supply chain in India. The company is supported by International Finance Corporation, Jungle Ventures, Accel Partners, and industrialist Ratan Tata.
Buyer Oriented E-Commerce- This business model is used by large business houses that make large volume purchases and possess an exceptionally high purchasing capacity. As these marketplaces support transactions and procurement processes, they offer significant potential in cost savings. Mostly, buyer-oriented marketplaces are prominent in industrial sectors with a few eminent buyers.
Supplier Oriented E-commerce- A supplier-oriented marketplace is operated by a large number of suppliers who seek to establish an effective and efficient sales channel and, subsequently, cater to a large number of buyers.
Intermediary Oriented E-commerce- In intermediary-oriented e-commerce, an intermediary company establishes a marketplace where business buyers and sellers meet. Here, both buyers, as well as sellers, organize auctions. There are two types of marketplaces in intermediary oriented e-commerce, namely
The fashion and apparel sector, the fastest growing e-commerce sector, is a prominent segment in the B2B e-commerce market. Fashion and apparel distributors, wholesalers, and manufacturers have specific requirements for e-commerce. According to Cloudify, 49% of the B2B buyers in the fashion sector make half to three-quarters of their purchases online, which is attributable to B2B platforms’ user-friendliness and availability of real-time inventory.
In the automotive sector, B2B e-commerce is primarily used by car manufacturers to buy raw materials from suppliers. For example, Ford uses a system to classify suppliers for various levels based on the components used in the car manufacturing process. When the company needs to buy seats or systems, the firm informs first layer suppliers via its e-procurement platform. With this system in place, the company enhances its relationships with suppliers, reduces inventory, and saves transaction costs.
An increasing number of suppliers in the food and beverage sector is shifting to e-commerce platforms with the goal of enhancing customer relationships with customized promotions and pricing. Such as, TradingTable: A B2B e-commerce platform for restaurant operators that connects distributors, operators, and suppliers and helps simplify and speed up the process of buying and selling
B2B e-commerce is gaining traction in the healthcare industry as healthcare providers, including doctors, nurse practitioners, and insurance companies are promoting digital platforms to enhance efficiency, lower transaction costs, and provide real-time inventory across the supply chain. A research study by the Health Industry Distributors Association estimates that by 2020, 85% of the total B2B buyer/seller relationships will take place without human interventions.
Rising demand for high-quality consumer electronics products at reasonable prices is compelling most business organizations to shift to B2B e-commerce platforms. According to a research study by PFSweb (Priority Fulfillment Services), B2B e-commerce is growing 19% per year, and 74% of B2B buyers stated that buying from a website is more convenient than buying from shops and sales representatives.
The others segment considers furniture, toys, hotels, interiors, and reservations. The furniture industry is a significant adopter of e-commerce in both commercial and residential sectors globally.
Some of the key B2B marketplaces in the U.S. include Amazon, Alibaba, eBay, Global Sources, and Made in China. A recent survey of B2B vendors revealed that 57% of B2B organizations believe that e-commerce is shifting from offline to online, which is validated by the significant investments made by B2C giants such as Amazon, eBay, and Google. B2B e-commerce is a billion-dollar industry, and various companies are generating a significant amount of revenue through the marketplace. The below graph shows the revenue generated in 2015 by some of the key B2B companies located in the U.S.
Figure: 1-Revenue Chart of some of the major B2B companies based in the U.S.
Europe is a prominent consumer base for the e-commerce sector with its 20 national commerce associations. It includes the Greek e-commerce Association (Greece), e-Commerce Poland Chamber of Digital Economy (Poland), and KAUPPA.FI (Finland), among others. According to export.gov, in France, 20% of French business firms purchase via B2B online marketplaces. The below figure depicts the segment-wise share of B2B e-commerce in France.
Improving infrastructure facilities and the rising number of internet users are envisaged to propel the market growth in Asia-Pacific. The ubiquity of smartphones in the region contributes to the growth of the B2B e-commerce market. According to GSMA, smartphone users in Asia-Pacific reached 2.5 billion, and this momentum is expected to remain strong in the coming years.
Latin America is projected to witness significant growth in the global b2b e-commerce platform market during the forecast period, owing to the increasing number of internet users and rising social media user base. According to Internet World Stats, the number of internet users in Latin America was around 417 million in 2018. B2B online transactions in Latin America have been growing considerably on account of the increasing shift of wholesalers and manufacturers from traditional systems to online platforms.
The Middle East and Africa region are expected to witness considerable growth in the B2B e-commerce market, owing to the region’s high spending potential as a result of a high per capita income. Additionally, constructive regulations related to e-commerce in the Gulf Cooperation Council (GCC) countries are likely to encourage the growth of the B2B e-commerce market in progressive economies.
In the U.S., customs regulations and licensing, taxes, and duties are applicable to e-commerce, which is the same as for offline exporting. There are no legal variations for e-commerce and other transactions. Nowadays, e-commerce-specific rules and regulations pertaining to customer privacy are affecting the U.S. exporters. Recently, the International Organization for Economic Cooperation and Development (OECD) issued a recommendation for e-commerce best practices guidelines to understand customer privacy. These guidelines primarily focus on the following factors:
|Market Size||USD in Billion By 2030|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
|Segments Covered||by Type (Buyer Oriented E-Commerce, Supplier Oriented E-commerce), Sector (Apparel and Fashion, Automotive Parts)|
|Geographies Covered||North America, Europe, Asia-Pacific, LAME and Rest of the World|
|Key Companies Profiled/Vendors||Alibaba, Amazon, B2W, ChinaAseanTrade.com, CuteStat.com, DHgate.com, DIYTrade.com, ECPlaza Network Inc, eworldtrade.co, Flipkart, Focus Technology Co., Ltd, Global Sources, IndiaMART, iOffer, KellySearch.com, Kinnek Business Solutions LLC, KOMPASS, Naruvis.com, ShopKirana E-Trading Private Limited, and TradeKey.com|
|Key Market Opportunities||Growing Prevalence Of Technology Industry Helps To Grow B2B Ecommerce Market Share|