B2B E-Commerce Poised For A Big Leap
The B2B e-commerce marketplace is increasingly getting crowded with big and mid-sized players. Research and analyst company Forrester, in its first-ever five-year B2B e-commerce forecast stated that “B2B eCommerce sales will top $1 trillion by 2020 and account for 12% of all B2B sales”. This represents an 8% compound annual growth rate over the next five years, with B2B sales reaching $780 billion by the end of this year, it said.
The growth is driving B2B companies to leverage e-commerce tools and techniques in order to have better reach, sales and customer experience—all while boosting their operating efficiency and growth prospects.
According to an eMarketer report, global retail sales are expected to rise between 2015 and 2019 but at a slower pace. The burgeoning consumer economies in China, India, and Indonesia will drive retail sales over the next four years as disposable incomes in the countries continue to rise. Whereas eMarketer projects annual retail growth of about 3.3% in North America through 2019, while growth in Western Europe will remain relatively flat at around 1.0% annually through the end of the forecast. And also, total retail sales in the Middle East and Africa will hit $864 billion in 2015, up 20.9% from the previous year. eMarketer predicts double-digit retail sales growth in the region through at least 2019.
In the recent report by The Hindu BusinessLine, Amazon.com Inc’s business marketplace, which connects businesses with suppliers, has generated $1 billion in sales in its first year, making it a significant player in a fragmented industry worth more than $8.2 trillion in the US.
Likewise, cloudBuy is stepping into B2B business and announced that CII (Confederation of Indian Industry), India’s largest Industry Association has opened www.CIITrade.in, a B2B e-commerce platform, which will enable its members and other businesses to trade online. CIITrade.in brings together B2B buyers and sellers on a common platform to trade domestically in India as well as globally.
What’s driving this incredible growth?
Today, 74% of B2B buyers research at least one-half of their work purchases online. Combine this shifting behavior with the cost savings gained by moving to a self-serve eCommerce environment, and thus, Forrester begins to see why a significant volume of offline business will move online in the next few years.
“B2B buyers are now expecting B2C-like customer experiences online, and they’re growing increasingly impatient with B2B sellers that don’t provide it,” writes Forrester in the new forecast. B2B firms must build their digital savvy and fast — or else risk losing market share to the online competition.
On the other hand, Archana Vidyasekar, senior research analyst at Frost & Sullivan’s Visionary Research Group, which conducted the study “ B2B e-commerce will hit $12 trillion in sales worldwide by 2020, up from $5.5 trillion in 2012”, says there are multiple reasons why B2B e-commerce tops their list. And they’re all tied to increasing pressure on companies to sell online to other companies.
The main driver for migration to B2B is the pressure from industry leaders to move to online platforms,” she said. That pressure comes in multiple forms, she adds, including an expectation among a growing number of companies to conduct buying and selling online; a shift from some companies to conduct procurement transactions through the Internet instead of through electronic data interchange, or EDI; growing interest of companies in placing orders through mobile commerce devices; and the increasing popularity of e-marketplaces such as Alibaba.com and AmazonSupply.com.
What are the challenges B2B business owners may face?
From complex sales channels to multiple product lines, B2B business owners are often faced with challenges that retailers aren’t often burdened with. According to Apps e-Connect, the challenges lies, firstly there is no personal contacts, secondly, the mode of payment is very slow and thirdly number of decision makers. B2B have to put up with many hurdles for a consistent fight with the challenges on the e-commerce platform. Today in the convergence era, it can be assumed that B2B do have a hunger for online trading.
Additional issues, which plague B2B and B2C businesses alike, include a lack of marketing and ecommerce development skills. No matter the business or the industry, however, there’s no mandate to tackle everything in-house. Many of the most successful online stores got to where they are today by working with outside contractors to implement cutting-edge technologies and marketing campaigns.
Source : Digital River Research On ‘Conquering the B2B Ecommerce challenge‘
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