B2B marketplace to accelerate in India

by Sohini Bagchi    Apr 29, 2013

B2B marketplaceThe Indian e-commerce landscape has been dominated by B2C companies until now. While B2C will continue to grow in the coming years, experts believe that digital commerce can be a complete success when enterprises start to explore the B2B e-commerce trend as well.  In the past, e-commerce in the country was faced with challenges such as lack of a streamlined delivery system, bureaucracy at different levels and low internet penetration. These were the factors haunting specifically the B2B segment where trust also plays a prominent role. However, the B2B marketplace has shown a lot of traction in recent months with a number of companies planning to popularize this model. 

The coming of B2B

A recent Forrester study estimates the B2B e-commerce trend has already revolutionized the way business is conducted in the developed countries and the trend will pick up in India over the next 1-2 years. As per a 2012 US Department of Commerce report, B2B commerce in the US was measured at $3.7 trillion, which is a large number. “Like B2C, many B2B organizations are establishing an online channel and they are now focusing on how to grow this channel to maximize revenue. The trend in fact is driven by an increasing focus on customer experience,” says the Forrester study.  According to research firm, globally 62 per cent of B2B respondents have a customer experience program in place and 57 per cent said that customer acquisition is a top success metric.

In India, B2C e-commerce is currently pegged at $14 Billion and is expected to grow 4-5 times in the next 10 years. “Although the concept is still emerging in India, looking at the Western market, it can be said that going forward B2B is the clear success formula for the Indian e-commerce industry,” says Gaurav Issar, Co-Founder of JewelsNext.

Experts believe that the B2B e-commerce can certainly be successful in India because of the vital role B2C has been playing in the past few years. Likewise, many believe that the B2B e-commerce model is backed by the prior establishment of a strong B2C market. In an emerging market like India, business buyers may be resistant towards using e-commerce mainly due to factors such as trust and skepticism, and often times a lack of innovation mindset. However, with B2C e-commerce reaching its peak, there is an increased level of interest that is growing around B2B transactions.

Creating a competitive edge

E-commerce specialist Kevin Randall, believes that Brands matter in B2B markets. He writes in his blog: “The growth of the Internet and e-marketplaces along with accelerating technological product obsolescence has resulted in a hyper-informed and commoditized B2B marketplace as a lot of trust factor goes into buying and selling.”

For example mjunction, a joint venture between SAIL and Tata Steel that promotes e-commerce activities in steel, could become an instant success because its promoters had thier existing brand reputation. However, Viresh Oberoi, Founder CEO and MD of mjunction Services Limited believes that even though brand matters in B2B, companies practicing this model should also create a competitive edge.For instance, our flexible business development model distinguishes us from our competitors - who mostly focus on fulfilling very high targets,” he says adding that from the beginning, our company has been flexible in its approach. We carefully listen to our customers, identify their pain points and redesign the processes to solve those areas. We were able to deliver greater results in terms of transparency and efficiency, lower costs right from inception, as that is one area where many B2B platforms falter. As a result, our clients always enjoyed our services and entrusted us with larger volumes.

A shift in technology, attitude

The growth of web and mobile apps is likely to increase the importance of B2B commerce, especially as a way for companies to boost sales and marketing efforts. The other driver is the increased popularity of B2C model that is changing customer expectations in retail. Issar believes that today’s business professionals are gradually adopting e-commerce – purchasing electronic goods, gadgets and movie tickets through B2C model. With the advent of internet and mobile, they are showing a shift in their attitude and increasingly showing a preference in B2B buying and selling. Personalization, online catalogs and SEO continue to be the top three trust factors also used in B2C that are influencing B2B adoption.


However, complexity remains a challenge with those dealing with product, pricing, channel and back-end issues. There is a clear need for B2B players to better engage with the direct sales team when building online channels to help overcome channel conflict believe experts.  If channel conflict is addressed, sales from the online channel have potential to go much higher.  

According to a recent Boston Consulting Group (BCG) report, with digital influence, currently affecting $30 billion of urban consumer spending, is expected to touch $150 billion over the next four years, the coming year will see more interesting trends and innovations in the Indian e-commerce space - both B2B and B2C - as the market continues to mature.

What finally leads to a successful B2B entrepreneurship is an understanding of strategic goals and customizing your products accordingly, besides segmenting customers based on their needs to ensure an appropriate proposition to each segment, says Oberoi. He believes that it is also important to encourage dialogue with your customers – listen and act. Finally like every business model, you need to measure and monitor your B2B model and use it strategically alongside your B2C business model to achieve optimum gain.