THE B2B MARKETPLACE – HERE TO STAY
In recent years, the growth and mushrooming of B2B marketplaces has been nothing short of extraordinary.
Even today, an often-asked question is – what is a B2B marketplace?
In simple terms, a B2B marketplace is an online platform that connects businesses and buyers with suppliers, an online platform where buyers and sellers can interact. These platforms typically offer a wide range of products and services, from raw materials to finished goods to services, and can be used by businesses of all sizes, across various industries, various geographies and time zones.
Some marketplaces prefer the width model where several products, categories and segments are offered. And some prefer to go the more dedicated depth route, where focus is on fewer and more specific areas of expertise. Both have their own pros and cons.
For sellers, B2B marketplaces provide access to a larger pool of potential customers. This can help them to increase their sales and expand their customer base. B2B marketplaces also provide sellers with tools to manage their online presence, such as product catalogs, pricing information, and customer reviews. This can help them to improve their visibility and credibility and to attract even more customers. Good B2B marketplaces also train buyers and sellers to seamlessly adapt to usage of the platform.
B2B marketplaces increase competition among suppliers. They allow buyers to compare prices and quality from multiple suppliers, which puts pressure on suppliers to offer better products and services at competitive prices. Suppliers can actually use platforms to offload excess, unsold or overaged inventories. B2B marketplaces also allow potential buyers to put in their specific requests and ask-pricing.
B2B marketplaces are changing the way that businesses interact with each other. They are creating new opportunities for collaboration and partnerships, as businesses can connect with each other more easily and quickly. This can help businesses to innovate, improve their products and services, and enter new markets.
Traditionally, B2B transactions involve a lot of manual processes, such as sending invoices, negotiating prices, handling payments, working out modalities of shipments and documentation etc. However, with the advent of B2B marketplaces, these processes are automated to a great extent, resulting in faster transactions and reduced overhead costs.
B2B marketplaces are playing a critical role in shaping the future of B2B eCommerce. As businesses increasingly shift their operations online, B2B marketplaces offer an efficient and convenient way for businesses to connect with suppliers, source products, and manage their procurement processes.
Undoubtedly, the current phase is going to be remembered as a phase when investors have returned into their shells, and, of course, everything that has happened as a result – layoffs, shutdowns, and consolidations.
For ecommerce, however, it has been a transitional year – one which has re-emphasized the importance of having strong business fundamentals, brand differentiation and a clear and achievable path to profitability.
As investor funding has declined for the time being, many ecommerce players have woken up and realized that they have been walking on a tightrope by depending on external funding or runways, which have in turn forced them to cut costs. While on one side, customer acquisition costs continue to remain very high, on the other side companies continue to reduce staff. An important point to be noted is that while thousands of jobs are being cut, those who are losing their jobs are also someone’s potential customers who are being sidelined. This merry-go-round conundrum will need to be thought out better.
According to industry experts, 2023 will continue to witness innovation in marketing and customer experience. Overall, ecommerce businesses will look to adopt sustainable growth strategies instead of growth at all costs.
With the advent of more and more such platforms and business models, all of whom claim to be in it for the long term, an overriding factor that is visible is the need for immediate returns. Funding cycles are driving marketing communication with immediate sales being the only metric.
The key purpose of business is to create a customer, keep a customer and grow a customer. In this day and age, to get a first time buy is relatively easy. Platforms would also need to be built as brands, helping to create a differentiator over time.
We all need to accept that while technology aids and helps to “redefine”, over time any such model is duplicatable, and over time, besides price, it is the emotional value of the platform as a brand that will make long term differentiation.
The B2B marketplace is coming of age. And whether we adapt to it fast or slow – it is here to stay.
(The author is Mr. GIDWANI, CONSULTANT DIRECTOR | MEMBER UAE SUPERBRANDS COUNCIL | CHARTER MEMBER TIE DUBAI | HBR ADVISORY COUNCIL, and the views expressed in this article are his own)