B2B sales are expected to represent nearly 30% of the global market within the next three years, according to a study by Frost & Sullivan. Retailers need to get the ball rolling and make the most of the opportunities that this market offers them and their ecommerce activity.
While B2C ecommerce is now commonplace with an accessible buying process, the B2B ecommerce journey has been rife with challenges as the industry has struggled to occupy market share.This is the result of the slow digitalisation of B2B companies, the majority of whom are yet to begin their online sales journey. Despite this slow growth, the online B2B market boasts a promising future ahead, with several forecasters predicting that the online B2B market will be double the size of B2C ecommerce by 2020.
B2B buyers are accustomed to the ease and convenience of B2C ecommerce through their personal online shopping experiences. These buyers are therefore in search of a similar buying experience with simple navigation for their business needs. As it stands, many small businesses currently use B2C ecommerce sites for their business purchases. In fact, a study by Accenture revealed that nearly 50% of B2B buyers prefer to use the same platforms for both their business and personal transactions. The main difference between the two sectors lies in the buying decision process. B2B buyers swap their impulsive buying nature in favour of a more rational and scrupulous buying decision process that corresponds with the lengthy procedure involved with B2B transactions. This buying process involves several steps such as requests for quotation (RFQ), price negotiations and different payment terms. Forrester Research predicts that by the end of 2017, over 50% of buyers will carry out their B2B transactions online. These transactions are being accommodated by online B2B marketplaces.
A driving force for the sector, B2B marketplaces are the ideal platforms to bring together supply and demand while adapting to the constraints involved in the B2B market. They offer manufacturers, suppliers, distributors and exporters the opportunity to provide B2B buyers with the best offers.
Online marketplaces Alibaba and Amazon were the first platforms to open up their businesses to the B2B sector. Alibaba’s market share in Chinese B2B ecommerce represents over 40%, according to iResearch, while Amazon continues to stretch its global reach in the B2B market.
Since its 2015 launch in the US, the marketplace has continued to develop its Amazon Business platform throughout Europe. Last year, Germany was the first European country to benefit from the B2B platform, and earlier this year the US giant’s offer extended to Europe’s leading ecommerce market, the UK. The Amazon Business service in Germany boasts over 50,000 B2B buyers , however, we can expect to wait a few months before seeing how British demand compares. Amazon’s dual role as a B2C and B2B marketplace gives online retailers the possibility to adapt their catalogue for their target audience and get the most out of the wide reach that the marketplace offers. Other marketplaces, such as esources, tradekey, specialise only in B2B sales. If you want to go cross-border, Mercateo is Germany’s leading B2B marketplace. Meanwhile Cdiscount, France’s second biggest marketplace, recently followed in Amazon’s footsteps by launching Cdiscount Pro. To date, the B2B marketplace includes over 1.5 million products for B2B buyers.
In order to amass new sources of income, online retailers need to dip into the goldmine of the B2B market. Faced with an already mature and well developed B2C market, they are presented with the challenge of showcasing their product catalogue to a new audience of B2B buyers. Marketplaces serve as the optimal springboard for retailers to reach a new target of B2B buyers, who have different priorities to the individual shopper in regards to pricing, payment and delivery methods.
Frédéric Clement is CMO at LengowImage credits:
- Image courtesy of Lengow