B2B eCommerce Marketplaces
The B2B marketplace space is heating up. Just like consumer-focused eCommerce, the companies with the biggest opportunity in this space, are also the most likely to miss it.
Just last week, two major investments in B2B marketplaces have been announced. Firstly by Ratan Tata in India (Tata Group revenue $100+ billion). And second, by Germany’s Zalando (revenue $3 billion). Furthermore Forrester made a shocking estimate. By 2020, the US B2B eCommerce market is expected to be worth $1 trillion. This would be twice the size of the US business-to-consumer (B2C) eCommerce market (source).
The opportunity is to operate secure, easy to use B2B eCommerce marketplaces for wholesalers and retailers to buy and sell. Winning marketplaces are likely to be within certain verticals, like fashion, electronic parts, groceries and other any other business segment you can think of. There will be B2B marketplaces for coffee worldwide, and for fresh goods within a local area.
Just like consumer-focused eCommerce, the companies with the biggest opportunity in this space, are also the most likely to miss it.
As we saw over the past 15 years, many retailers have gone out of business because they could not compete with sites like Amazon, Asos, and brands that know how to combine both digital and physical like Zara.
I remember talking to a very successful businessman in 2008, with a turnover of 100s of millions, who pointed to his computer and said, ‘all this internet stuff, it really does nothing for me in the real world’.
There’s a lot of companies in the B2B space that still have this mindset. This is probably why B2B eCommerce is only becoming mainstream now, as the ‘born digital’ generation take on senior roles.
Things are going to switch in the next few years, fast. eCommerce and retail was a gradual thing with a natural balance point. Shopping is fun for a lot of people, including Prince Harry. 🙂 For a lot of products, it’s just more practical for people to go the store to choose, rather than order online and wait.
This is not the case with B2B. B2B eCommerce is going to be more like online banking. One minute everyone will be calling and emailing you orders, and waiting patiently, just like they used to queue in the bank. Within a few years, they will be placing orders online.
It’s already started
In Forrester’s recent survey of 406 B2B companies around the world, 97% of the respondents embrace some elements of eCommerce today. Yet on average, eCommerce sales account for only 35% of their sales mix – despite the fact that most of these companies said they hope to achieve a 50-50 balance between eCommerce and traditional direct and indirect sales channels. In other words, there’s a lot of room for growth, and as B2B eCommerce goes mainstream, now is the time to make sure you and your business are on the right side of the trend.
Here at iStockist, we power B2B eCommerce portals for companies. We also enable entrepreneurs and businesses to own and run online multi-vendor B2B marketplaces.