The growth rate of B2B e-commerce has been simply astonishing over the last decade, often surpassing 20% per year.
The compound annual growth rate expected by 2027 is higher than 8%. In other words, the future is quite sunny, when it comes to B2B e-commerce. Here is a closer look at what is expected to happen and how marketplaces will play an important part in the overall results.
What is B2B e-commerce?
We most often read about B2C e-commerce, which refers to companies selling to consumers, online. B2B is when businesses are selling products and services to other companies. Normally, it is about larger companies providing smaller ones with what they need. B2B marketplace has become an important part of B2B e-commerce these days, thanks to the fact that the technology that is available now is facilitating greatly these kinds of transactions. Although the concept seems obvious (a great number of companies offering their products and services to other companies on one platform), it is actually quite difficult to reproduce in real “online” life. But some companies have specialised into creating these environments, which is why there will be more and more B2B marketplaces opening their doors, on the internet, in the years to come, and taking up a good share of the e-commerce that will take place between businesses.
What explains the growth of B2B e-commerce?
The first factor that influences the growth of B2B e-commerce is the simple fact that most of us, individually, have been increasingly using the internet, to do our shopping. This influences us as well at the office, in the way that we are looking to buy from other companies. This simple fact explains in great part why B2B e-commerce has been growing exponentially, throughout the latter years.
The second element that we need to take in account, is the fact that there are more and more products and services made available online, for companies to choose from. It makes the process easier, as buyers tend to find what they want, without ever having to actually talk to representatives of companies offering the products and services that they are looking for.
The Importance of B2B Marketplaces in B2B e-commerce
If you are looking for a number, in order to understand the position that B2B marketplace has in B2B e-commerce, look no farther than its growth from 2020 to 2021. It augmented by 130%, reaching $56 billion in the latter year. In fact, it was the largest growing segment of B2B e-commerce in that year, and no data is showing a potential slowdown in the near future.
The main reason that explains such growth and the position that it is currently taking in the industry, is that marketplaces are beneficial to both buyers and sellers. When it comes to acquiring products, buyers want to be able to turn their experience of personal shoppers into their professional world. They believe in the process of finding what they are looking for online, on main platforms, and so, they look to do the same at work. As for sellers, they know that they can thrive in a world where they can position their products and services on sites that already benefits from large visibility. In fact, they especially appreciate the idea that they don’t have to handle the marketing part anymore, or at least not for each client that they want to acquire in the future. They can simply concentrate their efforts into creating a great image on these marketplaces, in order to gain ground on their competitors.
What are the Difficulties for Companies that choose B2B Marketplaces?
Deciding on placing products and services on a marketplace has a cost. And so, if a business chooses to be featured on ten, twenty, fifty of them, it will have to be able to face these costs. They include warehouse fees, advertising costs and shipping products to various countries, to name only a few.
The second problem is more profound, but will be solved in a matter of a year or two. In order to become the best at selling on such platforms, you need to rethink everything you thought you know about selling. Marketing on these sites is very different than selling to your clients directly. Visibility and image become your priorities. Knowing when and how to update your prices, products and services, is another element of the game that sellers have to learn, in order to remain competitive.
B2B e-commerce is bound to have the same growth as the one that happened in B2C. Those who manage to get on top early, shall be the leaders of the future, the likes of Amazon and eBay.