The global B2B e-commerce market is said to be growing at an unbelievable speed, valuing 12.2 billion US $ in just 2019. According to experts, this thriving business-to-business sector will be worth 5.2 trillion US $ by 2020. With more online platforms available and easy access to technology, companies are sidelining their traditional ways of operating businesses.
Earlier in time, most B2B transactions were carried out using offline marketing strategies where trade shows, conferences, B2B exhibitions and offline advertisements played the part of connecting businesses from all over the world. These techniques, however, are still in practice but have been overtaken by most digital strategies around. A report suggests that almost 80% of businesses nowadays use digital platforms and trade sites to explore their business potential and compete alongside other competitors.
GLOBAL B2B E-COMMERCE SPACE
B2B companies operative in the global e-commerce space follow two different models to carry out their businesses. Firstly, the direct model, which involves companies establishing their own platforms and selling directly to their potential buyers. This usually happens when B2B companies set up their websites or social media to both promote and sell their services to the buyer. The second model, a marketplace, is a type of a digital platform that registers a large number of B2B companies who sell their products, connect with buyers alongside their rivals. The China B2B Marketplace is known to be the largest e-commerce spaces providing tons of opportunities and eyeing attention of buyers, sellers and businesspersons from all over the world.
The B2B marketplace is now twice of what it had been predicted years ago. Surprisingly, it has also surpassed the much common B2C business-to-consumer marketplace, which had ruled the e-commerce industry for a long time. Companies now are more aware and inclined to increasing efficiencies and generating sales. One of the reasons why they are slowly ditching old systems by switching to digital platforms. Overall, when combining both B2B and B2C trading into account, the online retail and trade will jump to a massive 25 trillion US $ in five years. That is an all-time high! The major contributors will include the U.S, UK and China B2B Platforms that incur the most B2B transactions.
THE EFFECT OF DIGITAL PLATFORMS
The Global B2B marketplace is powered largely by technology. It started with websites, internet advertisements, social media and email marketing. Now, mobile technologies have boosted the B2B online sector even more. Trade sites, mobile apps and websites are all powered on smartphones and tablets that have made access easier, faster and within reach. With the widespread availability and affordability of technology platforms, cloud services and smart devices, companies are finding it convenient to switch to and make the transition.
The B2B marketplace globally is driven by major companies that contribute heavily to the world economy and to the e-commerce sector itself. They include Amazon, Rakuten, Mercateo, Global Sources, Alibaba, Walmart and IndiaMART. These not only operate locally but also have headquarters in major parts of the world. Just like Amazon, with its 22 headquarter has a B2B operations network that accounts to 1 billion$ every year. Besides that, Alibaba, in addition to contributing 30% in China B2B trade sites, is now expanding to India, U.S and Europe for further exposure.
These B2B marketplaces use technology to elevate their business platforms and attract more B2B customers. Other than facilitating cloud platforms, they use big data to personalize the customer experience. They analyse customers’ patterns of visiting trade sites and their demographic data to connect them with potential B2B suppliers or buyers of the industry they are looking for. Big data plays an important role in recommending customers what products to buy, what industries to invest in to and which potential B2B business will be beneficial in doing business with, based on their data and interests. Technology also lets companies directly deal with interested B2B buyers, even in a marketplace, without having the need to involve any intermediaries or using any human resource. For buyers who are miles apart, technology provides a great way to connect to them through video conferences, free calls and remote business meetings. Hence, the global B2B market is much better and commercial with technology.