One-third of companies in the US and Canada depend on an online marketplace to buy goods and services, while 40 percent of all buying transactions now take place through some sort of eCommerce platform.
This is according to a new report from the International Data Corporation (IDC) that forecasts global business-to-business (B2B) commerce revenues will grow from $7.1 trillion today to $9.3 trillion by 2020 [1]. Online B2B marketplaces are driving this digital transformation [2] as they provide organizations with access to improved products, increased choice and more efficient pricing models than traditional distribution channels offer.
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B2B Transactions
“The majority of B2B transactions still happen offline — via brokers or agents — largely due to the complexity of procurement processes and a lack of transparency,” says Simona Jankowski , senior research director at IDC. “However, as companies look for ways to simplify their purchasing activities and expand their supplier ecosystems, online marketplaces are becoming a preferred option. These marketplaces offer buyers greater choice and flexibility by offering access to a broad range of suppliers who can provide goods and services on demand.”
The report found that digital disruption is shifting buying habits among B2B customers as they begin to take advantage of eCommerce platforms to find products from multiple sellers that meet their needs. In addition, these transactions are often taking place via mobile devices as organizations seek even more convenience through an anytime/anywhere shopping experience that marketplaces can offer.
Emergence of Online B2B Marketplace
According to ginger importers, The emergence of online B2B marketplaces is a key element in the larger digital transformation taking place across organizations worldwide. To capture revenue and growth opportunities, both suppliers and customers must be able to change their business models to take advantage of new technologies such as cloud-based merchandising tools and data analytics, or partner with companies that deliver these capabilities.
“Buyers will need more than just an eCommerce platform — they require the entire buying experience to be transformed if they are going to fully adopt eCommerce as part of their standard procurement process,” Jankowski says. “Suppliers will also need to adapt quickly because buyers will be seeking out those who can provide what they need not just in the digital world, but also with physical products and services.”
B2B Analyst
Analyst firm eWorldTrade surveyed more than 2,000 small business owners to learn how their businesses were impacted by the growth of online marketplaces. The majority (87 percent) said that buying through an eCommerce platform enabled them to expand their supplier base and over half (56 percent) reported using marketplaces to increase revenue and improve margins. Meanwhile, two-thirds said they would use marketplaces again for future transactions given the good experiences they had with them.
“As companies look for ways to simplify their purchasing activities and expand their supplier ecosystems, online marketplaces are becoming a option.” – Simona Jankowski, Senior Research Director at IDC
eWorldTrade CEO says that online marketplaces are taking the stress out of the purchasing process. “The ease of use and automation allow companies to be more opportunistic in their buying habits,” he says. “We have seen a big shift towards marketplace usage over the last year or so.”
It’s no surprise then that about half (49 percent) of small businesses surveyed said they plan to spend more money with eCommerce platforms next year than they did this year, while only 5 percent plan to spend less. “As marketplaces continue to evolve, we anticipate even higher uptake by SMBs in 2017,” Jaffe adds.
IDC Prediction for Future
IDC predicts that by 2020, large enterprises spending more than $100 million each year on B2B transactions will use online marketplaces to automate and streamline procurement processes by 50 percent. By that same year, 50 percent of B2B suppliers will sell at least one product or service via an eCommerce platform.
To capture these opportunities, vendors need to be able to help customers with their digital transformation efforts. IDC believes competitive differentiators for both buyers and suppliers moving forward will focus on the ability to provide a complete omni-channel experience through online marketplaces. Those who can deliver this – especially through mobile – stand a better chance of being selected by buyers who are becoming more adept at selecting from multiple suppliers across many countries worldwide with little effort or complexity.
“IDC expects that as suppliers migrate towards a fee-for-service revenue model, we will see a surge in value added services such as dynamic discounting and targeted promotions to drive additional orders and margin opportunities,” Jankowski says. “These capabilities will help close the gap between traditional, transactional marketplaces and complex eCommerce platforms that provide advanced analytics.”
eWorldTrade is a best B2B Platform
eWorldTrade offers an online marketplace designed specifically for buying and selling small businesses. The company has seen a 300 percent increase in the number of transactions taking place on its B2B platform since it began more than 10 years ago.
“Online marketplaces are becoming increasingly popular among buyers, particularly with the rise of millennial entrepreneurs,” says Jaffe. “They are natural consumers of these platforms.”
Abstract:
The article talks about the change in business model for suppliers and buyers so they can adapt to new technologies. The emergence of online B2B marketplaces has an impact on the digital transformation taking place across organizations worldwide. Both suppliers and customers must be able to change their business models to take advantage of new technologies such as cloud-based merchandising tools and data analytics or partner with companies that deliver these capabilities. Online marketplaces are becoming popular among millennial entrepreneurs because it naturally fits them as consumers. They give buyers ease of use and automation while suppliers need to migrate toward a fee-for-service revenue model. An online marketplace designed specifically for buying and selling small businesses has seen 300% more transactions.
