Online B2B retailing market at inflection point
Online business-to-business (B2B) retailing is at an inflection point and is going through major shifts in technology and business models.
This is according to market analyst firm Frost & Sullivan, which notes the B2B market will outgrow the business-to-consumer (B2C) market by 2025, with China taking the lead.
Frost & Sullivan points out the market is evolving due to shifts in the impact of mobility and role of digital channels.
Retailers, in order to cope up with the change in the market, need to incorporate a broader competitive view by prioritising mobile and omnichannel strategies by investing aggressively in the B2B customer experience, the firm says.
The top priority of B2B retailers is to create a unique and personalised experience in delivering services through innovation in technologies, it adds.
Frost & Sullivan's analysis, "Future of B2B Online Retailing", predicts online B2B transactions of manufacturers are expected to reach $3.68 trillion in key economies like the US, China, UK, Germany and Japan by 2025.
This will be driven predominantly by Web-only features like digital sales platforms, instant customer reach, cross-border accessibility, innovative fulfilment, and Web site compatibility (mobile and other platforms), Frost & Sullivan notes.
In addition, the study examines online sales in the manufacturing industry and classifies the B2B relationships and working models. It focuses on techniques needed to improve the efficiency of online operations as well as customer services to enhance future growth opportunities.
"The B2B e-commerce market is becoming more complex in the large online environment as speed of delivery and user experience emerge as critical factors," says Vidhya L Ved, Frost & Sullivan's Visionary Innovation Group research associate.
"In fact, use of innovative technology and personalised unique solutions are now key service differentiators. Companies must rethink their strategies and devise more agile models that leverage economies of scale while meeting customer demands."
From a regional perspective, the analyst firm says China will become the world leader in the B2B e-commerce market with $1.25 trillion in sales by 2025.
China's above average adoption can be attributed to overcoming hurdles associated with legacy technology and systems as well as the success of home-grown B2B marketplaces, such as Alibaba and JD.com, that have automated the process for many small and medium enterprises.
"B2B growth strategies clearly need to incorporate the innovations from business-to-consumer models into their Web sites to match increasing demands and expectations of business buyers," Ved says.
"The retail giants, like Alibaba and Amazon, are providing services such as enhancing the purchase journey through their cloud-based platforms, providing unique product differentiation through innovation, increasing product choices, and offering competitive prices. These strategies will continue to shape the future of B2B e-commerce."