Will Emerging B2B Growth Eclipse That of B2C?
July 29, 2015
B2B: the New e-Commerce Sheriff in Town
Until now, the B2C industry has dominated the e-Commerce ecosystem showing tremendous growth. Forrester predicts that the B2C industry will continue to grow at an exponential rate with a heavy focus on customer acquisitions, retention and fulfilment in the future (Sucharita Mulpuru, 2014). Big Commerce predicts B2C e-Commerce to reach a whopping $2 trillion in 2015 across the globe, with $6 billion estimated to come from India’s e-Commerce alone (Gartner Symposium, 2014).
Like the B2C industry, the B2B ecosystem is a lucrative industry with e-Commerce sales expected to reach $12 trillion by 2020, according to Frost & Sullivan. E-Commerce has already become a digital conduit to the current B2B industry, expected to focus heavily on digital trends, customer portals, social media channels, shopping cart sites, etc. (Internet Retailer, 2014). Forbes observed that the B2B ecosystem has rapidly transitioned from cumbersome legacy systems involving the EDI, towards a more user-friendly, cost-efficient and interactive online platform where customers can talk to buyers from anywhere in the world. In other words, many B2B buyers are beginning to completely eliminate the need to have sales representatives (Forrester, 2015).
The past several years have seen the emergence of a B2C world, with e-Commerce predominantly focused on establishing compelling customer experiences for the B2C market, while B2B e-Commerce has taken a back seat. Today, however, the B2B businesses are beginning to invest substantially in re-platforming and rebuilding their B2B e-Commerce sites in order to stay ahead of the game (Forrester, Andy Hoar, et al; 2014). Research conducted by E-consultancy revealed that some B2B sites have already taken the plunge and are delivering exceptional B2C-like e-Commerce services to its B2B buyers. MSC Direct, Staples, Black Envelopes, Quill, Spring, Grainger, Screw Fix, Firerock, Amazon Supply, Fastenal etc. are just a few examples.
Considering the current B2B explosion, Forbes predicts that the “real money” is within the B2B market and that B2B e-Commerce will reach $6.7 trillion globally by 2020, with China emerging as a world leader in the industry (Frost & Sullivan, 2014). B2B e-Commerce has already doubled that of B2C with $559 billion in e-Commerce back in 2013 (Andy Hoar, 2012). Furthermore, according to Forrester, B2B is estimated to reach $1.1 trillion, constituting 12.1% of all the B2B sales in the US alone by 2020 (Refer the US B2B e-Commerce Forecast, 2015, Figure 1; Source - Forrester).
In a survey conducted by Forrester with Internet Retailer, out of 236 B2B buyers, approximately 75% said they prefer buying from an e-Commerce site rather than buying from a sales rep, and 93% B2B buyers said they prefer to buy online once they are sure what they want to buy.
Based on the insights and trends above, it appears that the B2B market is transforming into the “golden goose” and will outpace the B2C market in no time. The B2B market is becoming more customer-friendly and wants to be a distinctive one-stop shop where customers, vendors and suppliers can interact at any time. Since the customer relationship is long-term, the benefits of keeping them happy are going to be enormous.
Big e-Commerce mammoths such as Alibaba and Amazon have already raised the expectations of new entrants into the B2B space. Irrespective of the type of e-Commerce, it is critical to recognize the importance of implementing a robust customer experience, as it appears to be a major revenue generator in the B2B market. At present, although the B2B market is growing at a phenomenal rate and experiencing a radical change, it is still fragmented. B2B companies that ignore e-Commerce demand will soon become irrelevant in the market and eventually be eliminated from the e-Commerce ecosystem altogether.
B2C e-Commerce is no longer the big revenue generator. B2B businesses are elevating the bar and demanding B2C-like standards and shopping experiences for their technologically-savvy B2B buyers. Simply put, the B2B industry is clearly transitioning from a seller to a buyer-driven perspective with customer experience becoming a key focus in driving B2B e-Commerce in the future.