How B2B E-Commerce Platforms Are Disrupting The Market
Before getting into e-commerce and its B2B counterpart, perhaps it would be pertinent to see what actually constitutes `disruptions' a much-used and sometimes loosely used, term today.
To me, every small innovation in the digital space (plenty of them happening every second) is not a disruption. A `disruption', in the truest sense, happens slowly, over a period of time. It may not always be the best innovation. In fact, the activities that may add up to the final disruption may not even attract enough eyeballs when first introduced, but grows on you, slowly replacing conventional methods through assured long-term gains usually simple ones like much-needed transparency.
That said, the industry of e-commerce, and most certainly B2B e-commerce, has seen some unprecedented disruptions in the last two decades some of which have transformed forever the supply chains of some crucial, economy-defining sectors and industries. These are mostly digital platforms, which are now increasingly transforming into wholesome electronic marketplace experiences much in the same way as B2C.
One of the ways they could ensure this is by letting go of the nomination route completely and sticking to open tenders on the basis of fair competition and equity for government contracts
So How Is This Happening? Which Industries Are Adopting It? And How Fast Is It Happening?
Being a founding member of one of the front runners of the B2B e-commerce industry in India, I have seen the industry innovate, evolve and grow every single day in the last two decades. The journey has been exciting and full of learnings. Today, it is a burgeoning space. Every day, there are new entrants spanning a diverse spectrum. In its newest avatar, B2B e-commerce is all about comprehensive marketplaces, facilitating both upstream and downstream supply chain. So the industries embracing this are diverse both in public and private sectors. In fact, government procurement is an area that is opening up new opportunities and possibilities every day the scope and expanse of that is truly limitless.
Like any commerce, B2B commerce also essentially has two sides buying and selling. And that remains the same in its electronic version with one huge, transforming element the absence of any intermediaries. On the buy side, a large buyer can connect with the smallest vendor and buy what he needs at a market-determined best price. On the sell side, a large seller can connect with the smallest buyer and sell his products at a market-determined best price. All value additions valuation, inspection, payments, logistics, data analysis are centred around this basic activity of buying and selling without any intermediaries.
What is the main driver? Undoubtedly transparency, efficiency and convenience. And what is it driving on? Undoubtedly digitisationand technology intervention, which lies at the very core and forms the foundation.
The traditional business set-up is being replaced with digital process and tools to create and enable disruptions both in traditional sales channels and geographical segmentation. If Amazon is selling everything from toothpaste to television, B2B channels are helping to buy or sell everything from fasteners to furniture. The range is mind boggling - from idle power plants, industrial scrap, tools, foodgrains and pulses, to telecom spectrum and even media rights for big-ticket sports events. Core industries like steel, coal, power, automobiles to very traditional sectors like tea are all embracing the e-commerce route.
With such high adoption, needless to say, technological advancements are facilitating value additions to B2B e-commerce at a scorching pace. Artificial Intelligence, Machine Learning, Chatbots, Big Data, Robotics Process Automation, Cloud Computing, Drones, and IoT are changing the face of business facilitating digital enablement of lead collection, lead conversion, billing and payment automation, online marketing, analysis of sales data and on-Cloud hosting.
Many B2B e-commerce players are opting for Software as a Service (SaaS) - a software distribution model in which a Cloud provider hosts applications and makes them available to end users over the Internet. SaaS is one of the three main categories of Cloud Computing, alongside Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). For example, an e-procurement product with some in built features, developed by a B2B e-commerce company, can be hosted on the Cloud as a product, which organisations can deploy on a pay-to-use basis.
The entire value chain is infused with efficiency as it provides a wholesome market experience. Thus, the actual platform which we see is a conglomeration of associated services inspection of quality parameters of the services offered by associated partners, optimum capacity utilisation of the associated partners, digitising the product catalogue, standardising offered services across partners and geographies, tracking and monitoring movement of material and delivery of service are a few examples of the services offered.
Like every business, B2B e-commerce also has its own unique features and key drivers some of them being trust in the platform, large and verified choices with no geographical boundaries, dependable supplies, lifting of material, and efficient and error-free execution. Companies have been quick on the uptake and some reports say that globally, the B2B e-commerce space is growing at a pace that is double of its B2C counterpart. The global B2B e-commerce market size was valued at $6.64 trillion in 2020 and is expected to expand at a CAGR of 18.7 percent from 2021 to 2028, as per some reports.
In the last few years, e-commerce in India has received a great fillip from the policies announced by the Government to promote digital growth. Thus the Indian e-commerce industry has been on an upward growth trajectory, though like other sectors it has been hit hard by the second Covidwave. However, the scenario is slightly different in B2B e-commerce. We are seeing more and more B2B platforms and e-commerce marketplaces now, as traditional retailers and shop owners are increasingly looking to go online during the second wave. Amid the pandemic, B2B organisations are solving business challenges for small players and helping them to continue their business.
Talking specifically of the India scenario, continued government focus and policies will continue to play a key role in helping the B2B e-commerce segment reach its full potential. One of the ways they could ensure this is by letting go of the nomination route completely and sticking to open tenders on the basis of fair competition and equity for government contracts. With many competent organisations in the fray, open tenders will ensure that the best possible service provider, both technically and financially, gets the opportunity to make a real difference.