The coronavirus pandemic has impacted the B2B eCommerce market drastically. In this blog, we will cover the trends that have emerged in B2B e-commerce due to the pandemic:
Small Manufacturers come Online
Due to the pandemic, it is difficult for small businesses to provide their services and products in old ways. Because of the lockdown, they were faced with two options- either leave the market or adjust to the new ways. Manufacturers have joined the marketplaces such as ShopZio, and they have seen a huge rise in the number of Vendors in April 2020. On-demand delivery apps have seen a huge rise in the pandemic.
Large Manufacturers Creating Their Own Marketplaces
Although Amazon and other such sites reacted quickly to help manufacturers quickly react to the changing scenarios, more and more manufacturers are creating their own marketplaces. It is hard to stand out on Alibaba and Amazon; manufacturers don’t want to be a part of the crowd; instead, they want to show their uniqueness.
New Payment Platforms
Due to the pandemic, the purchasing power of people has reduced. The pandemic has negatively affected the revenue; that’s why new payment platforms have emerged that let businesses to pay in installments. One example is a platform introduced by MSTS Inc. It is a credit-as-a-service platform. Also, Alibaba offers payment terms, in which businesses in the US can pay for their orders within 60 months of receiving an invoice. There is no interest or fees on this service. With innovative payment systems, B2B marketplaces can attract new business players.
The the world revolves around digital solutions. Many B2B businesses make purchases remotely. As per a report from McKinsey, only 30% of B2B eCommerce buyers want to talk to sales representatives in person. More than 88% of B2B decision-makers wish to stick to the digital sales model for at least the next 12 months. It is one of the major reasons that contribute to the demand for online B2B marketplaces.
Dynamic pricing, also called demand pricing, is a pricing strategy in which businesses set the price of products based on the current market demands; it is flexible. If some items have low stock, the vendors can increase their prices, and if the demand for particular items is low, vendors can decrease their prices. Dynamic pricing is a great way to protect oneself from losses because of market changes and can benefit from those changes.
Before COVID-19, the buyer-seller interactions would mean many rounds of negotiations. But now, we see marketplaces requested a quote from the vendors. Price negotiations build customer loyalty.
There is a great focus on high-quality end-to-end service; on-demand apps make it possible. B2B buyers prefer self-service channels that allow them to evaluate, research, order, and reorder without any problem. To satisfy customers, high-quality service is a prerequisite. Since customers get exceptional service in B2C, they expect the same from B2B, if not more. Alibaba cooperates with Freightos to enable a smooth experience for buyers. It helps buyers to book, manage, arrange bulk shipments, and track shipment.
As per McKinsey, B2B decision-makers like to choose suppliers who provide exceptional digital performance. They don’t go for only “fair” performance; they want something outstanding.
It is difficult for vendors and marketplaces to provide exceptional services on three aspects- transparency, speed, and expertise. It is a must for B2B marketplaces to provide buyers an array of shipping options to choose from, a comprehensive search, and a smooth checkout process. These are needed at every step of the buyer journey. A live messaging feature is a great way to provide buyers with all three requirements- a quick response, transparent communication, and validating the expertise of a vendor.
It is important to pay attention to buyers’ pain points to increase their loyalty. The major issues that buyers face on B2B marketplaces are tiresome ordering processers, technical glitches, and difficult search functionality. In B2B businesses, it is important to keep providing the best services to buyers to stand out from the rest.
Larger Order Sizes
Earlier, B2B buyers were afraid of purchasing a large number of costly products online. A survey conducted by Mckinsey depicts that 15% of respondents wish to spend more than 1 million dollars on B2B purchases, and 12% are ready to spend between half a million to a million dollars, whereas 32% are ready to pay between $50,000 and $500,000. It is a positive sign that businesses are ready to order and spend; it opens new possibilities for vendors to join the marketplaces and increase revenue.
Governments making use of Marketplaces
Governments are turning to online B2B marketplaces. In June 2020, we saw a pilot program in which the US General Services Administration (GSA) signed contracts with Thermo Fisher Scientific, Amazon Business, and Overstock.com. As per these contracts, GSA will order a wide range of products such as furniture, laboratory supplies, office supplies, etc. If everything goes well and the government is satisfied, the GSA will make government procurements of up to $6 billion a year through eCommerce marketplaces. It will encourage governments around the world to cooperate with B2B marketplaces.
Mobile phones have become an indispensable part of our lives. During the pandemic, there was a 250% increase in mobile app orders on the B2B market. Also, there is a huge rise of 30% of people who like to order through mobile apps compared to the pre-pandemic period. Mobile devices play a huge role for buyers in deciding which supplier to contact and what marketplace to buy from. A mobile application is a must if you wish to stand out from the rest. On-demand mobile apps have been hugely popular.
These are some of the trends that are going to stay, and you should use them well to ensure your business growth.