E-Commerce B2B : the Competitive Challenges of 2024

B2B e-commerce: What is it? What actors make up this market? As B2B e-commerce increasingly adopts the codes of B2C e-commerce, significant challenges lie ahead in this inter-company commercial exchange market. What growth strategies will actors pursue to stay in the game?

We often hear about B2C e-commerce with well-known brands such as Fnac, Zara, or Amazon. But what about online transactions between businesses (B2B)?

Definition of B2B e-commerce

B2B, or Business to Business, refers to all commercial activities between two or more businesses 🤝, whether for the sale of services or products.

The main sectors engaging in inter-business commerce include:

• Manufacturers,
• Wholesalers,
• Distributors,
• Companies offering Software as a Service (SaaS).

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In general, companies that choose to operate on a B2B model, do so because of the following inherent characteristics of this market:

• The purchasing process is thoughtful and budgeted within a company,
• The purchase volume is generally higher,
• There are customization opportunities.

This allows for the building of strong trust relationships with buyers.

A large portion of inter-company transactions and purchasing processes go through digital channels.

B2B e-commerce increasingly adopts the codes of B2C e-commerce

We observe that B2B e-commerce is increasingly adopting the codes of B2C e-commerce. This is not surprising, considering the growing consumer demands on the internet.

B2B (Business to Business) commerce is becoming more and more similar to B2C (Business to Consumer) by adopting key elements of the latter category. B2B companies seek to personalize the purchasing experience by simplifying ordering processes and offering flexible payment options.

Moreover, they also invest in user-friendly applications and websites with content-rich online catalogs and product rating systems ⭐️⭐️⭐️⭐️.

Social media and content-focused marketing are increasingly used to enhance customer engagement, to inform and to educate.

The mobile experience is also optimized for increased accessibility.

All these trends aim to meet the changing needs of professional customers and improve their online shopping experience.

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Challenges for B2B e-commerce companies

The competitive landscape in the B2B e-commerce sector is currently disrupted by several significant factors. Firstly, there are increasingly significant regulatory pressures on B2B marketplaces. Regulatory authorities seek to impose stricter standards 🔒 in the following areas of the B2B environment:

• Data protection,
• Transaction security,
• Consumer rights compliance.

These regulations aim to ensure fair competition and protect companies against unfair commercial practices.

Furthermore, new players are entering the market, generating innovation but also competition. Startups and technology companies are using digitization to create more efficient solutions, including specialized B2B platforms, purchasing automation tools and supply chain management systems. These players disrupt traditional models 🤔 by offering more agile alternatives better suited to business needs.

Finally, traditional wholesalers are faced with the need to adapt to the evolution of B2B e-commerce. Consequently, they seek to modernize their operations by digitizing their processes, offering more comprehensive online catalogs and improving their customer service. However, they also face competition from B2B marketplaces and new technology players, making the competitive landscape even more complex.

Here are some examples of new entrants in the B2B e-commerce market:

1. Alibaba: a Chinese platform that revolutionized B2B e-commerce by connecting manufacturers worldwide.

2. C2FO: a reverse factoring platform that optimizes cash flow management for B2B companies.

3. Grainger: an industrial equipment supplier with a robust online presence for B2B purchases.

4. Xometry: an online platform for custom manufacturing, connecting companies to machining and 3D printing suppliers.

5. TradeGecko: an online supply chain management and inventory solution for B2B companies.

These new entrants have disrupted the B2B sector by introducing innovative technologies and business models.

Overall, the competitive landscape in B2B e-commerce is evolving rapidly in response to these external factors, forcing companies to adapt to new market realities and rethink their strategies to remain competitive.

Growth strategies 📈 implemented by wholesalers and distributors

In the competitive wholesale distribution sector, innovation and adaptation are crucial for driving growth. Distributors and wholesalers consider several strategies to evolve and thrive in the modern business environment.

Omni-channel distribution model: To meet the needs of today’s connected consumers, wholesalers are adopting an omni-channel distribution model. This involves redesigning the information system (IS) for seamless integration of different sales platforms, optimizing the logistics network for efficiency and adopting a customer-centric approach to offer a personalized and seamless shopping experience.

Launch and deployment of marketplaces: Creating a marketplace allows for expanding the product catalog and diversifying pricing positioning. This opens the door to new revenue sources, as illustrated by the “Aniel Marketplace” in the auto parts sector, which offers an extensive range of products to consumers.

Enhancement of digital services: By developing service intermediation platforms and digitalization support tools, wholesalers can strengthen their value proposition. For example, Metro develops digitalization services for restaurateurs👩🏽‍🍳, facilitating their transition to more digital and efficient operations.

Rising importance of CSR strategies: Companies are increasingly called upon to make their practices more responsible. For distributors, this translates into reducing the environmental impact of logistics and transportation and transitioning to a circular economy. For example, managing electronic product recycling ♻️ by companies like Manutan demonstrates a commitment to sustainability and social responsibility.

By integrating these strategies, wholesalers and distributors can not only meet changing market expectations but also play a leadership role in adopting innovative and responsible business practices.

In conclusion, the B2B e-commerce sector is at a significant turning point in 2024, marked by the progressive integration of best practices from B2C and constant technological innovation.

The following quote by Peter Drucker, a pioneer of modern management philosophy, summarizes the current dynamics of the sector quite well:

“The best way to predict the future is to create it.”

Those in the B2B e-commerce field who take this idea to heart, by innovating and actively reshaping the market, are the ones who will set the standards for tomorrow’s commerce.

References:

Xerfi Canal B2B E-commerce: A disrupted competitive game, Philippe Gattet, Director and Xerfi expert. “