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How to tap into the quiet rise of B2B E-commerce

Business · 8 min read

Commerce Trends: B2B e-commerce

Your business might only sell directly to end consumers, but should you be considering an expansion into the B2B sector? If recent trends are anything to go by, then the answer is a loud 'yes' – here’s why…

What do you think of when you hear the phrase 'e-commerce'? You might think of Amazon, books, clothing and electronics. But you’ll almost certainly be thinking of B2C. We all think of B2C e-commerce as The Big Thing but in reality, it’s dwarfed by B2B e-commerce. Yes – believe it or not, businesses selling stuff to businesses online is more than three times the size of what the average person views as being ‘e-commerce’.

The numbers speak for themselves: the B2C e-commerce industry was valued at US$2.8 trillion in 2018, while its B2B cousin posted US$12 trillion.

What does B2B e-commerce look like?

Good question. At first glance, it sounds like an easy question to answer. B2B e-commerce is probably standard office supplies and consumables – coffee, stationery, loo rolls, etc. – but it’s a lot more than that. Examples of B2B e-commerce include:

GE Electrical Grid SolutionsManufacturing giant GE sells power grid hardware through its online store.

Boeing Modification MarketplaceEssentially a pimp-my-plane platform for existing Boeing customers which is part of Boeing’s long line of e-commerce initiatives. Like PART page, which now processes more than 70,000 transactions each day.

RS ComponentsRS sells electronic components to trade via its website, offering around 500,000 products to over one million customers and shipping 44,000 parcels a day.

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Where’s B2B e-commerce heading? 

Two distinct types of B2B e-commerce exist today. The first is the most straightforward, as demonstrated by the examples we mentioned earlier – GE, Boeing and many more. They sell direct to business customers. But the biggest growth area in B2B e-commerce is in marketplace websites.

The most well-known example outside of Asia is Amazon. Yes, Amazon sells direct to both consumers and businesses, fulfilling products from its own warehouses and distribution centres. But it also has Amazon Marketplace, where third-party resellers sell to consumers. In 2017, direct sales grew 21%, yet marketplace sales grew 41%. Amazon uses this same direct + marketplace model in its B2B division, Amazon Business. But the biggest success story in B2B online marketplaces is undoubtedly, all about one website: Alibaba. We’ll come to Alibaba and other similar B2B marketplaces later.

What about automatic ordering systems?

A lot of companies and their suppliers use a background reordering system, or electronic data interchange (EDI). These systems can automatically reorder stock if inventory levels fall below a set point. If you’re a supplier to Amazon, you’ll know the process – Amazon detects low stock levels and a computer automatically orders replenishment. Some systems can talk to each other so fluently that orders don’t need to be overseen or processed by a human. However, EDI isn’t e-commerce. It might satisfy the definition of e-commerce – 'commercial transactions conducted electronically on the internet' – but it isn’t e-commerce in the true sense of commerce conducted through a web shop or app.

Changing times for B2B

B2B e-commerce is growing, due in no small part to shifting demographics. Google found that even back in 2015 nearly half of B2B purchasing decisions were being made by Millennials. This is not to say Millennials automatically prefer e-commerce, but it’s a safe assumption to make – just look at the huge impact Chinese Millennials had on e-commerce retail sales.

B2B vs. B2C

While they’ve become increasingly indistinguishable, there are still differences between the two.

Ways B2B and B2C are the same

1. Both sell goods and services

2. Both have human buyers

3. E-commerce is a BIG factor in both

Difference between B2B and B2C 

1. B2B often sells large items that can’t be easily delivered

2.  B2B buyers need to get approval for large purchases

3. B2B can have many individuals making the purchase

What B2B e-commerce can learn from B2C models

“61% of all B2B transactions start online.”

The rise of mobile

Transactions are more likely via laptop or desktop, but there’s an increase in B2B purchasers using their smartphones and tablets to research purchases (61% of all B2B transactions start online). Ensuring a fully functional site for mobile will be essential for companies to grow, crosscheck your site with this m-commerce guide.

Drones

Consumer e-commerce retailers are ahead of the game when it comes to innovations in delivery. Amazon has been pushing same-day delivery, while JD.com has already successfully tested a fleet of 40 drones. Now, it’s time for B2B e-commerce to investigate similar delivery options. In fact, DHL Express has invested heavily in drones (or Unmanned Aerial Vehicles), and expects them to go into regular service in the very near future.

Customer experience

B2C retailers have given B2B companies an incredible template for success, with clear, simple and effective online user experiences. Where B2B has lagged, it needs to take note and build great e-commerce websites.

B2B Marketplace Opportunities 

We’ve already mentioned Alibaba, and while it’s the biggest, it’s not the only player out there. Here are the marketplaces you should be focusing on:

- IndiaMART: Created in 1996 by Dinesh Argawal, IndiaMART is now the largest online B2B marketplace in India.

- Moglix: Based in Singapore and founded in 2014, Moglix is new on the scene but growing fast – as much as 300% every year. It’s also got the backing of big B2C names like Flipkart.

- Mercateo: Germany’s top B2B e-commerce trade website has been around for two decades, but goes from strength to strength.

- Amazon Business: For Europe and America, and much of the rest of the world, Amazon Business is the biggest B2B marketplace. But can it make its presence felt in the all-important Asian markets?

- Rakuten Ichiba: The largest e-commerce marketplace in Japan, it uses a mixed B2B2C model to sell to both business and end consumers.

- Alibaba: The world’s largest B2B e-commerce marketplace.Alibaba was founded in 1999 by Jack Ma, and today has services encompassing consumer-to-consumer, business-to-consumer and business-to-business models.

For real B2B e-commerce growth, look to Asia and India

When it comes to e-commerce, the world has never been smaller. Markets worldwide are growing, but it’s Asia seeing the most powerful growth – with Forrester predicting the Asia B2B e-commerce market to expand by 12.1% each year. China stands above all other markets, at nearly double the growth rate of the US B2B e-commerce market, but be sure to read our guide on doing business with Tiger Cub economies as well.

How to grow your B2B e-commerce brand

The biggest challenge facing your B2B e-commerce brand is distinction: how do you stand apart from your competitors? Ensure you present your business or e-commerce offer as a distinctive brand for the sector you serve, and demonstrate exactly how you are better than competitors. It’s easier said than done – but here’s how to do it.

Challenge old-world assumptions

B2B has a lot to learn from its B2C cousins. Leaders like Amazon, as well as niche start-ups, have set a high bar that B2B brands simply must follow – as one thing B2C and B2B brands share is who they’re selling to: humans. To keep moving past competitors you must keep pushing for better. Fewer clicks to find a product. Better search. More delivery options. Faster delivery.

Recently emerging B2C brands are digitally native. They look at old-world assumptions and try to make the entire journey simpler. From how to find a product to fast, hassle-free shipping. Success isn’t always about getting global, it’s commanding your chosen niche wisely, with a streamlined service both online and in delivery.

Where there's a challenge, there’s an opportunity

As a B2B brand, you’re up against Original Equipment Manufacturers and Original Design manufacturers, as well as generic manufacturers. To beat them all, David and Goliath-style, you need to bring your brand value to life: what story can you tell? What is your USP? What advantage do you have over competitors (even if you don’t see it as an advantage)? To help you grow, you already have a selection of tools at your disposal:

- Trust: Use social proof: customer testimonials, online review ratings, case studies.

- Distinctiveness: What do your competitors look like, do and say? Strive to be the opposite. When everyone else zigs, you should zag.

- Consistency: This is more important than it seems. Consistency across your visual and textual output is a sign of trustworthiness and reliability. Always use the same tone and visual identity, ensuring your brand logo is on all products and communications. Inconsistency makes you look amateur.

- Customer-centricity: DNVBs, and DHL Express itself, are known for their customer-centric approach. All your products, services and operations must be geared to serving your customers, not making a product. Serve your customers to the best of your abilities and profit will follow.

How to scale up and expand your borders

Having built your brand, the next step is to start shipping to a wider audience. With global shipping now easily accessible, the world is your oyster. However, you need to put in the leg work first. Start with local research into your target markets. Identify target audience types (who is your typical business buyer?). Where is the growth in product segments? What are businesses demanding in your chosen areas? For more help in this area, take a look at our Country Guides.

Take a diversified strategy

You might be asking yourself “what strategy should I take? Direct-to-business or third-party marketplace?” We’ve already talked about the meteoric growth of B2B marketplaces around the world, and covered the trend for companies large and small to create their own successful direct to business e-commerce shops. Both work well, and that means you need to do both – diversify to amplify.  

Talking of diversity, with global access to your site, allow for global accessibility. Your e-commerce shop will need to handle all relevant local languages. Three-quarters of e-commerce shoppers want to buy in their own language (no surprises there) while 59% rarely or never buy from English-only websites.

Finally, get your digital channels working harder

Almost nine out of ten B2B buyers use the internet to begin their search. That means there’s a huge opportunity to get in front of their eyeballs. Use content through Twitter, Facebook and LinkedIn, sharing brand-led content on both your company and the products in the niche you serve. If you have the budget, bring your products to life with animated GIFs and video content with your brand logo lockup.

Using digital advertising, including Google and Twitter, to advertise both geographically, and to those who align with your business’ interests. Digital advertising’s great advantage is the specificity of the targeting, letting you find your audience with much greater focus. And don’t forget the importance of SEO. In fact 39% of all e-commerce traffic comes from search. Want to know more about SEO? Read this guide.

We’ve previously talked at length about Google Display advertising, Twitter, Facebook and LinkedIn – but these aren’t the dominant platforms in every country. Use preferred local digital services and channels such as Yahoo in Japan, WeChat in China, Yandex in Russia, and XING in Germany.

Want to know more? 

DHL Express has the expertise to help your B2B e-commerce brand find whole new markets around the world. Speak to our experts today to get started.

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