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Johannesburg - Companies should not ignore the rapid growth in business-to-business (B2B) e-commerce, according to Neil Watson, CEO of Digital Planet.
"Forget what you thought about B2B’s online potential – it could soon be an even bigger money-spinner than business-to-consumer (B2C). Globally, the B2B e-commerce market is on track to outpace the B2C market," said Watson.
According to Frost & Sullivan, the market will hit US$6.7trn in gross merchandise value by 2020.
"With those numbers flying around, it’s perplexing to look around and see just how few businesses seem to be aware of what’s going on in the B2B e-commerce space. Part of this is due to a paucity of hard numbers, at least in the South African context," said Watson.
"There’s simply not enough statistical data out there yet to come to any solid conclusions about the local market, likely because of its immaturity compared to its global counterparts."
He has noticed a definite increase in demand for business-focused e-commerce from clients and potential clients.
"The ramp up we see on new B2B customers is extremely fast. A persistent trend we’ve noticed is that when we go live with a new B2B e-commerce platform for a client, it quickly comes to represent 10% to 20% of their overall business almost overnight," said Watson.
"A recent Forrester Research report backs this, predicting that the percentage of B2B buyers completing their work-related purchases online will hit 56% by 2017."
To him perhaps the most exciting finding in the report is the potential cost-saving benefits of digital B2B platforms. One projection is that companies could stand to cut the costs of serving and selling to customers by as much as 90% simply by introducing self-service ecommerce features.
"There are plenty of other advantages to introducing an e-commerce element to existing sales platforms. Companies enjoy greater efficiency as they are able to take orders more quickly and accurately. There are more opportunities for cross- and upselling, while greater scalability ensures they can sell more with less staff," explained Watson.
"What we often see with B2B sellers is that they are better able to serve their smaller customers using fewer resources. Instead of needing expensive sales agents to go out to see these customers, they can push the right products and services to their customers via their online platform."
He sees many similarities between a successful B2B and a B2C e-commerce strategy.
"Business clients are still ultimately consumers, so companies must consider things like user experience and calls to action when building their online platforms. In many ways, B2B websites have the same triggers as B2C with a slightly different slant," said Watson.
The business client might need to buy a pre-selected type of item in bulk, for example, while the consumer might want to browse.
"It’s important to note however that B2B e-commerce is about enhancing existing sales channels rather than growing sales. With B2B, companies are targeting what is essentially a closed community of customers," expained Watson.
"This calls for a more automated customer strategy than a typical B2C online platform might require. It allows for existing relationships to become less transactional and more relationship-oriented, as any transactions can be done through an online platform, leaving more time to spend with customers directly."
