Business to Business marketplaces have never had it so good; it looks like these user-friendly platforms will hold their position as the leading channels for commercial purchasing for many years to come. The Global B2B E-Commerce Marketplaces 2020 report tells us that this particular sector will multiply its market share by four within the next three years – faster than the rest of the B2B channels put together. And with global business-to-business eCommerce transactions already totalling over US $12 trillion as far back as 2019, it seems that most enterprises – small and large – prefer to interact on these platforms. Not only are online commercial trading centres an opportunity to make bulk sales, they offer a huge networking opportunity.
B2B contracts are more likely to undergo a long purchase cycle, they offer varied prices according to quantity and a broad range of payment options, and will also provide the legal and logistical solutions necessary to make these often long-term business relationships pay off. Investing in marketplace giants can pay interesting dividends.
So which are the biggest global players in the B2B marketplace sector? And what are their plans for the future?
Alibaba has over 10 million buyers and is the leading B2B marketplace with a forecasted 3.57 trillion US dollars in sales for 2024. It offers product verification, trade assurance, Alipay and Escrow (among many other payment options) and customs data. Share prices have taken a dip recently with the concerns surrounding China’s regulatory environment. Even so, forecasts tend to take a more negative view than actual figures. For the first time, the relatively new cloud-computing sector became profitable at the end of 2020.
Amazon shares rose gradually between 2017 and 2020 but the pandemic changed this. The second quarter of 2020 saw a sudden surge in share prices and they continue to stay stable as this US giant dominates the Western market. With 11-digit annualized sales in 2019, it accounts for more than 40% of all US eCommerce sales. As with Alibaba, Amazon’s cloud business (Amazon Web Services or AWS) is expected to help fuel its current success through this decade. The downside for sellers on Amazon is the huge range of competition. While this competition is less for B2B concerns when placed alongside the massive B2C and C2B advertisers, the majority pair Amazon store fronts with branded websites and redirect their visitors via influencers, SEO and other marketing standard practice such as opting to buy website traffic.
Rakuten used to be known as the Amazon of Japan but has since reached global recognition on par with that of Amazon and Alibaba. Known for its encouragement of noble sales where customer hospitality counts, Rakuten stocks are still suffering as the company invests heavily in its infrastructure. However, this investment includes artificial intelligence, 5G mobile infrastructure and building the world’s first fully virtualized cloud-native mobile network – an investment that will pay off not too far in the future.
Mercateo operates both a B2B network (Unite) and an e-procurement platform and has recently cooperated with Newtron to provide web-based business relationship solutions. This combination of digital networking and web-based sales enjoyed an annual revenue of 142 million US dollars in 2012 and 326 million just 6 years later. Operating across Europe and much further afield, this major contender provides a platform for B2B transactions covering office supplies and furnishings, IT products, tools, medical supplies and machines, construction materials, hospitality equipment and wholesale products from an ever greater range of categories.
Thomas (or ThomasNet) is the top industrial procurement platform in the US that is becoming a global leader in this niche B2B market thanks to Thomas International. With over 120 years of experience in the engineering and industrial sectors, the platform is now a huge networking platform – the equivalent of LinkedIn and Alibaba/Amazon for construction, design and technical management. As the pandemic progresses, Thomas has helped to minimise the shortages of critical supplies, capabilities and materials to enable the manufacture of safety equipment.
Etsy Wholesale as a wholesale agent closed on July 31st, 2018. Its attempt to step into a purely B2B market failed not because of a lack of buyers but because the sellers at this time were unwilling to sell in bulk. This might change in the future as Etsy relaxes its stringent trading policies that used to limit their market to the bohemian and quirky. Scanning the product pages it
is easy to see that this is no longer the case. For the moment, Etsy sellers who wish to sell in large volumes to commercial or industrial clients must indicate their willingness to supply large volume orders using tags or turn to private listings for their bulk-buy customers. It is not easy to rank Your Etsy listing for a B2B audience; however, the lack of competition means that those in the know could slowly boost the wholesale market. Buy targeted website traffic for a paired website and invest in content, SEO and email marketing as the time will soon come for Etsy to once again dip its feet in the B2B market, this time with much greater success.
Should I Invest in a B2B Marketplace?
Naturally, online B2B will not replace the necessity of the human face that is the sales representative – at least not this decade. The personal touch, especially with global clients where face-to-face interaction can avoid language-based misunderstanding, remains valued when supplying intricate machinery or equipment. However, for those companies willing to buy simpler items from other brands without physical interaction, the digital commerce road is much preferred.
A Forrester survey made in the happy pre-pandemic year of 2018 already showed that more than 70% of B2B buyers prefer to buy online rather than from a sales rep. This is even more the case today. With the integration of complete business networking solutions on a sales-based platform, companies get the best of both worlds. It seems only natural that this move continues. Investing in those marketplaces that combine multiple channels within a single domain are the ones to keep an eye on for current and future investments.