B2B Ecommerce is a very exciting topic and has immense potential in changing how Business Procurement Functions today . I would be sharing more on the B2B Ecommerce space in the next few posts. In this article I want to quickly talk about the current Market in India , estimated Market Size for B2B Ecommerce and some sub segments of B2B Ecommerce and some of the key players in the Market.
Global Scenario –
Globally B2B Ecommerce is on-par with B2C Ecommerce. It has witnessed tremendous growth in the last couple of years. Alibaba started the trend with their Global B2B ECommerce Platform and in the US & developed countries, B2B Ecommerce has grown significantly over the years. Amazon has been very successful with their Business Supplies Vertical and similarly other large Industrial Distributors in the US & UK like Grainger, McMaster, MSC Direct, Fastenal etc have transformed a bigger portion of their business into Online.
India is no exception either. With a growing Industrial Market and more millennials being in key purchasing roles B2B Ecommerce is growing at a rapid pace. Considering the size & dynamics of the Indian market it will take its own time but once it reaches its tipping point I am quite sure India will see a major shift in the B2B Ecommerce market from the current stage.
About the B2B Business in India –
Currently B2B Business in India is mainly offline, relationship driven across the segments. In the offline model the purchasing team plays a very important role because of the fact they have to check with different suppliers across varied brands, find better alternatives, pricing analysis was a cumbersome task and every big Industrial Company have to manage more than 50-100 suppliers for various products. Mostly the decision is done by the transacting manager and the supplier. This at times kept the senior management clueless because there was a certain lack of transparency of the pricing arrangements etc.
Now with the increase in awareness of Ecommerce, there is a huge opportunity in India for this segment to go Online as well. In the last 3-4 years we have seen many companies – some new, some traditional companies start Ecommerce operations – some Inventory Model, some Marketplace Model. It is too early to comment on these companies or the B2B Ecommerce market in India yet as it is just slowly taking shape.
Size of B2B Market in India – As per various studies & research articles online the overall size of the B2B market in India is estimated to be around 100 Bn USD. The products that would be in this segment are probably Industrial Products, Office Supplies, Machine Accessories, Plumbing Supplies, General Hardware Supplies, Construction Supplies , Material Handling Products, Plastics , IT Products, Small Machines, HealthCare Equipment, Wellness Equipment, Wellness Supplies etc. (** Data needs to be authenticated with govn sources )
Why is B2B Market a challenging Space
B2B Business differs from Consumer segment in more than many ways. In Consumer Ecommerce – many cases it’s the price and variety of catalog which is the key selling factor whereas in B2B business- supplier-customer relationship, service levels, technical support, after market support plays a big role and differentiating factor. These factors makes this business segment little difficult for new players to enter, sustain and challenge the already established players. Business Customers once they are used to a certain supplier they tend to stick with the supplier – as there is a amount trust , comfort levels, reliability built over few years of business and wouldn’t want to take risks with a new supplier.
Opportunity in B2B space
Since the B2B Traditionally an offline model – is mostly driven by family oriented business , proprietor driven business model in each Locality of India. Due to the nature of this Business mode there are very few corporates in this model. But there is plenty of opportunity for some large MNC or VC based Entity with significant capital can consolidate few medium sized companies , tie up with best of the brands, offer a large product & service offering – they can change the game and landscape of the whole space. For ex. Amazon or Grainger – if they could replicate their US success here.
B2B Ecommerce Players in India
Starting 2015 there were so many B2B Ecommerce companies started in India. Due to challenges on the model many have closed . We will just focus on few of the companies which are still functioning this space in the B2B Ecom Space in India.
- Tolexo
- Industry Buying
- Moglix
- OfBusiness
- Amazon ( Business Supplies )
- Indiamart
- TradeIndia
- Power2SME
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