B2B Marketplace Adoption is on the Rise
B2B marketplaces have become a large growth driver of B2B ecommerce, with worldwide B2B marketplace sales estimated to reach $3.6 trillion by 2024, up from an estimated $680 billion in 2018, according to London-based research and consulting firm iBe.
The COVID-19 pandemic has only further accelerated B2B marketplace adoption, with numerous companies moving quickly to deploy marketplaces, not only to overcome the challenges caused by the pandemic, but to capitalize on new opportunities.
One of the opportunities is supply chain disruptions brought on by the pandemic, causing buyers across numerous industries to search for new ways to purchase products online. Most traditional sales channels have slowed down or closed entirely as businesses shifted to remote work environments. Consequently, business buyers have increasingly turned to marketplaces to buy the goods and services that they need.
In a recent survey of 50 business buyers conducted by Digital Commerce 360:
Speaking of Amazon, the acceleration of B2B marketplaces is being propelled in a big way by the growth of the Amazon Business marketplace. According to Wall Street analysts, Amazon Business had $16 billion in sales in 2019, up from $10.0 billion in 2018. In total, Amazon Business offers more than 56 million products from about 415,000 sellers.
And, according to consulting firm Applico, Amazon Business will be the biggest industrial distributor in the U.S. by 2021, and will realize gross merchandise volume (GMV) of $75 billion by 2023.
Amazon’s growth in B2B ecommerce has had a domino effect throughout many B2B sectors. In reaction to the pandemic, many manufacturers and distributors saw Amazon as a viable sales channel, but now they are seeing it as a potential threat. In response, many B2B companies are shifting away from Amazon and toward creating their own marketplace ecosystems, not only to address the Amazon threat, but also to address a range of opportunities made possible by employing a marketplace business model:
- Quickly expand product assortment without owned inventory, supply chain and fulfillment costs.
- Manage channel complexity by making it easy for customers to find what they want, and buy from a local dealer.
- Gain Inventory visibility and price transparency across their network of dealers and distributors.
- Control the brand and customer experience and deliver frictionless buyer journeys.
Even vertical marketplaces are becoming widespread, with more than 70 B2B marketplaces in more than 13 industries, according to Digital Commerce 360 B2B.
Here are just a few examples…
As healthcare organizations search all avenues to find ventilators and personal protective equipment products to serve both patient and workforce needs during the pandemic, many have turned to B2B marketplaces for the first time to secure the equipment they need.
One such marketplace is Kwipped.com, a medical and laboratory equipment marketplace. Kwipped has a network of over 500 suppliers in the laboratory testing space, and 410 sellers offering medical equipment ranging from ambulatory blood-pressure monitors to respirators and ventilators. Since the pandemic started, Kwipped.com has seen a surge of orders for products used by healthcare professionals.
Thomasnet.com, operated by The Thomas Publishing Co., is an online coronavirus resource hub for manufacturers looking for trading partners, supplies and other resources related to the coronavirus pandemic.
With more than 7.8 million product listings across some 70,000 categories, Thomas reports that the platform has more than 1.5 million buyers per month that source products and services from more than 500,000 North American suppliers.
U.S. General Services Administration
Even the U.S. government has gotten into the act. In June 2020, the U.S. General Services Administration awarded contracts to Amazon Business, Thermo Fisher Scientific and Overstock.com to test B2B marketplaces for annual procurement of up to $6 billion worth of products ranging from furniture and office products to laboratory supplies.
These are just three examples, and there are many more. New B2B marketplaces continue to enter the market at a fast pace, and competition for both buyers and sellers is growing. B2B marketplace adoption is transforming how companies buy and sell products and services in the U.S., and across the globe.
For more insights into the B2B marketplace opportunity, download the 2020 B2B MARKETPLACE REPORT.