The future is within your industry next to similar products.
That’s a philosophy articulated in the December 2015 e-book “Marketplace: the future of B2B e-commerce,” written by Philipe Corrot and Adrien Nussenbaum, founders of marketplace technology provider Mirakl. They wrote the e-book in collaboration with Jean-Marie Fouqet, sales execution representative at Mirakl.
The authors argue that the more a business-to-business marketplace succeeds in joining fragmented demand with fragmented supply, the higher the value of the online bazaar. “We are witnessing the rise of specialized marketplaces that seek to position themselves as one-stop shops for clearly identified markets,” they write.
But what are the benefits of joining (or starting) a B2B marketplace dedicated to a specific vertical? Before we explore this topic, one thing should be made clear: Corrot, Nussenbaum and Fouquet operate in the e-marketplace technology business and therefore have an interest in promoting the idea of online shopping portals where many companies sell. In fact, Mirakl launched in December 2015 Mirakl Marketplace B2B, a technology system designed to help distributors and manufacturers deploy their own online marketplaces. But B2BecNews has also noticed an ongoing development of industry-specific, B2B marketplaces. Recent reportage reveals a number of digital business marketplaces peddling everything from personnel services to petroleum.
There’s the Cross Border Recruitment Exchange, or CBREX, for example, which recently launched as a web portal to connect recruiting firms looking to either hire or place global candidates. In its first 60 days of operation, more than 200 recruiters from 50 different countries signed up for the site, says CEO Gautam Sinha.
Then there’s IngredientsOnline.com, a B2B portal that lets buyers in the United States purchase from Chinese suppliers nutritional raw materials like Potassium Gluconate and amino acids that manufacturers need to produce food and beverage products. The portal was on course to process 6,000 transactions for buyers and suppliers by the end of 2015, says CEO Sherry Wang.
Finally, there’s LabNetwork, an online trading network for the chemical industry. Since launching in May 2015, the global Internet portal has registered more than 200 chemical industry suppliers, making some 2.2 million products available to online buyers and exceeding its initial growth projections, says Brian Cobb, vice president of e-commerce. “On top of the growth we’ve experienced to date, we expect another 100 suppliers and nearly a million more products will be on board by the end of 2015,” Cobb told B2BecNews in December.
The list of industry-specific e-marketplaces goes on, and B2BecNews has covered more than 20 that have cropped up over the past two years. What is driving growth of these e-marketplaces? The simple answer is increased uptake from business buyers and suppliers. But what are the benefits of joining a B2B marketplace?
Corrot, Nussenbaum and Fouqet argue that by engaging in a marketplace, manufacturers and distributors are able to diffuse the technology and marketing costs of operating an individual e-commerce site. A marketplace can also be a great way for B2B companies to test demand in new geographic markets. This opportunity is particularly attractive for companies that sell to other businesses, as nearly two-thirds of these businesses make less than 10% of their income outside their national markets, according to Forrester Research’s August 2015 “Digital is busy transforming B2B e-commerce” report. Manufacturers and distributors can just enter a local, industry-specific e-marketplace—like CBREX for India, or IngredientsOnline for China—instead of bearing the technology and marketing cost of setting up an individual e-commerce site that may be unappealing to local customers.
Some B2B companies may not like the idea of their products being positioned next to those of competitors. But that may be better than a customer coming to your site, finding you don’t have a product and going to a rival’s e-commerce site. “A buyer who cannot find his desired product, or is told that it is no longer in stock, is a disappointed visitor and represents a missed sales opportunity,” the Forrester report says. “Above all, this customer is very likely to find his chosen product elsewhere on the Internet, and may well make this competitor website his first port of call in the future.”
Another reason to sell through online marketplaces is that it can save time for busy, overworked business buyers by letting them buy multiple products in a single place. With marketplaces dedicated to specific industries, business buyers could, ideally, visit one place to complete all of their industry-specific shopping and service needs, whether that be for personnel, petroleum or coffee for the company lunchroom. As Corrot, Nussenbaum and Fouqet contend, this saves time for the business buyer, represents an opportunity for the supplier and will be a significant part of the future of B2B e-commerce.
Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Nona Tepper, associate editor for B2B e-commerce, on Twitter @ntepper90.Favorite