The B2B ecommerce industry has had a love/hate relationship with marketplaces over the last 20 years. Around the turn of the millennium, B2B marketplaces went looking for love from B2B buyers and sellers, but the resulting affair was short. The technology was inadequate to nonexistent, buyers and sellers on a wide scale were not interested, and competitive differences kept industry marketplace coalitions from working successfully together.
Fast forward to 2022, and B2B buyers and sellers are in love once more with marketplaces. And the feeling from marketplace operators is mutual. B2B marketplaces are now the fastest-growing channel in B2B ecommerce, based on a market projection from Digital Commerce 360.
How big are B2B marketplaces getting?
Sales on B2B marketplaces shot up 131% to $56.5 billion in 2021. And they are projected to increase at a similar pace to $130 billion in 2022.
Since the pandemic struck more than two years ago, the B2B ecommerce landscape has changed dramatically. B2B ecommerce and B2B marketplaces are now mainstream. Sales on B2B marketplaces have increased 5.3 times in just two years, from 2020 to 2022 (projection).
And B2B marketplaces in 2023 and beyond will become even more mainstream. In 2022, B2B marketplaces grew 7.2 times faster than all B2B ecommerce, based on a projection from Digital Commerce 360.
Three years ago, Digital Commerce 360 was following about 75 to 100 B2B marketplaces. Today, the B2B Marketplace 400 research report has metrics and analysis on 400 commercial and vertical marketplaces. They are spread across 18 industries.
In 2020 B2B marketplace sales accounted for 1.8%, or $24.60 billion, of the $1.390 trillion in B2B ecommerce sales. In 2022 that share is predicted to increase to 6.9%, or $130.00 billion, of the $1.890 trillion in B2B ecommerce sales.
B2B buyers find marketplace shopping useful
B2B buyers, like consumers, turned to websites to make purchases when the COVID-19 pandemic struck in early 2020, making face-to-face transactions impossible in many cases. When Digital Commerce 360 asked business buyers in March 2022 how the pandemic changed their buying behavior, the top response, selected by 52%, was that they went to “ecommerce sites as they have more selection.”
In the same survey, 57% of buyers said they were purchasing more from B2B online marketplaces during the pandemic, and 17% said they were buying “significantly more” than before. And 35% of B2B buyers report getting at least half of their shopping done on marketplaces.
Amazon Business remains the single most dominant B2B marketplace. 43% of B2B buyers expect their total spending on Amazon Business to increase over the course of 2022.
Are investors interested in B2B marketplaces too?
Despite challenging economic conditions, investors continue to pump funding into B2B marketplace companies, says Bowery Capital. In 2021, there were 111 deals completed, and the pace did not fall off so far in 2022. Through May, there have been a total of 63 deals.
The biggest marketplace deal tracked by Bowery Capital so far was $2.2 billion for Flexport, a Transportation & Logistics marketplace. That service sector has seen $7.05 billion in marketplace funding in the past 12 months, the highest of any category.
The Labor sector has seen 21 deals worth $2.31 billion in the past 12 months. Additionally, Manufacturing & Industrials has seen $2.35 billion in funding in the past 12 months, Retailing has enjoyed $1.40 billion in funding, and Agriculture has received $1.24 billion.
Is Amazon Business dominating the market like usual?
Amazon Business is the biggest, but there’s still plenty of room for other B2B marketplaces. In 2021 the Gross Merchandise Value (GMV) for 10 top B2B marketplaces tracked by Bowery Capital was $4.4 billion, compared with $31.4 billion for Amazon Business.
Other notable successes include:
- ShapeConnect, which is privately owned and self-funded, grew by more than 800% between 2020 and 2021, as its base of 3,000 business users increased their online buying and selling of services during the pandemic.
- Xometry, a manufacturing services marketplace, grew Q1 2022 revenue to $83.7 million, up 24.7% from the previous quarter.
- Liquidity Services Inc., an operator of online marketplaces for excess goods, reported a “new all-time record” for gross merchandise volume for its fiscal first quarter ended Dec. 31, 2021. It counted 4.7 million users in that same quarter, up 23% from a year earlier.
In 2022, Bank of America Securities projects Amazon Business will post $41.5 billion in gross merchandise volume. That would be up 31.7% from a projected $31.5 billion in 2022. Based on these projections, Amazon Business singlehandedly would account for 31.9% of all B2B marketplaces sales, or one in every three transactions, based on a Digital Commerce 360 estimate. As soon as 2025, Amazon Business could post annual gross merchandise volume of about $83.1 billion, says BofA Securities.