What is a B2B Electronic Marketplace?
A B2b marketplace is an e-commerce platform that allows businesses to purchase or sell products and services from or to another business online. B2B marketplaces are similar to B2C marketplaces like Amazon. Multiple sellers attempt to attract buyers on the same marketplace but unlike B2C marketplaces there are more complications involved in B2B marketplaces. Despite some complications, B2B marketplaces continue to grow. Forrester predicts that the U.S B2B e-commerce transactions will reach 1.8 trillion and make up 17% of all B2B sales in the U.S by 2023.
History of B2B Marketplaces
When discussing B2B marketplaces, it may be best to discuss the history of this rapidly growing market first. Alibaba.com was the first established company that made the B2B marketplace model successful. Jack Ma, an English teacher, founded Alibaba.com in 1999. Ma and his 17 partners managed to convince 80 investors to invest 80,00 into his future online marketplace. Alibaba.com was created to allow small and medium businesses to find clients in other countries. Towards the end of the 1970s, China began to trade with foreign buyers more often, but strict regulation made it difficult for small and medium-sized businesses to conduct business with these foreign buyers. Alibaba.com allowed these small to medium-sized businesses to access international buyers without having to worry about legal problems in exchange for a commission fee on each transaction. Since launching, Alibaba.com has managed to earn over 150 million registered members, over 10 million active buyers, and over 150,000 sellers, according to John Caplan, who oversees the North American B2B sector.
The types of B2B marketplaces
Numerous e-commerce businesses followed Alibaba.com’s example and created a B2B marketplace platform. According to B2BBECNEWS, Amazon is currently the largest B2B marketplace, Alibaba and Thomas are the 2nd and 3rd largest. Although these are the largest marketplaces the B2B marketplace is compromised of more than just general marketplaces. There are two types of B2B marketplaces Horizontal and vertical.
Horizontal marketplaces use a variety of sellers, selling various products and services. Horizontal marketplaces focus on selling a variety of products and services efficiently.
Vertical marketplaces focus on selling products and services for a specific industry. Vertical marketplaces are able to market products and services with more precision than a Horizontal marketplace due to the niche industries that vertical marketplaces market to.
The future of B2B marketplaces
Ecommerce marketplaces are filling in a need that consumers have for transparent, personalized and simple transactions, the B2B marketplace is no different. The use of Ai will continue to innovate the marketplace environment. Response times to questions and the personalization of user interactions are aspects of the marketplace that will continue to improve. Horizontal B2B marketplaces like Alibaba.com are flourishing, but differentiation between competitors is a problem in the B2B marketplace. Niche marketplaces that are able to efficiently market to clients will continue to pop everywhere.