Global B2B eCommerce sector to hit £5.2 trillion by 2020
The booming business-to-business (B2B) eCommerce sector will be worth £5.2 trillion by 2020, as more and more companies move from their traditional ways of operating to online platforms, according to a forecast from market research firm Frost & Sullivan.
The enormous figure is about twice what has been forecast for the thriving business-to-consumer (B2C) market and is being driven in large part by a growing awareness among companies everywhere that there are substantial cost savings to be made, as well as increased efficiencies and higher sales, by ditching their old systems and moving online, the research suggests.
Mobile technologies are powering the B2B online sector ever forward. Frost & Sullivan consultant Pramod Dibble noted that “with technological advancements facilitating the procurement of goods on the move through smartphones and tablets, business use of online platforms will rapidly grow.” In addition, he said, the widespread availability – and affordability – of cloud computing platforms is a major reason why companies, from e-commerce fulfilment centres to eCommerce store owners, are making the transition.
In all – taking both B2B and B2C transactions into account – online trade will have ballooned to $25 trillion in five years’ time. In the UK, the online B2C market increased by 12% last year, representing 24% of total retail sales.
The Frost & Sullivan report – entitled The Future of B2B Online Retailing – does point out some potential challenges and obstacles for companies trading online with each other, however.
Chief among the possible difficulties are snags in distribution, as companies often buy goods in bulk and of various types, which could lead to logistical issues, especially with flexibility in shipping but also varying prices over a period of time. Addressing these problems before they occur will be the key to ensuring smooth and successful transactions, not scrambling to sort something out when it happens.
Nevertheless, the report is upbeat on the future of the sector, especially given its projected value by 2020, and says that firms making the move to online buying and selling with other companies will be the ones that will gain increasing prominence in the next few years.