B2B e-commerce in India is ‘on the runway’
The past two years have seen major changes in the e-commerce space led by a virtual revolution in B2C (Business to consumer) e-commerce. B2B (Business to Business) e-commerce has lagged much as it has in the west. However there is a significant difference between current Indian experience and what has happened in the west. India is closing the gap much faster.
Rather than taking 10 or more years to come of age in India, B2B is following hard on the heels of B2C. There are some very good reasons for this: B2C technology and experience exist and are well tested and individuals are accustomed to easy and intuitive internet shopping with a high degree of sophistication. Perhaps most importantly, in India the demographic is young and tech-savvy which translates into demand at work for a similar experience to home shopping, ideally from all devices.
There are two very distinct sides to the B2B equation,
- enabling OEM/ suppliers to sell B2B (Sales and Distribution platform to connect with buyer community and network of Dealers & Distributors) and
- providing suitable tools for buyers of all sizes.
This is not a simple B2C environment for either parties; both need appropriate and sophisticated technology to move to a true B2B eco-system.
Enabling OEM/suppliers to sell B2B
The supplier sits at the core of the B2B world and needs to be enabled to manage an online environment which allows him to manage different prices and product lists for different buyers, manage complex promotions and discounting, get taxes and delivery charges right in real time, sell complex products and services, integrate with buyers ERP systems as required, take payment in different forms including card, and deal with overseas buyers looking to source in India.
Setting up a stand alone website to do all of this is very expensive and time consuming, only the large western companies have invested in this type of technology with the largest spending many millions of dollars on their B2B web presence.
cloudBuy provides this level of B2B supplier e-commerce ‘out of the box’ for all suppliers, levelling the playing field between large corporates with deep pockets and SME’s. In India the cloudBuy team have been interacting with a wide range of SME’s to introduce the concept. Nilesh Gopali, Country Head India commented “We have met with all kinds of entrepreneurs selling everything from heavy engineering to stationery, tea and coffee. Universally they feel that now is the time to make the move to e-commerce, often driven by pressure from the younger members of the team who routinely do business on their smartphones.”
The cloudBuy B2B solutions for suppliers operate across all devices and support all forms of trading. This rich capability is what attracted Confederation of Indian Industry (CII) to the platform, it has partnered with cloudBuy to provide B2B capabilities to its members and wrap this all up into a single global trading gateway which will allow CII members not only to trade in India, but will showcase them globally and facilitate cross-border trade.
Providing suitable tools for buyers of all sizes
On the other side of the equation lie the buyers, many of whom are the same organisations as the suppliers. Nilesh Gopali commented “Buyers come in all sizes and shapes from the very large corporate organisations and government bodies, through medium sized companies right down to micro businesses. They all buy B2B but their requirements and processes are very different.”
In India there is a healthy eco-system of large companies with very substantial B2B spend. Many of these organisations have invested heavily in ERP solutions and are now looking out to e-procurement to drive additional efficiency, transparency and effectiveness across the organisation. They require a real time solution which integrates with the ERP and allows them to interact with their suppliers, ensuring that everything is correct at purchase and that in-market complexities such as Indian tax are catered for.
Alongside this is Government which globally has been seen to be an early adopter of these technologies. In India they are coming late to the party. However, this may be to their benefit as they tap into ready-made communities of B2B enabled suppliers, courtesy of the large corporate market. In the west, government is not always the most popular customer and there has been some reluctance by suppliers to join government B2B initiatives as a first step; large scale corporate take- up would mitigate this considerably.
In India there are about 40million SME’s and MSME’s. Many of the SME’s are large businesses in their own right although not listed. These medium sized businesses have a very substantial spend and are major employers. They are unlikely to have invested in an ERP system but do want to control their procurement. Here they require a stand-alone purchasing solution which interacts with their suppliers and controls the purchasing activities of their employees. At the bottom level are the MSME’s who want best value but behave much more like consumers in their buying behaviours. This group wants to purchase from online marketplaces and APP’s. They have high expectations of mobile technology on the one hand and informal relationships with trusted suppliers on the other. It is likely that this group will initially move only their commodity buying online and it will take longer for them to migrate to wider sourcing.
Good demand envisaged
From the company’s experience of entering the Indian market, it is clear that there is a good demand for their services and that elements of the technology are unique. The company fully addresses all of the issues encountered in B2B trading with well tried and tested solutions which deal with complex goods and services, delivery, finance and tax, for buyers and sellers of all types. It provides B2B e-commerce capabilities for OEM/suppliers, private purchasing solutions for large buyers and open marketplaces for more general B2B trading and cross-border trade.
Overall it’s difficult to size the B2B market in India. However, it’s fair to say that it dwarfs B2C and once it starts to move in earnest, it has the potential to transform the economy, supporting domestic & international trade and playing a part in initiatives such as ‘Make in India’.
Indian market is at an early stage of development but what is clear is that with no legacy systems in place there is an opportunity for a dominant player to emerge quickly. The cloudBuy’s technology is well set to drive this dominance as it provides a true B2C experience including mobile enablement, but with all of the controls & reporting required by big business. cloudBuy is looking to accelerate uptake and speed to market.
– P.K. Balasubbramaniian
