according to statist, global B2B e-commerce transactions totaled US$12.2 trillion in 2019, and it may have seen growth of around 25 percent in the last two years! One of the most prominent trends in B2B e-commerce is the rise of the B2B market. By now, the fashion industry may have a fair idea of what a B2B marketplace is! The impact of this online marketplace model cannot be underestimated as it has redefined the business relationship between B2B buyers and sellers and acts as a network point.
The concept is experiencing a strong level of adoption in the global fashion business and India is not far behind either. More B2B marketplaces are marking their presence in the Indian industry and trying to revamp the broken conventional fashion supply chains by bringing almost all the established processes to the digital platform.
The advantage is that, unlike before, suppliers and buyers do not need to spend time and resources searching for each other and worrying about the status of their orders and financial transactions.
The fact is that a large part of the traditional supply chain in the textile and clothing industry faced a significant setback during Covid-19 and stakeholders such as large manufacturers, SMEs, distributors and retailers suffered a severe loss of efficiency in key acquisition. processes, especially where sourcing decisions were made in a disorganized environment that lacked both credibility and accountability.
These disruptions fueled the evolution of B2B marketplaces that emerged strongly to offer B2B purchasing and sourcing through online platforms at reasonable prices and shorter delivery times.
So how do these platforms work? These Marketplaces have members from various segments on the purchasing and supplier sides who can place orders and fulfill these orders. To partner with Marketplaces, there are business models such as subscription, listing fees, and commission, and businesses can choose what works best for them.
Why bet on a B2B Marketplace?
Traditional B2B sales in the fashion industry have the following complexities that set them apart from the B2C model. All these factors are taken into consideration by the company that builds and manages a B2B Marketplace:
- long buying cycle
- The price may vary depending on product changes and the number of items.
- Bulk sales usually; samples needed
- Different types of payment and international payment problems
- Logistics and distribution issues.
- Document and bureaucratic issues
B2B marketplaces are creating better online supply chains within the industry and reflecting on the gaps between buyers and sellers.
“Fashion brands have become a little better at adopting technology because end consumers are evolving. They are dealing with millennials and Gen Z and these consumers have seen some buzz statements on social media. So brands are obviously adopting things faster than factories and manufacturers are still trying to cope with rapidly evolving trends. The reason is: communication gap between brands and suppliers. And this is what a B2B Marketplace tries to solve. In this effort, each parliamentarian tries to develop a kind of supply chain that works well for both parties,” he commented. Anuj George, Head of SaaS, Zilingo.
The following are two examples of how B2B marketplaces are finding solutions to longstanding industry problems and developing their partners along their journey:
- ReshaMandi has partnered with farmers and given them an IoT device
- Zilingo has partnered with factories to make them profitable through its technology tools
For a fashion brand that has its own manufacturing, there is a valid argument they have about this whole scenario. According to Akhil Duggar Jain, Executive Director of MADAME – a well-known local fashion brand that also has Jain Amar Clothing Pvt. Ltd. on its side as its parent company, the go-to strategy for a brand should be how to create a better and more agile supply chain and see how a market B2B helps with that.
“About 70 percent of the products we sell through our brand are produced in our factory. However, as we continue to grow, there seems to be an obvious need for a third-party B2B supply chain, which is becoming a major need for us,” Akhil said.
Another important aspect when analyzing the operation and offers of a B2B Marketplace is: how does a company create the demand for products/services in the Marketplace before there is enough supply and vice versa?
Dr. Stephen Patton, Director of Sourcing (South Asia), Liverpool Mexico You have your opinion on this. He explained: “Innovation has outpaced adoption. When companies are ready to adopt a concept, innovation goes to the next level! A factory can request to explore what buyers are looking for and stop selling what they themselves want to manufacture, but start producing what people (final consumers) ask for. It takes a bit of time to adopt. Changing a supply chain takes nine to 10 months, while changing a product line/collection takes two to three weeks.”
Key expectation of a buyer of a B2B Marketplace
Buyers, as they say, are what drive the growth of manufacturing factories by placing orders there. Buyers and factories therefore need to know each other and a Marketplace needs to be viewed from that perspective so that the experience on a digital B2B platform can be improved for buyers in terms of ease of finding factories, ease of ordering and fulfillment. , etc. However, the key question remains: what is the work experience of a Marketplace buyer? What features do you think have the most value and what else do you expect?
Stephen said: “In our case, which is Liverpool Retail Group, customers expect a certain level of quality of product type. They do not go into detail if it is a direct supply or a third party. It’s a series of assumptions that they make based on historical contacts about what the brand represents to them. We have to make sure that everything we sell is aligned with the company’s values. If it’s not aligned, it’s our name that takes the hit! To manage these expectations, brands need to align accordingly with vendors if both are partnered in a Marketplace, closely monitoring quality and delivery time. That is a simple but more important expectation.”
B2B Market: 6 Critical Functions
- Multi-vendor capabilities: A key feature of a good B2B Marketplace solution is that it puts you in control of your business page and information. You must have access to manage your profile, content information, contact details, pricing pages, and managing your team’s roles.
- self-service features: It is often the case that people prefer to order themselves instead of having to interact with customer service representatives. Therefore, a robust B2B eCommerce marketplace has features that allow for this self-service model if businesses choose to do so. B2B Marketplaces must be highly responsive and intuitive to create a pleasant user experience. For example, when buyers search for solutions for your business, they often need to request quotes, submit orders, or track shipments—the B2B marketplace you choose should support these features.
- Information Security Features: As with any digital platform, the security and confidentiality of data and information are essential for organizations to feel safe and comfortable using the platform. Make sure the B2B Marketplace you choose places an emphasis on protecting your private information so you don’t have to worry about data breaches.
- User-friendly search navigation: A key aspect of a B2B Marketplace is the ability to filter and search for specific vendors and businesses. The right marketplace platform has easy-to-use search features that allow you to filter sellers by brand name, price range, and product availability quickly and accurately.
- Fast and flexible workflows: Flexibility and speed should be the cornerstone of your B2B marketplace. We’ve all seen how quickly markets and industries can change, and your eCommerce features need to be able to adapt to them. Buyers and sellers must be able to rely on a flexible and customizable platform that allows them to customize onboarding strategies, change shipping and order processing practices, and replenish supplies when necessary.
- integration options: The best technologies can work alongside your existing applications and tools. Be sure to find a B2B eCommerce marketplace with features that work seamlessly with any other software solutions your organization uses. This leads to a more streamlined process and a better experience for both buyers and sellers.