B2B e-commerce: A trend that’s on the rise

Christian Ries, Head of International Vendor Accounts, Siemens Financial Services Commercial Finance

Online shopping is a part of our lives

Click, click, click. That’s the sound of purchases being made. We live in a modern world where an increasing number of our purchases are being made by clicking a button rather than presenting a bank card (or even cash… remember how that works?).

 

E-commerce platforms are now a familiar part of our consumer landscape. According to statistics body Eurostat, as many as 82% of the 35-44 year old have ordered goods or services online in last twelve months, compared with 63% of the 55-64 year old. The important thing is not the comparison, but that it’s a majority habit whatever your age. [1]

 

Following a year of shifts in online shopping, surges in digital revenue tapered off in 2021 as store sales rebounded. But online penetration had nevertheless grown to 19% in 2021, a year in which Amazon accounted for more than 40% of all U.S. e-commerce! [2]

E-commerce is gaining more and more popularity in B2B businesses

And now the surprise: this habit has also begun to spread to the world of B2B sales. The global B2B E-Commerce market held a market value of USD 8,523.3 Billion in 2021 and is projected to reach USD 18,771.4 Billion by the year 2027. This represents huge growth - a CAGR of 14.1% from 2022 to 2027. [3]

 

So, no business can afford to ignore e-commerce, nor lag behind on bringing such capabilities to its customers. We crave the convenience of e-commerce in business, just as we regard it as the absolute norm in our daily personal lives. It has become part of the service offering – the ease and convenience – that one business buying from another expects.

 

And this is especially true for the manufacturing sector, where having a B2B e-commerce strategy is becoming increasingly necessary if manufacturers want to better sell their products or procure the necessary components for manufacturing them. By establishing a B2B e-commerce system, manufacturing companies provide greater flexibility, better inventory management, and decrease the likelihood of human error.

However, in B2B e-commerce, a trading platform is not all that’s needed

Our own experience at Siemens Financial Services provides a good example. When the pandemic hit, we were at the head of the game in getting many of our sales systems online. That was a relief, because the value of doing so soon proved itself, especially for our component sales and mid ticket financing services.

 

Our key OEM and reseller partners wanted to have the means to offer financing (provided by us!) as part of their value proposition, all done remotely, with no need for face-to-face interaction. This involved the ability to generate a quotation online, negotiate the terms of the deal, and then exchange binding contracts… all provided over the internet. This was critical to keeping the deal flow going, even though the business community all over the world was operating under massive restrictions on physical movement.

 

You can imagine the positive impact that these capabilities had on vendors and their customers – allowing a level of business continuity that wouldn’t otherwise have been possible. And for all of us, the memory of how critical digital business was during that time will not fade for some time. Companies who were in the pole position to offer digital, B2B e-commerce will thrive, whereas those lagging behind may find their competitive disadvantage actually grows.

B2B e-commerce solution with integrated finance

Saying this it becomes pretty obvious that integrated finance is taking B2B e-commerce to the next level. Read more about the value add of tailored financial solutions and how it can work in practice in my next blog.

 

In the meantime, visit our website to learn how our vendor financing solutions help vendors to meet their customers' needs

 

 

 

 

 

 

[1]  https://ec.europa.eu/eurostat

[2]  https://www.digitalcommerce360.com/article/us-ecommerce-sales/#:~:text=Amazon%20also%20accounted%20for%20more,weary%20consumers%20returned%20to%20stores

[3] https://www.researchandmarkets.com/reports/5511320/global-b2b-e-commerce-market-by-type-by-payment

About the author:

Christian Ries, Head of International Vendor Accounts, Siemens Financial Services Commercial Finance

Having been in the finance and leasing industry for all my professional life, I have been working on vendor financing solutions and partnership business with OEMS and distributors in various industries for the last twenty years.

 

As global businesses have dedicated requirements for partnering with financing support, it is my target to always find the best fitting solution for the individual situation of each partner. This includes both, traditional means, and the modern development of changing industrial environment.

 

Being part of the Siemens Financial Services team enables me to bring in all my experience and still develop new ways drive asset-based lending between the OEM and the end customers.