While B2C e-commerce has been growing at a steady pace the past 15 years, B2B e-commerce in recent years is now experiencing big growth. At over $500 billion in estimated total sales, the market is an increasing target for innovators, developers, and retailers.
B2B e-commerce is projected by Forrester Research to have been worth close to $559 billion in 2013, far surpassing the B2C projection by eMarketer of $252 billion. Some analysts report that the B2B e-commerce market is 10X that of B2C e-commerce. Nonetheless, the B2B e-commerce industry is awash with willing buyers and able suppliers already: 57% of companies bought something electronically in 2012, and procuring via online channels for B2B is rapidly becoming normal. While 57% is a large number, there’s still so much potential. With a total B2B offline commerce market in the $300 trillion range (BCG 2014), the existing $559 billion is a fraction of the B2B e-commerce potential ahead of us.
E-commerce is a key driver of the future of commerce worldwide. With more than 40% penetration (approximately 3B people) of the world’s population using the Internet today, up from less than 1% in 1995 (see Figure 1), it is safe to say that today, most every company in the world has access to the Internet.
Figure 1: InternetLiveStats 2014
Of course, developed nations figure more prominently in the statistics, such as Asia and the Americas (see Figure 2), but access and usage of the Internet and e-commerce will continue to become more evenly distributed over time.
Figure 2: InternetLiveStats 2014
With access, these companies also have the ability to buy or supply via the web. Also, because e-commerce in the B2C world has had a fifteen-year track record of success, and is truly part of the fabric of our everyday lives (and it is these same people that work “in business”), there is more acceptance and readiness for buyers and suppliers in the B2B segment to conduct commerce this way as well.
B2B has started to grow from a regionally-based marketplace to one of global proportions. Benny Nachman, the CEO of Credorax, has confirmed that more than 30% of global online sales involve multinational buyers and sellers. The global commerce potential is massive, but there is a looming issue in the area of payments. Traditional payments, be it via banks, credit cards, or other electronic means, have simply fallen short when it comes to B2B payments (fraud, loss, data, real-time, push payments, etc.). Even B2C payments have been plagued with issues around buyer/seller identification (fraud, loss). With the influx of electronic payments and the increased recognition that cross-border payments must become faster, safer, and smarter to support what is now global commerce, consumers and businesses alike are looking for solutions for payments. However, the changes required to go online present drastic changes to enterprise operations, which may quickly become obstacles if not integrated and adjusted correctly.
Traxpay was formed for exactly this purpose – to transform the way that businesses pay and get paid. To enable real-time, 24/7/365 B2B transactions and electronic payments for B2B, including rich data, on a global basis, and with full transparency between buyers and suppliers. We believe that the continued growth of B2B e-commerce segment will depend on faster, safe, smarter payments, and we’re proud to be a pioneer in this area.