Program & Batch:

PGDM 2014-2016

Term:

VI- TERM
B2B Marketing

Course Name:

Name of the faculty:

Dr. Anand Khanna

Topic/ Title :

E-Marketplace B2B

Original

Original

or Revised Write-up:
Group Number:

Contact No. and email of Group

Coordinator:

Group Members

Gaurav Shrivastav:
+91Sl.

Roll No.

Name

140101054

Gaurav Srivastava

140101098

Mayank Shekhar

140101031

Arpan Saxena

140101022

Ankit Agarwal

140201166

Sumant Singh

Madhav Maheshwari

Rajat Agrawal

140101012

Akash Nag Chaudhari

Table of Contents
Introduction.3
Growth of B2B E-Market place Model...6
Government Policies...7
Manpower requirement for E-Commerce B2B player8
1.
2.
3.
4.

The Project Leader....8

The Data specialist8
The customer Adoption owner..8
The Branding and messaging maven .......8

Logistic Requirement in E- Commerce...9

E-Commerce B2B Logistic model.......10
Distribution...11
Challenges for Future...14

INTRODUCTION
2

Indias B2B e-commerce industry will reach $700 bn in the next five years from the existing
market of $300 mn, as per a recent Walmart report.
B2B transactions happen between manufacturers and wholesalers or wholesalers and
retailers. While the B2C e commerce market in India is growing exponentially, the B2B ecommerce market is an upcoming industry preparing to create a mass market in various
segments. Most of the big players in the B2B market like Indiamart, tradeindia.com,
Industrybuying.com employ the marketplace model wherein their primary task is connecting
domestic buyers and sellers through their electronic portal, helping create leads for further
business transactions for both parties.

The online e-marketplace model is gaining acceptance and growing faster than ever before.
Manufacturers, Retailers, Wholesalers, Dealer and business firms across the globe are
transacting through e hubs to fulfil their demand and supply needs in order to take
advantage of reduced cost and increased efficiency that this model offers. Banks have also
jumped onto the bandwagon by

Offering letter of credit for a secure transaction for both parties. This model also facilitates
comparison of quotes for different products and also enables sampling or trials before the
actual purchase of the product.
The emergence of the e-marketplace model has also boosted the growth of SMEs and startups as they are able to connect to buyers from markets across the world through these portals
or source their supplies from wholesalers based elsewhere and sell the finished goods to the
local market.
The three basic market functions performed by B2B E-marketplace model are

Aggregation
Matching
Facilitation

The emergence of the e-marketplace model has also boosted the growth of SMEs and startups as they are able to connect to buyers from markets across the world through these portals
or source their supplies from wholesalers based elsewhere and sell the finished goods to the
local market.
Some of the reasons why Electronic B2B marketplace is achieving wide acceptance in India
are cited below: -

1.
2.
3.
4.

Quicker search and lead generation for both suppliers and buyers.
Marketing and vendor shortlisting cost is much less compared to cold calling mechanism.
Neutral platform to scrutinize and compare different vendors and buyers.
Creates information symmetry between buyers and sellers and defeats the purpose of a
middleman.
5. In-built messaging services provides better traction between parties
6. The Make in India initiative will be greatly benefited as the SMEs will be able to easily
connect to overseas markets to sell their products and also, procure their raw materials at
the optimal cost through the e-hubs.

GROWTH OF B2B E MARKET PLACE MODEL

5

The B2B E-commerce market has seen some action in terms of new start-ups only in the past
3 years. Hence, this is still a nascent market which is yet to experience exponential growth.
Countries like the US and China have seen many success stories like Amazon, Grainger,
Tolexo and Alibaba in this space over the years. According to a Forrester report, by 2020, the
global B2B e-commerce market will be double that of B2C, out of which China is expected
to become the largest contributor with $2.1 trillion in sales in 2020. At the end of 2015, B2B
e-commerce sales are supposed to reach $780 bn which will be close to 10% of all B2B
transactions. B2B transactions, globally, dominate B2C, accounting for close to $15 tn in
2013. More than three quarters of this figure can be attributed to sales in the US followed by
the UK, Japan, China.
India has seen a meteoric rise in popularity of B2C firms while B2B E-sales has just started
to pick up pace. The security and trust issues were the primary hindrances to the growth of
the B2B market, taking into account the enormity of the sums of money involved in the
transactions.
In recent times, the widespread growth of internet connectivity and the e-marketplace model
along with trends like the accelerated tech product obsolescence has created a well-informed
and emerging B2B marketplace. The success of players like Amazon, Alibaba, Grainger etc.
has been somewhat emulated in India by Tolexo which has seen double digit revenue growth
over the last couple of years. This B2B model will provide huge benefits to the SMEs in India
as well as giving a fillip to the Make in India campaign of Prime Minister Modi.
Alibaba founder Jack Ma has also discussed the suitability of the B2B marketplace model for
the Indian market and Ma has responded in the affirmative. He expects a huge boost to Indian
exports with the acceptance of this model just like what has happened in China with the
Indian SMEs products along with handicrafts, organic farm goods being taken to the global
market.
The emergence of app and web based marketing will further increase the potential of this new
industry.
The distribution mechanism consisting of wholesalers, retailers and distributors in India is
highly unorganized with very high information asymmetry. Hence, there is a huge potential
for technology based platforms in these sectors which assimilates all purchase related
information in one place and also, offers a plethora of payment options.
International B2B players such as Amazon (AmazonBusiness) and Walmart (BestPrice.in)
have already started their B2B operations in India which has also seen the establishment of a
number of startups like BazarA2Z, StoreRoom.in along with the existing players like the 15
year old IndiaMart and IndustryBuying.com.

The major B2B websites in India are listed as follows: 1. Mjunction.com

6

2. IndiaMART.com
3. TradeIndia.com
4. India.Alibaba.com
5. Made-From-India.com
6. TATAB2B.com
7. B2B.Sulekha.com
8. India.TradeFord.com
9. ExportersIndia.com
10. JimTrade.com
11. IndiaTradeZone.com
12. IndianExporters.com

GOVERNMENT POLICIES
As per existing government policy, 100% FDI in the automatic route, is allowed in B2B E
commerce activities. This has led to the influx of capital from venture capitalist firms like
SAIF partners, Intel Capital and Bennett & Coleman into e-marketplaces like Indiamart,
IndustryBuying.com etc.
Amazon has opened up its B2B operations in April 2015 in Bangalore & Mangalore and plan
to expand to other parts of the country, at the earliest. Walmart has also expanded the reach of
Best Price.in to four more states.
This 100% FDI policy will also promote innovations such as ERP integration, data analytics
solutions and single window buying with the excess capital being pumped in by VCs.
The expected implementation of GST in 2016 could also boost B2B e commerce by making
India a single market with respect to taxation.
The Information Technology Act of 2000 legalized and authenticated electronic transactions
which has significantly increased the number of e-commerce companies sprouting up in
India.

MANPOWER REQUIREMENT FOR E-COMMERCE B2B

PLAYER
7

To have a successful e-commerce marketplace having correct manpower in place is of prime

importance.
The manpower requirement can be divided into four major heads for a high functioning B2B
e-commerce platform
5.
6.
7.
8.

The Project Leader

The Data specialist
The customer Adoption owner
The Branding and messaging maven

1. The Project Leader:The Project Leader is the committed point of interaction for your B2B e-commerce provider.
Conventionally from sales, marketing, or IT, this person will synchronize the moving
fragments of the project, and is eventually responsible for sighting the project through to
success.
2. The Data specialist:This person is most probably a member of the Operations and IT team. The Data Specialist is
answerable for the unique upload and subsequent regular upkeep of your product, customer,
pricing and inventory data management. They will also harmonize and define the process
flow on how inbound orders through the portal will be managed.
3. The customer Adoption owner:This person is believed to be responsible for ensuring customer awareness, initial usage and
user registration of a B2B e-commerce portal. This person should probably be from sales as
he will have the ability to .We suggest this person be from sales or a sales leader who has the
ability to incentivize your rep team to encourage adoption of your B2B E-Commerce portal.
4. The Branding & Messaging Manager:Characteristically from marketing, manager is responsible for the visual aesthetics of a B2B
portal, including the logo design, about product images, and branding by using different
colours. These managers will try and craft customized targeting messaging in both the portals
and related email marketing campaigns.

LOGISTICS REQUIREMENT IN E-COMMERCE

1. Information system:
Primary requirement is having an information system to prepare a database and integrate
all the services.
2. Customer Relationship Management:
It is of prime importance to have a customer relationship management ERP in place to
maintain record of customers and to look for potential customers
3. Purchasing and supply chain management:
To manage the inventory in place and carry out vendor management
4. Sales and Marketing:
To explore push and pull marketing techniques and drive market penetration
5. Point of sales:
To explore different medium of sales like affiliate marketing program
6. Transport Distribution:
Any e-commerce set up should have wide distribution network to ensure quick delivery

E-COMMERCE B2B HAS TWO MAJOR KIND OF

LOGISTICS MODELS TO WORK ON
1. One to one logistic model :9

A point to pint logistics model were a company does procurement of its supplies from varied
supplier through e- purchase order system.

2. One to many model

It makes use of the IT infrastructure by being hosted over the internet with all the buyers,
suppliers and financial institutions which are connected to each other through central hubs

10

Distribution
Rapid growth in B2C e-marketplace over the last few years has paved way for emergence of
B2B e-marketplace in India. While globally size of B2B E-Commerce is far larger than that
of B2C - Indian B2B e-commerce is yet to emerge as a significant force. The scenario is set
to change drastically when a number of industry biggies like Reliance, Tata, Mahindra etc.
enter B2B space - where a clutch of startups are already working. While the ventures of these
corporate houses are preparing the groundwork, the required distribution, logistics and
infrastructure needs are already looked into. With such players entering in a big way, it will
make the B2B e-commerce more organized.

India has very large SME enterprises who play an important role in Indian economy. SME
sector consists of 36 million units manufacturing 6000 products, accounting for over 45% of
total manufacturing output of the country. 40% of gross Indian merchandising export is
executed by these SMEs, who actually provide employment to approximately 80 million
people in India.
However, a big concern is - the way Indian businesses transact with each other is very
inefficient and even chaotic. Distribution channel, the most important driver for industrial
growth, is full of inefficiency and redundancy where layer after layer of intermediaries add
more
cost
than
value,
which
results
in
less
margin
for
manufacturer/producer and retailers. With high distribution cost squeezing the
11

margins available, manufacturers are left with less and less capital to invest in technology,
production, sales and marketing. Hence, the growth in SME sector is minimal - exemplified
by the fact that even though SME sector accounts for 45% of total manufacturing output
employing 40% of India's workforce - SME contribution to GDP is a paltry 17% !

To be successful in India - B2B E-Commerce has to address the inefficiency in physical

distribution channel and offer alternative online platform that tackles the ills of physical
distribution channel like efficiency, better productivity and more margin for both
manufacturer and retailer. No one can deny the value of distribution intermediaries who
would survive even in online world. However, introduction of b2b e-commerce will result in
elimination of redundant layers - ensuring survival and growth of only those layers adding
real value also, in B2B sector, apart from SME government is in itself a very big client. With
e-governance initiatives, a lot of transactions involving government include e-commerce but
they are usually carried out by PSU (Public sector undertakings) or government
organizations. The private business access is still very limited in this space.
Working of B2B E-Commerce marketplaces may differ significantly from B2C as nature and
behaviour of customers are very different. B2C essentially is a consumer market driven by
individuals who buy products for self-consumption.
B2B markets, on the other hand are driven by degree of saleability where retailers/dealers
buy products for re-sale. To be successful, b2b e-commerce players have to understand
market dynamics and create marketplaces that not only offer same degree of flexibility and
comfort that traders have been enjoying in bazaars and mandis for ages - but go beyond and
offer superior values intrinsic to online world. Then only merchants and buyers will flock to
these online platforms and embrace b2b e-commerce.
12

By removing barriers and boundaries, B2B e-commerce lets distributors grow their business
through new channels and approaches. For example, geographical location is no longer as
restrictive. Online commerce is enabling distributors to expand to new markets and connect
with new customers and suppliers. Theres no time to waste. Distributors that dont offer the
kind of e-commerce functionality customers are looking for risk falling farther behind
competitors and losing market share to more technologically savvy rivals.

Distributors know how important after-sales processes are. Top B2B sales support a range of
fulfillment activities and integrate with purchasing, chargeback management, warehouse
management, and financial management processes

B2B E-Marketplace Challenges for Future

B2C e commerce market is growing by leaps and bounds and slowly B2B e marketplace is
also picking up. According to a report by Frost & Sullivan, Globally B2B E marketplace is
expected to be twice the size of B2C market by 2020 and reach to $ 6.7 trillion. China and
US are the leaders in B2B E marketplace globally. By 2020, China is expected to surge ahead
13

of the US and be the global leader in B2B e commerce segment and it will reach $2.1 trillion
in sales by 2020. B2b e marketplace is already double the size of B2C e market in US. From
India specific perspective, According to a study by Walmart B2B Online marketplace in India
is currently at $300 billion and is expected to touch $700 billion by 2020.
With tremendous amount of growth opportunity in B2B e commerce, it brings along with it
its own share of challenges to deal with. Some of the main challenges faced by B2B e
marketplace in future:

1. Building Trust: - Building trust among buyers is a grave area of challenge for the sellers
as industrial buyers are more comfortable dealing in traditional ways.

Online Trust
Market
Marketplac
Technology
Participant
e
Dimension
Dimension Dimension

2. Technology Dimension: - Making industrial buyers comfortable about the technology

aspects of the product, building trust among them that the specification being claimed is
authentic is a very big challenge.
3. Market Participant Dimension: - Several questions haunt the industrial buyers mind
like is the seller authentic, Do they have sound business fundamentals, will they be able
to serve the requirements in time, in terms of after ales support etc. Similar questions pose
a threat to the industrial sellers too. Some of the questions can be is the buyer authentic
and really interested to buy the product, What should be the terms of credit offered and
how should the negotiation proceed, should the seller be involved at all in that particular
transaction etc.
4. Bringing SMEs on Board: - In India, there are currently 47 million small and medium
enterprises and most of them are involved in manufacturing only. In most of the cases,
these small and medium enterprise players are confined in a very small area and serve
only the local market. Moreover these players are largely unorganized. It is a very big
challenge to bring small and medium enterprise player on board and involve them or
persuade them to be a part of online B2B marketplace in India.

14

5. Choosing the type of B2B Model: - There are many B2B models which extend from
single firm-sponsored, e-procurement solutions and consortiums to collaborative
marketplaces where the demand and supply services are aggregated.

6. Complexity in B2B business: - A compared to B2C, business to business market

transactions are a bit complex. The prices are highly variable. The price depends on the
volume and the payment or credit terms negotiated. Tax and regulatory concerns also
impact the sales. These complexities necessities the need for flexible shipping and
logistics solution.

15

7. More buyer involvement: - Since the involvement required in a business to business

transaction is much greater than as compared with a B2C transaction, the complexities are
more. Providing relevant information which the industrial buyer is actually looking for is
a very crucial task. It is said that generally a firms online behaviour or offers and
platforms should be far more superior to their offline platform.
8. Marketing: - Advertising is more mind boggling, as customers need to see how items
function and cooperate with different frameworks they as of now have or are considering
for procurement.
9. Absence of Black Box Effect: - The black box " impact, where a client purchases a
gadget without a genuine enthusiasm for figuring out how it functions, scarcely exists in
B2B, while it is overwhelming in B2C. Consequently, a B2B ecommerce execution is on
a very basic level more intricate than in a B2C situation. While this makes the fruitful
configuration and execution of a B2B e-trade stage more troublesome, it additionally
significantly builds the estimation of that framework, as the issues illuminated are
unreasonable to address utilizing routine means.
Most B2B models are moving far from legacy frameworks that included the utilization of
EDI (electronic information exchange), which were costly and unwieldy to handle,
toward universal and moderate online stages where purchasers and dealers can meet from
anyplace on the planet on the Web to execute merchandise and administrations, utilizing
just standard PC and Internet. This move denote a move from the "one-to-many" model,
where one organization needed to work with numerous suppliers utilizing EDIs, to
"many-to-many," where associations are incorporating their procedures with e-acquisition
organizations and immaculate play online B2B retailers to computerize and encourage the
buy of their products on the web.

16