There is no gainsaying that our current Covid-19 ridden world is a far cry from our previous experiences. We have witnessed stark contrast between the pre-Covid 19 eras and the present world. For instance, the traditional mode of B2B trading was more prevalent before the pandemic, but now, virtually all sectors have been digitized. Also, prior to the pandemic, B2B foreign trade was carried out traditionally via physical meetings and physical exchange of goods and services.
However, the surge in the disease transmission rate has forced many individuals and businesses to switch to online e-commerce in response to lockdown and social distancing.
This article examines the impacts of the coronavirus on B2B foreign trade. It also assesses the buyers’ and sellers’ responses, especially regarding transitioning to e-commerce, the only sure means of transaction in a hugely uncertain global environment.
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B2B international trade or B2B Foreign Trade entails the exchange of goods and services between businesses from different countries. This trade may involve a company supplying raw materials to another company. The buying company then processes them into finished products. Other times, this transaction can involve a company taking the place of wholesalers while the other company acts as a retailer.
The traditional modes of carrying out B2b foreign trade involve manufacturers across several countries reaching out to each other and organizing physical meetings to close deals. It also includes the import and export of products that might be cost-intensive. Apart from being physically exhaustive, these exhibitions and travels pose risks from accidents and other unforeseen occurrences.
According to research, the global b2b e-commerce was reported to be USD 6.64 trillion in 2020. It is forecasted to reach a compound annual growth rate (CAGR) of 18.7% between 2021 – 2028.1. The COVID-19 pandemic triggered a shift in consumer preference for online shopping, creating avenues for growth. Moreover, an increase in orders, consumer behavior changes, supply chain disruptions, and closure of physical stores have impacted the B2B e-commerce business outlook. Furthermore, due to COVID-19 restrictions and government closure of international flights, countless exhibitions and live events were canceled, with many b2b businesses adopting online inquiry-live broadcast order placement. While retail sales dipped in 2020, e-commerce sales skyrocketed.2 Numerous B2B businesses are now focused on moving their customer online.3
We highlight the advantages of b2b e-commerce for foreign trade over the traditional model of selling:
With e-commerce, not only can you reach more customers, but you can also easily take advantage of a computerized cross-sell and up-sell recommendation program. Besides, you will be more positioned to provide relevant suggestions to customers on the portal or application and motivate them to purchase related items or items with better features and functionality.
Another advantage of eCommerce is that B2B businesses can leverage online traffic to conduct customer analytics. Data variables like page views and time spent on pages can be reviewed via the backend of the e-commerce platforms. These variables help business owners to recognize shoppers’ habits and show the businesses different areas to improve, hereby optimizing sales.
A B2B e-commerce system with customer-facing catalog pages is a seamless way to enhance one’s customer base. As B2B buyers head online to find the best prices, manufacturers, and distributors can grasp the power of the search. In addition, e-commerce platforms maximally utilize search engine optimization to create a better experience for their users.
Choosing B2B e-commerce is a more viable option as it reduces certain costs. For instance, the Internet lowers expenses for buyers and sellers in the B2B space. For a buyer, it is more seamless to search for products online from the comfort of your space without moving an inch; the same goes for the sellers who can reach a wide range of customers at a cheaper cost. Likewise, e-commerce trading has dispensed with intermediaries in the business chain as the buyer relates to the customers directly. Thus, payment for such intermediaries is removed from the total cost.
E-commerce has evolved in many ways; for example, Alibaba enhances periodical technological advancements to provide a stress-free experience for their customers. Presently, B2b sellers and buyers can access these platforms on their desktops, laptops, and smartphones within seconds. Imagine getting all required goods and services just by a swipe of your phone; that is convenience at its peak.
Most e-commerce e-trading platforms have paved the way for faster and more effective ways of making payments on their platforms. Options include wire transfer, debit, or credit card. Worthy of mention is Alibaba Trade Assurance which holds money in escrow till an order is delivered, and the customer is satisfied with the product.
Staying in touch with customers using traditional b2b methods was a Herculean task mainly because the distance was a major barrier; the story is different now with the help of e-commerce. Now, buyers and sellers can interact with each other on the go. For example, at Alibaba.com, the algorithm is programmed so that buyers and sellers can get access to each other’s contact and be able to communicate without hassles no matter the distance.
It is now a popular saying ‘that the world is now a flat board.’ This emanates from the influence of the Internet and enhanced communication. This is absolutely true, and that is the experience e-commerce offers. You can be a foreign manufacturer interested in the Japanese market. If you’re a company based in South Korea aspiring to sell overseas, you can benefit from a top leading and widely accepted e-commerce platform to improve your profitability. The apparent strength of e-commerce is that there is no closing time. Your customers or consumers may be anywhere on the globe, in any time zone, and shopping at any hour. You make money even while sleeping.
B2B eCommerce has, to a great extent, solved global logistics problems. At Alibaba.com, we comply with all relevant laws relating to customs and excise duties. By doing that we have eased our customers the burden of worrying about the haulage of their goods. Also, sellers are not afraid to follow the due process because we have covered it. Our Customers simply pay for the goods and related customs duty once they receive their purchase.
Despite that online selling outperforms offline shopping in many ways, there are certain aspects where the latter trumps the former. Some include personalized attention from salespersons, instant order processing – no need to wait for delivery and quick return. However, leading e-commerce platforms like Alibaba.com have made a concerted effort to compensate for offline shopping and selling advantages. For example, an automatic online reply is enabled when sellers set up their stores. Also, you can run your store in multiple languages, eliminating language barriers. Additionally, with Alibaba.com, you can perform live broadcasts to assure your customers of safe goods.
Time is changing, with new variants of coronavirus to contend with. There’s no doubt that online selling will continue to dominate every form of transaction; even post-covid-19 has many people fully embraced the new normal. As a smart b2b supplier, now is the perfect time to ace your online selling with the help of the largest B2B wholesale marketplaces worldwide. Learn more about why sellers globally are growing their wholesale trade with Alibaba.com? The sooner you grasp that, the better it is for your business or company.
Start by registering on Alibaba now!