A guide to B2B e-commerce in India

In this article, we will provide you with a guide to B2B e-commerce in India. We will provide an overview of the Indian B2B e-commerce market, highlighting key data and projections. We will also highlight the key drivers of B2B e-commerce in India, along with the most popular categories and top e-commerce platforms.

We will conclude by discussing the benefits of trading globally on a B2B marketplace such as Alibaba.com, and how it can help wholesalers, manufacturers, and exporters.

Let’s start off by discussing the B2B e-commerce market in India and looking at some data on growth, trends, and forecasts.

Overview of the B2B e-commerce market in India

Being one of the biggest economies in the world, India is set to be the next big market for B2B e-commerce, with large entrepreneurs pouring in resources to leverage it.

During the pandemic, conventional supply chains that served Indian businesses were disrupted. Access to capital and financing became extremely difficult, giving opportunities to B2B e-commerce players to step in and help enterprises that were running out of raw materials and industrial products. 

"India's B2B e-commerce market is one of the fastest-growing in the world, and is expected to reach over US $1 trillion by 2024," said John Curtius, a partner at Tiger Global, which has invested in several Indian B2B platforms.” ¹

Over the past two years, adopting a digital and automated supply chain ecosystem through platform-driven methods has become key for business growth for manufacturers, traders, dealers, wholesalers, and small retailers. Such growing digital adoption by Indian consumers presents a lucrative opportunity for B2B startups," John Curtius added.¹

The way India's B2B sector used to function has been transformed by technological advancements. Indian companies are increasingly investing heavily in new technologies such as Artificial Intelligence (AI), Big Data, and virtual reality (VR) in order to give better services and solutions to their customers.

Indian B2B firms are providing world-class services and business tools to enterprises all around the world by creating solutions that meet global standards. In reality, India's B2B sector is booming, with Indian B2B firms accounting for 43% of Indian unicorns.²

The digital transformation of organizations, including corporations, financial institutions, hospitals, small businesses, government, and others, has been attributed to the B2B industry's present success in India. Every startup is adding efficiency to the B2B supply chain, leveraging rich data and automated processes.

Let’s go into more detail on what's driving B2B e-commerce in India.

Key drivers of B2B e-commerce in India

In recent years, India's expanding digital penetration has made e-commerce a particularly profitable retail choice for enterprises across the nation. As a result, India is a key trading hub for companies looking to explore import, export, and local selling prospects in the area.

Here are some of the top factors driving B2B commerce in India:

1. Growing use of mobile phones

One of the major drivers propelling B2B e-commerce growth in India is the increased usage of mobile platforms which are providing app-based solutions for customers’ problems.

Smartphones are outpacing feature phones and are expected to exhibit massive growth in the coming years. The widespread adoption of smartphones is being propelled by several factors such as high competition leading to low prices, the prevalence of internet-enabled services, and ease of accessibility to content.

According to a report by venture capital firm KPCB, India has the highest share of mobile-based e-commerce sales globally at 41%.³ Leading e-commerce companies state that almost 70–75% of their online traffic comes from mobile phones, thus higher revenues are coming from mobile apps.

2. Digitalization

Another key driver is the development of Artificial Intelligence and machine-learning algorithms to identify buyer behavior and segmentation of categories. The capacity to fully track the business is one of the most crucial features that distinguish AI-powered businesses from traditional ones.

Traditional business models are being replaced by AI-powered business models, as AI-powered businesses can fully track a business. The owners of the business know precisely what their consumers want, where they're from, what age group they're in, what they've previously purchased, and what their preferences are.

To the conventional world, data mining and harvesting were uncharted territories, and analysis was rudimentary. Then came AI, which presented the huge potential for companies to develop data-driven strategies. You can now reach out to customers on a more personal level, enticing them with things that might otherwise be lost in the shuffle on an overcrowded online shelf. You can learn from historical data to forecast future results.

AI provides businesses with the opportunity to construct their own world, which would have been unattainable for most in the old retail industry.

3. Social media marketing

With machine-learning algorithms and the use of AI being predominant in analyzing and identifying customer behavior, this will facilitate further categorization for social media marketing and analytics, which will give a clear picture of the current traffic and ways to improve it. It will be of great importance to increase user penetration and reach as many customers as possible.

When thinking about social media from a B2B e-commerce perspective, it is all about targeting people who are clearly interested in solving the problem that’s being talked about. Focus on how you can position your company as understanding the issues faced by your prospects — the fact that you ‘get it’ — and therefore can help them.

In marketing, everything requires thorough analysis. To know what’s working and what’s a waste of resources, you’ve got to measure and analyze. There’s just no way around this. Yet, social media is often perceived as the niche where analysis is not feasible. It’s seen as too vague and too subjective.

Social media analytics exist to challenge this belief. Structured or unstructured, the data that social media owns is extensive and priceless. You can find the data on anything on social media, including your market and your audience, and it’s only logical that analyzing this information will improve your decision-making process.

4. Increase in local B2B e-commerce platforms

Indian internet companies are showing signs of organizing this massive market. With many of the Indian startups attempting to digitize the wholesale supply chain in India, the sector will continue to increase as more small business owners use the capabilities provided by eB2B players, such as digital cataloging, online payments, and logistics.

5. Logistics tech solutions

(technologies and solutions helping with supply chain management and optimization of warehousing operations)

B2B logistics startups are offering technology and solutions to satisfy the demands of major supply chain and logistics organizations, thanks to the rising retail and e-commerce segments.

These logistics firms provide every available instrument to give end-to-end optimization, such as supply chain solutions, assurance of timely delivery of items, and monitoring concerns surrounding tracking, shipping, storage, and inventory globally, from warehouse operations to demand forecasts.

India's supply chain sector, which was significantly affected by pandemic-related interruptions, has begun to gain traction as a result of these tech-enabled logistics enterprises.

The landscape is rapidly shifting, and prominent e-commerce enterprises are increasingly turning to third-party logistics providers. By providing online on-demand logistics services, startups are increasing efficiency in the present unstructured intra-city sector.

With entrepreneurs utilizing tech to enable same-day delivery, cost and delivery time reductions, time-window/slotted delivery, numerous payment choices, simplified return logistics, and 24-7 visibility, the use of logistics tech solutions will continue to expand.

Popular e-commerce categories

1. Consumer durables

The consumer durables industry is experiencing a period of growth. The demand for home appliances has grown as people spend more time at home. The majority of consumer durables firms have noticed this potential and are expanding their product offerings to provide customers with additional options. However, in today's consumer-centric world, having the correct product isn't enough. Across all product touchpoints, brands must deliver superior experiences and services.

Because the items in this category are long-lasting, concentrating on the customer's long-term experience can influence brand loyalty. Brands can acquire a customer for life by increasing the lifetime value of their products, which includes items from other categories.

2. Mobile accessories

The pandemic and consequent lockdowns have caused numerous mobile stores to remain shut down. On the other hand, since citizens are staying home and relying on their personal electronics for work/entertainment, the need for accessories is increasing by the day. The demand for accessories such as mobile chargers, charging cables, etc. continues to skyrocket.

3. Apparel

During the unexpected pandemic breakout, the majority of brick-and-mortar garment retailers went out of business. Those that switched to online early enough have not only survived but have even been able to reproduce their pre-pandemic figures.

Through e-commerce, the apparel industry made over US $540 billion in 2019, and is expected to create over US $710 billion by 2022.⁵

This clearly demonstrates the significance of e-commerce in today's business world, and how significant it is for businesses within the apparel, textiles, fashion, and lifestyle sectors.

4. Home furnishing

Home furnishing is one of those product categories that is both trendy and extremely steady. On the whole, this popular category represents items that nearly everyone on the planet needs. Because most of us live somewhere, and whether we rent or own an apartment, we like to decorate our place and make it feel like home.

This is why the global home furnishing market was expected to hit nearly US $700 billion dollars by 2020. As a result, this category tends to be in steady demand, and there is a lot of money to be made.⁶

5. Healthcare

It’s undeniable that the healthcare sector is increasingly expanding, which makes it especially attractive in terms of investment for B2B.

While other sectors generally follow market trends, showing phases of expansion and contraction, healthcare always manages to position itself against the trend to guarantee stable growth regardless of the phase.

For this reason, it’s not surprising to know that the sector is valued at about US $4.2 billion, and is growing at a rate double that of the rest of the world economy, which stands at 3.6% per year.⁷

How B2B marketplaces can help Indian B2B businesses

B2B e-commerce solutions can transform the way companies do business. As B2B sales are increasingly shifting from traditional outbound channels to inbound online platforms, businesses must respond in order to meet their customers’ expectations and remain competitive in the marketplace.

As well as allowing customers to purchase products online, B2B e-commerce solutions also offer numerous benefits for businesses, enabling them to increase sales, optimize efficiency, and reach new customers and markets.

Alibaba.com is one of the world’s largest B2B online marketplace. With manufacturers, wholesalers, and exporters all over the world selling on the platform, you can find or create anything you’re looking for.

Would you like to see how an Alibaba.com storefront can help grow your business? Open a seller account today.