In an increasingly connected world its surprising that millions of small and medium enterprises are still unable to benefit from the fruits of online commerce by getting on B2B platforms. Misplaced fears about high costs of going online and comfort levels in their limited home markets (which they mistakenly believe will stay forever) override opportunities that can help Small and Medium Businesses (SMBs) build brands, scale business, access new markets, improve their products and get customers far beyond their catchment areas.
Sure, anything new is never going to be easy. But the fact remains that where millions have feared to tread, there are millions of others who are benefitting from being on B2B marketplaces. A 2017 study published by Google and KPMG found that small businesses in India with their web presence grow their revenue twice as fast compared to those who don’t have. Most of them leveraged the power of B2B marketplaces to take their brands and businesses to new markets and customers. The study titled `Impact of internet and digitization on SMBs in India’ also revealed that 51 per cent of digitally enabled SMBs were able to sell to customers beyond city boundaries in comparison to just 29 percent of offline SMBs in 2016.
So, a supplier based in Guwahati can sell to a manufacturer in Coimbatore or even Germany. That’s the power of B2B marketplaces. For example, Dewan Chand Om Prakash, a wholesaler based in Chawri Bazaar (Old Delhi) has seen business grow 15 percent after joining hands with Moglix, a B2B commerce platform.
SMBs who often fear large corporations can actually both partner with the big boys — by becoming a supplier, or even compete with them for business when on B2B marketplace which create a level playing field for all.
The SMBs or suppliers can reap the multiple benefits by associating with B2B platforms and marketplaces for instance one can get access to newer markets and buyers; exchange insights with the suppliers on what’s trending in the market, pricing, preferences that can help them understand the market better and plan their products and offerings accordingly. All this may come at a fractional minimal cost and even free in some cases if they register with a B2B portal as their supplier.
B2B marketplaces can even automate the entire purchase cycle, such that SMBs can track their POs and goods on real-time basis. Through this, suppliers can ensure automatic reconciliations and GST compliance and leading to better operational efficiency and return. The B2B players also help solve the working capital issue in terms of timely release of payment to the SMBs in addition to providing them access to the clients that would have been out of reach otherwise. Not only this, majority of the B2B commerce portals have a structured e-catalogue of the products with detailed specifications which can help the SMBs in serving the clients better with clear understanding of the requirement and therefore, face much lesser rejections.
India has about 50 million SMBs employing 120 million people. These SMBs account for 37 percent of India’s GDP but an overwhelming 68 percent of the SMBs don’t have a presence in the digital world. As they are becoming compliant to new regulations like Goods and Services Tax (GST), it’s surprising they are not leveraging the power of B2B platforms like Moglix, which specializes in industrial products, like MRO, fasteners, electrical equipment, hardware, pneumatics, safety items and more. The technology platform helps match demand and supply through price discovery and product availability.
It can make a game changing difference to SMBs. Large companies with their extensive networks, awareness and resources are taking advantage of e-markets and look for new suppliers online. The ability of such B2B marketplaces to facilitate discovery and trading much beyond regional and geographical boundaries at very low costs and irrespective of size create a level playing field and a multiplier impact on business outcomes.
While this helps SMBs to get to new markets it also exposes them to threats of unknown global competition. Here, instead of looking at the downside SMB entrepreneurs should look at the potential upsides. Competition can only improve their product and strategy. And if they choose to skip, the buyer or supplier even next door might be taking advantage of the platform to grow their business. So ignoring B2B platforms is not the best of strategies.
Take for example Industrial Engineering Syndicate which is into trading activities in India, Nepal, Bangladesh and Bhutan has seen business increase 20 percent since being on Moglix over the last three years. It’s also able to respond to customer requirements in real time.
There has been a 500 percent increase in Indian products offered on marketplaces in India. Currently more than 30,000 sellers from India are a part of platforms that help them gest customers from markets as diverse as Japan, Australia and USA. Some SMB entrepreneurs might feel its late now to get online. That’s the beauty of marketplaces – a new SMB can compete with peers and global suppliers anytime as it’s a level playing field. But yes, they do have to, and must, take that first step to get on the B2B marketplace platform.
Reference for data on SMBs: https://www.cnbc.com/2017/01/09/google-wants-to-get-more-indian-businesses-online.html