Why B2B Ecommerce Is Now a Necessity
Categories: Member Thought LeadershipBy Alibaba | September 14, 2020 << Back to Articles
While business-to-consumer (B2C) companies have already adopted ecommerce to sell and market their products, the business-to-business (B2B) community lags behind. The industry has historically been an “offline business,” with little use of ecommerce. In fact, of the 5,000 US small- and medium-sized businesses (SMBs) polled for the Alibaba.com U.S. SMB Confidence Survey in December 2019, 56% of respondents started doing business online in the past five years.
Ecommerce was not viewed as an essential acquisition channel. B2B business owners preferred making deals and closing sales offline. The Alibaba.com U.S. SMB Confidence Survey found that 66% of respondents placed or processed orders by phone, and 54% preferred placing or processing orders in person.
Some business owners were early adopters of ecommerce, however, and reaped the benefits. Daniel Rosenfield, CEO of the Florida-based vitamin and supplement company Totally Products, was searching for a way to drive more bulk B2B sales and expand to a global customer base. He began selling his products on Alibaba.com, one of the largest B2B ecommerce marketplaces in the world. Totally Products’ international orders only accounted for 1% of their sales when they joined Alibaba.com. Today, 35% of their sales come from overseas buyers.
Despite 54% of the Alibaba.com U.S. SMB Confidence Survey respondents stating they recognize the impact ecommerce platforms like Alibaba.com can have on their business, many still relied on traditional customer acquisition channels, like trade shows. These business events provided networking opportunities for buyers and suppliers to connect and conduct business together.
The traditional world of B2B turned upside down when the COVID-19 outbreak began to spread. B2B SMBs could no longer continue business as usual. Trade shows got cancelled, brick and mortar shops were forced to close, and supply chains saw the worst disruptions in years. According to a recent survey conducted by the Institute for Supply Chain Management, nearly 75% of companies reported supply chain disruptions in some way due to coronavirus-related transportation restrictions. This affected businesses across all industries — grocery stores could not restock their shelves fast enough, automotive manufacturers shut down due to a lack of parts, and healthcare systems continue to face Personal Protective Equipment (PPE) shortages.
Once COVID-19 exposed the gaps in the B2B world, these SMBs needed a new solution to reach their customers. So SMBs quickly digitized their operations and pivoted to ecommerce. Both suppliers and buyers turned to online avenues to sustain sales and sourcing capabilities. In the month of March, consumers and businesses reported spending up to 30% more online, and in three months’ time, the total use of ecommerce in the U.S. saw 10 years of growth.
The COVID-19 pandemic proved to B2B SMBs that ecommerce is no longer a competitive advantage, but a necessity. Social distancing made the world go digital. Finally, B2B business owners recognized the importance of leveraging ecommerce to not only survive, but to thrive.
Following in Daniel Rosenfield’s footsteps, countless SMBs joined Alibaba.com to sell products online, increase sales, and connect with millions of global and domestic buyers. “Doing business online is the bridge for American small businesses through this crisis and into the next decade,” said John Caplan, President of North America and Europe B2B at Alibaba.com. For that very reason, to better serve B2B SMBs looking to transform and digitize, Alibaba.com released three new services:
- Alibaba.com Freight to ensure secure ocean and air shipping for orders
- Alibaba.com Payment Terms to provide cash flow control
- Alibaba.com Online Trade Shows USA to connect manufacturers and wholesalers with business buyers in an engaging and live online format
These services are designed to help businesses accelerate their digitization with integrated freight, payments, and marketing solutions. But the world of B2B was just one area affected by COVID-19. Shortages of Personal Protective Equipment (PPE) continues to challenge the U.S. and the world at large. The increasing number of positive cases left hospitals, healthcare facilities, and hospitality groups severely lacking the necessary equipment to protect their employees and patients. Every country has their own set of requirements for exporting and importing products. These regulations change frequently and vary by country. The U.S. Food and Drug Administration (FDA) is responsible for regulating imports of medical equipment and PPE to ensure the products are intended for medical use. These changing regulations, combined with severe supply chain disruptions, made sourcing PPE a grueling task.
As part of support for COVID-19 relief PPE sourcing, Alibaba.com fulfilled rush orders for over 30 million pieces of PPE. Alibaba.com Select was launched as a result of the PPE supply chain challenges. A one-stop solution for convenient global sourcing buyers can trust, Alibaba.com Select is powered by superior supply chain networks, providing reliable delivery services, payment and order protection, inspections, and more. Healthcare systems and B2B SMBs are facing extraordinary challenges with the disruption of COVID-19. But with these challenges comes the next era in global trade. The Alibaba.com platform is here to make it easy to do business anywhere, at any time. Whether you’re looking to increase sales and meet new customers online or sourcing PPE to operate safely, Alibaba.com has what you need.
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 “Beat the rush — get your B2B business online now,” Alibaba.com, February 18, 2020, https://activity.alibaba.com/ggs/beat_the_rush.html
 “75% of Companies See Supply Chain Disruptions Due to Coronavirus,” Supply & Demand Chain Executive, April 14, 2020, https://www.sdcexec.com/transportation/press-release/21128379/institute-for-supply-management-ism-75-of-companies-see-supply-chain-disruptions-due-to-coronavirus
 “Covid-Consumers: Pessimistic, but spending more online,” Search Engine Land, March 25, 2020, https://searchengineland.com/covid-consumers-pessimistic-but-spending-more-online-331519
 “Five Fifty: The quickening,” McKinsey & Company, accessed August 21, 2020, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/five-fifty-the-quickening
About the Author.
Alibaba.com is an international B2B wholesale ecommerce marketplace that helps distributors, manufacturers, wholesalers, and other suppliers to tap into a network of more than 20 million business buyers. For more information on how Alibaba can help your business, contact Selena Singleton at email@example.com.