Companies can’t keep up with supply chain issues. At the same time, less than a quarter of businesses say they have successfully modernised their order management operations, according to a recent study by Genpact and HFS Research.
Against the backdrop of fast-changing demand patterns and high inflation, business leaders are taking stock of the inherent difficulties of the existing procurement process, from sourcing new products to building relationships with new international suppliers.
Strong procurement is vital for business health
Whilst the general business response has been to hire more supply chain managers, less attention has been paid to improving supply chains. According to the Department for Business and Trade’s national survey, only 3% of businesses view improving or refreshing their supply chain as a way of growing over the next 12 months, a one percentage point decrease year-on-year.
While not a fix for all their problems, businesses that strengthen their procurement process will build more resilience and create a competitive advantage.
Adopting new technologies for B2B buying is one of the simplest and most effective ways for businesses to improve their procurement process. And to do that, online B2B marketplaces should become the channel of choice.
Benefits of using online B2B marketplaces
Wunderman Thompson reports that 49% of B2B buying in the UK is now online. Despite their popularity, though, online B2B platforms and the quality of services they offer are lagging compared to their B2C counterparts. The same study reveals that 89% of B2B buyers in the UK find buying online more complicated than offline, with 52% frustrated with the online buying experience.
But, modelled on their B2C counterparts, online B2B marketplaces are undoubtedly helping to revolutionise the B2B buying experience. At their core, they serve as a meeting ground for millions of buyers and hundreds of thousands of sellers to connect with one another.
One of their major benefits is that they streamline the entire buying process: with the click of a button, buyers of wholesale goods can browse, explore and discover products from suppliers around the world.
In addition, they help businesses with some of the challenges of day-to-day operations, enabling them to operate in the broader global market without the need for huge resources. And, as well as helping to overcome challenges, McKinsey and Company’s latest global B2B Pulse survey shows that B2B enterprises which use online marketplaces experience an average of 20% revenue growth and a 25% increase in profitability.
What’s more, time is a valuable commodity for all businesses, and marketplaces can offer a huge range of products to browse through, from global suppliers, without needing to spend precious time travelling.
Innovative technologies are turbocharging the online procurement process
To make B2B buying even smoother, online marketplaces are using new technologies.
This comes as findings from Wunderman Thompson reveal that 67% of global B2B buyers wish that B2B sellers online were more innovative in how they used digital technology to improve the experience and a similar percentage (69%) said that if a B2B supplier is digitally innovative, they are more likely to buy from them.
Live-streaming, for example, continues to be a popular technology used by ecommerce platforms. It is a great way for buyers to get to know a supplier, showcase the benefits and quality of their products, tell the story of their operations, and foster relationships based on trust and transparency.
In addition to live-streaming, virtual reality and augmented reality factory tours allow B2B buyers to get up close and personal with a supplier, look around their factory and ensure it meets their own standards – all from the comfort of their own office. The use of such technologies has removed the need for long and expensive trips overseas in search of new suppliers.
Finally, smart technologies are increasingly being integrated to make searching for products as simple and easy as possible for buyers. Examples such as Alibaba.com’s Image Search feature acts as a picture-led discovery channel. Users can submit a picture of any product, which is then instantly cross-checked against more than 200 million products from 200,000+ suppliers around the globe. This efficiently enables businesses to shop around for the best deals and drive margins.
While online B2B marketplaces aren’t a silver bullet for the challenges buyers face, they do level the playing field for B2B buyers of all company sizes and with varying levels of spending power.
Most importantly, they offer a plethora of opportunities to help businesses connect and deepen their engagement with suppliers, build resilience and capture growth opportunities.
Roland Palmer is general manager of UK, Benelux and Nordics at Alibaba Group