Most people I meet have the same question: While we observe several startups expand into a competent market vs a well-educated (about e-commerce) consumer, what really is the next big thing in Indian e-commerce?

The answer lies right there in the question itself. Although B2B e-commerce doesn’t garner the same buzz and attention of its B2C counterpart, it already accounts for more revenue – $600 B. And is growing faster, as well – 25 percent in 2015 vs. 13 percent for B2C. At this significantly galloping rate of growth. The cycle follows a more or less regular pattern where the consumer facing e-commerce sites lay the foundation, acquire user base, expand, receive funding, acquire and get acquired. So the next big thing is really a repeat of this in B2B segment.  Estimates speak about USD 300bn market in Indian Market. This is bound to double by 2020. As ordinary consumers, we do not see much action on the B2B segment, however it is already in making. Best-in-class B2B e-commerce companies that have already made adjustments to adhere to the new paradigm are growing and innovating so rapidly that they’ve already pulled far away from their competitors. In fact, they’re about to lap them. Amazon has just launched for Bangalore. Tata has launched for selected cities. Staples and Walmart also launched their B2B avatars in India. Let’s just say that the journey has just begun.
What are the factors contributing to this?
  1. Increase awareness and confidence: An average Indian user has more knowledge and confidence about shopping online. (Thanks to all the advertisements). Now even a business user will not find the idea of online shopping piquant.
    consumer_confidence (1)
  2. Established Packaging and Shipping processes: Most of the new entrants have already invested heavily in Packaging and shipping processes. So now moving to B2B is a logical extension.
  3. Proven B2B segment: With Metro Cash and Carry and Walmart, the concept is proven.
  4. No FDI limitations: Since the FDI limitations does not apply to B2B segment, there is no reservations by Government.

What will the landscape be like?

However, the landscape of B2B will be completely different from the B2C segment. There are established players like with existing clientele. For the new entrants, there are segments which are easy to enter. First, stationary, office supplies and items which are regularly used are the easiest and are highly competitive. Staples, Walmart, Metro will play in this segment. All of them maintain deep pockets and established processes. It will be interesting to see if Flipkart will join the race in this segment. Then comes areas like office furniture and electronic appliances. This will be an area which is open for now and will be a good battle field for all these players. Third comes the niche segments of production-line or engineering needs. This segment includes ordering machine parts, nuts and bolts, tool kits. This will be the most complex game arena. Here,  there is a demand for companies to expand and dig deep. Some players like Tata B2B is already foraying into this segment. My belief is slowly even Amazon and Walmart may compete in this segment. Playing in this arena will give them an edge over competition and better margins.

But the good news that it’s not too late to be build  your B2B store. On your mark…

I’m going to be writing more on the challenges of building a B2B store. You can read more about it here.

Mark your calendars for 1st Sep, 2015 as Kuliza will be at the iMedia Summit for an all exclusive workshop ‘How Technology, Design and Product mindset can help retailers create smart e-commerce stores’. Don’t forget to register yourself! Kuliza builds world class digital products for commerce & media centric businesses.