W(H)ITHER B2Bs

CIO.IN,

BY SATYAPRIYA VERMA

READ THIS ARTICLE TO:

  • Know how B2B s are changing the e-commerce landscape
  • Understanding the intricacies in B2B strategies
  • Be aware of what organizations should do to succeed in the marketplace

Do B2Bs have a future, or are they are bubbles waiting to be burst? While the media and researchers offer conflicting views on this, without a doubt the dotcom bust has taken the sheen off net-based business models. New players are now treading a cautious path. But B2Bs are definitely here to stay. What should the players do to remain in the game?

THE PRESS does play favourite … sometimes! Dotcom obituaries (read B2C) have given way to essays on B2Bs. Hardly a day passes when our senses are not impinged with B2B strategies, success stories, disintermediation and the impending B2B doom (boom). Consider what various research and consultant groups have to say.

v Money spent on B2B transaction already surpasses consumer transaction10- 1 (Aberdeen Group)
v B2B is estimated to become a $2.7 trillion worldwide industry by 2004 (Forrester research)
v India has potential to earn revenues from e-business solutions worth $10 billion by 2008 ( Nasscom-McKinsey study 1999)

Double-edged Sword
Unlike B2Cs, B2Bs are better evolved; the technology is more sophisticated and entry barriers are greater. Critical mass is achieved with greater difficulty and business models are more defensible….

…. The greatest opportunity these exchanges offers is for the existing companies as it will not only significantly improve their performance – since in India supply chains are highly inefficient and fragmented -but also help companies in significant ‘supply consolidation.’ Larger suppliers will gain from this consolidation, while many small and complacent suppliers will be pushed out. “It is the SME segment that has gained the most from B2B initiatives. SMEs have not only expanded there business reach across India but are actually generating revenues from it,” says Brijesh Agrawal, CTO,Indiamart.com, an online marketplace that focuses on the SME Segment.

Benefits: Are they for real ?

Industry players believe that the introduction of e-commerce and online exchanges have definitely brought about benefits in more ways than one. Apart from lower running costs, many feel that there is better coordination between upstream and downstream operations along the supply chain. There is also greater transparency when it comes to price, even for equipment and services. With the increased ability to track inventory, companies can now reduce their minimum inventory levels, thus saving storage costs… B2Bs have also expanded in an unprecedented manner, enabling the market reach of both buyers and sellers, even making price negotiations (auctions, discussions, RFQ/RFP, etc.) from remote locations distinctly possible.

Sanjeev Bhat, CEO, Radico Export and Import Ltd. which is listed with Indiamart.com claims to have closed orders through Indiamart worth $100,000 since 1997. “The same orders that took us 30 days to close, we now close within 48 hours,” he informs….