B2B E-Commerce- Unlocking The Potential Of Tier-II & Tier-III Cities Of India

Rohan Raj Barua is the Co-Founder of Expand My Business a B2B full service marketplace for all the digital needs of a business. Rohan leads vendor/client onboarding and engagements within Expand My Business.

B2B e-commerce in India gained attention with IndiaMart being introduced to the market in 1996. With internet costs and smartphone prices gradually dropping, the B2B e-commerce sector penetrated the Indian consumer base and procurement sector efficiently. The procurement only from MSMEs in India made by the government amounts to a total of Rs. 23,424 crore for the financial year 2020-2021. The statistics hint at how the B2B sector witnessed growth with MSMEs from the smaller cities of India as businesses shifted to the hybrid model after 2020.

B2B e-commerce has seen a rise in unique businesses creating online stores. Businesses are not shying away from using omnichannel support and creating an online-offline mix. Selling platforms are seeing more than 200,000 small businesses from tier 2 and tier 3 cities that are coming up post the lockdown.

According to research by McKinsey and Company, 68percent of B2B decision-makers in India found omnichannel sales to be more effective than previous sales models

The growth does not come unanticipated but has been a catalyzed reaction to many factors being utilized by the industry.

Ease of access
With all B2B service providers under the same roof, it has changed how services from a business can be procured. Online catalogs, quotations, and comparisons with different service providers for a particular need and choosing the best service provider has become hassle-free with platforms offering them in a compiled and AI-driven database.

Automation in Operations
With AI and data analytics is used to list services, tailoring the right market size, and suiting according to the individualistic service portfolio has become possible. This brings up options that benefit budget allocations and also provide clients in the required expert domain.

Innovated services
Businesses today are probing the turbulence to offer seamless experiences to the changing requirements of the industry. B2B SaaS players have enabled features such as ‘live commerce’ that have changed how buyers access services. B2B businesses thus become able to serve a multitude of clients with different service portfolios simultaneously while monitoring their performance to the client keeping the quality uncompromised.

Greater options
A greater amount of options brings businesses the ability to strike a deal with one that can deliver services matching the exact requirements. With the market enlisting all possible clients simultaneously, businesses are able to verify an ample amount of service vendors that have the same expertise and skill-set before deciding on one. With segmentation and services profiling done with automated interventions, B2B platforms ease services procurement.

Borderless transactions
Digitization has zeroed the effect of geographical restrictions and has enabled businesses to provide and access services even in tier 2 and tier 3 cities. Service providers from smaller cities can offer them to counterparts in the same cities, making the process more cost-effective and revenue-driven. Businesses in the metro cities will also see procurements from efficient vendors in these smaller towns that earlier went unnoticed.

Omnichannel support
According to research by McKinsey and Company, 68% of B2B decision-makers in India found omnichannel sales to be more effective than previous sales models. With business models entering hybrid models to execute functions, businesses are not shying away from exploiting their digital presence. Social media channels, Virtual Reality and Augmented Reality support, and access to an offline and online mix present the user with an interaction-oriented experience.

As per the data by the Ministry of Statistics & PI, the share of MSME Gross Value Added at current prices for the year 2018-19 and 2019-20 happen to be 30.5% and 30.0% respectively, which can be expected to grow to 30 to 35% by the year 2022. The presence of tier 2 and tier 3 on digital platforms also brings them the possibility to access the growth projected in the market.