The B2B landscape finds itself on the cusp of a new, digital era. And with the news Thursday (June 6) that eCommerce platform Alibaba has launched a new B2B-focused marketplace solution, Alibaba Guaranteed, embracing the future of digital procurement is top of mind for buyers and suppliers across industries.
That’s because while traditional B2B procurement often involves cumbersome paperwork, lengthy negotiations and a multitude of emails and phone calls, digital B2B marketplaces instead provide centralized platforms where businesses can search for products, compare prices and place orders in a matter of clicks. This reduces administrative burdens and allows procurement teams to focus on more strategic tasks.
“Global sourcing can be a complex process with many moving parts, but Alibaba Guaranteed can help SMEs (small- to medium-sized enterprises) navigate it with greater ease. With much of the leg work being done for SMEs by the platform, cross-border trade can be as simple as purchasing a pair of shoes from your favorite retailer online,” said Kuo Zhang, president of Alibaba.com, in a statement.
“Alibaba Guaranteed marks an exciting new chapter for SMEs and global sourcing as it will help to redefine the fulfillment standard of B2B cross-border trade,” Zhang added.
As the digital revolution continues, businesses that embrace B2B marketplaces may find themselves better positioned to thrive in the competitive and fast-paced global market.
Read more: Flexibility and Choice Move B2B Payments From Monolithic to Modernized
Of course, as B2B procurement goes digital, B2B payments will have to follow suit. That’s why commercial players that have already started integrating modern B2B payment solutions will find it easier to capture market share and create competitive moats across the global stage.
PYMNTS has long been tracking the rise of digital B2B marketplaces across various industries, even including the U.S. government. And nine in 10 small- to medium-sized business (SMB) owners surveyed for PYMNTS’ “AP/AR Quick-Start Guide,” a collaboration with Plastiq, report that all-in-one payment platforms for B2B transactions can save time and drive third-party convenience.
And B2B marketplace success rests on meeting both supplier and buyer needs with digital solutions that are focused on settling payments transparently and securely, while offering unparalleled efficiency, cost savings and strategic advantages for procurement teams.
Borrowing elements from B2C platforms like advanced search filters, product specifications and user reviews can further enhance the decision-making process, ensuring that businesses can procure high-quality products that meet their specific needs.
Many B2B marketplaces also provide tools for bulk purchasing and long-term contracts, which can lead to significant cost reductions. By leveraging these tools, procurement teams can optimize their spending and achieve better budget control.
As PYMNTS reported in March, FashionGo launched a solution for buyers on its online B2B wholesale marketplace for the fashion industry, meeting the needs of wholesale buyers with dynamic net terms and payment options that adjust to each buyer’s profile and needs.
“Many folks don’t want to buy from 30 or 40 different vendors. They want to be able to consolidate that with a few vendors, as few as possible … To differentiate ourselves, we have to make it truly seamless to buy, and to have a pricing structure that is completely transparent,” Dave Haase, president at ChemDirect, told PYMNTS in a conversation posted last November.
PYMNTS Intelligence has found that new solutions like buy now, pay later (BNPL) could help small businesses overcome the complications common to B2B payments. BNPL offers many of the same benefits for B2B payments as it does for individual consumers, according to the PYMNTS Intelligence and Splitit collaboration, “Is BNPL the Next Driver for B2B Growth?“
Read more: B2B Virtual Cards Move Buyer-Supplier Relationships From Manual to Meaningful
Still, one crucial consideration for B2B marketplaces is to ensure that their know your business (KYB) programs are airtight to defend against fraudsters looking for an easy mark. Beyond that, creating a borderless B2B commerce platform means understanding the local nuances and compliance and tax requirements for each border.
“Everything’s going more cross-border and getting regulated, so tax compliance regulation is huge for new business models in new markets,” Kevin Akeroyd, CEO at Sovos, told PYMNTS.
And new PYMNTS Intelligence finds that, when it comes to cross-border payments, blockchain solutions could potentially offer advantages over traditional systems. That’s because blockchain’s high throughput, low fees and 24-hour availability could remove much of the friction of cross-border transactions, making each one as easy as sending a Venmo payment.
As Sovos Chief Technology Officer Eric Lefebvre told PYMNTS, “[The] next horizon over the next five years is truly in B2B and driving those changes … this is the calm before the storm… The next five to six years [are] going to be a massive change agenda for large manufacturers distributors that are operating in multiple countries … The payment methods, the compliance environment, ERP, the level of sophistication around automation — and that’s where payments modernization will have an impact.”
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