An article from WSJ highlighted the massive yet relatively overlooked world of B2B ecommerce. From the journal:
E-commerce sites that aim to help old-line industries find new customers, streamline sales and improve profit margins have proliferated and become among the hottest bets for venture-capital funds this year.
It’s important to remember that the world’s largest ecommerce company is not in fact Amazon or Ebay but Alibaba. Why is this important? Because Alibaba is largely B2B; connecting the myriad of Chinese manufacturers to the rest of the world has created a giant with a GMV of $250 billion in 2013.
Put simply, B2C is a big market but B2B is in another league. But that’s not all because B2B has been far less penetrated by ecommerce than B2C. By most estimates and unlike B2C, this is a market with lots of room to grow.
And here’s more reasons why it’s attractive to investors:
This is another reason that investors like these B2B e-commerce startups. Their spending on customer acquisition is only about 10% of that of e-commerce startups targeted at consumers, and their customers usually stick around.
Do you sell B2B? If not, why not?