Indian B2B E-Commerce : time to redefine ‘E’
“B2B Commerce is all set to grow from USD 400 Billion p.a. to USD 700 Billion p.a. by 2020. Being mostly unorganized, it is hence an opportunity for startups & VCs. Let’s quickly insert ‘E’ into B2B Commerce and let the magic unfold the way it did for B2C”.
Is that so simple ?
India has about 40 Million SMEs and they contribute about 37.5% to the GDP. TRAI says that there are about 1.2 billion mobile subscribers and 422 million internet subscribers in India. But, astonishingly 68% of the SMEs are completely offline with only 2% active online.
So, what’s the role of ‘E’ here?
‘E’ has brought convenience and more options into B2C Commerce. Does it have a different set of problems to solve in B2B Commerce? Let’s explore
Lack of transparency, inefficient prices, static market, unpredictable fulfillments (quality, timely delivery, payments) etc. are the second-degree problems stemming from some fundamental problems like:
1. Slow movement of information
2. Information Silos
3. Lack of standardization
4. Lack of contracts
Procurement related information, repayment practices, adherence to delivery schedules, quality related performances etc., are known to parties within a network comprising of buyers, sellers and intermediaries. Within a geography there are many such translucent networks. These networks pose entry barriers for new entrants to get in.
Over 50% of B2B Commerce happens without trade documentation like RFQ, Quotation, PO, Invoice, Delivery Challan etc. Even if one of these is missing, it leads to ambiguity and disputes, making the resolution challenging.
B2B Commerce typically involves multiple people on the buy and as well as the sell side. Lack of co-ordination and slow movement of information/documents leads to losses.
Large enterprises have solved these problems by employing systems like ERP, CRM, procurement tools etc. However, SMEs are the ones who are struggling with these challenges.
Hey ‘E’, how can you solve these problems for our SMEs?
The SME community deserves to be treated exclusively for their significant contribution to our economy. One should not push ERPs and CRMs that are designed for large enterprises because this community does not want very structured and rigid software tools. They don’t want to spend on training or additional hardware. Structured software adaptation among SMEs stands at 15% and only a small fraction within the SMEs use these tools. Some of our fellow B2B players like Power2SME, Bizongo, Ofbusiness, Ninjacart, IndustryBuying have miniaturized procurement tools or CRM or ERP or typical B2C E-Commerce softwares etc., and have taken them on mobile. But the startup community is still complaining, “Technology adaption is very poor by SMEs in India” for which our reply would be,” Understanding of what SMEs need is poor in India.”
Ok, so if ‘E’ cannot be ERPs or CRMs for SMEs, what other options does it have?
Let’s look at the social media platforms!
Social platforms like WhatsApp and Facebook have revolutionized the way we are communicating. About 250 Million Indian users are active on these platforms clearly indicating that unstructured communication is the preferred mode. So, what’s the learning from this?
These platforms are designed to provide context and unstructured patterns for conversations which have been key to the success of these platforms. These platforms have helped us to connect and network better.
Time and again researches have shown that many people use social platforms in more than one ways to support their business decisions. This has proved that beneath B2B or B2C, it’s human to human!
Some B2B startups like Wydr and Udaan have leveraged conversations to help them connect better with their customers. They have brought in chat as a support feature to their platforms. “Chat with your friends while you shop” or “Chat with us and get your questions answered instantly” being few of the many mantras.
Why can’t ‘E’ be completely chat based instead of just support?
“Conversational commerce”, a term coined by Chris Messina of Uber, is the new buzz word that has seen light in the last two years. Though not widely implemented as the primary solution, with an emerging trend of Chatbots, AI and NLP and data science in boom, we can now envision ‘E’ being completely conversational.
‘E’ — Conversational commerce powered by well-designed chatbots can really be an apt solution for the SMEs. It can help SMEs make faster decisions, as the flow of information can be much faster. It can help SMEs build dynamic relations and have frictionless trade.
We, Avysh, a B2B E-Commerce platform for products like Steel, Cement, Polymers, Chemicals etc., are one of the early bloomers of the trend who have their ‘E’ as a conversational platform. Conversational commerce powered by chatbots is the technology component that is being deployed by us today and is helping us build trust with our stakeholders by providing them a seamless trade experience.
“Conversational commerce can do to B2B E-Commerce, what smartphones did to fixed lines!”