B2B e-Commerce Market in India 2023

B2B e-Commerce Market in India 2023

Market insights:

The Indian B2B e-commerce market is dominated by the manufacturing and construction sectors, which account for around 60% of the market. Other major segments include automotive, healthcare, and retail. Most of India's 1.3 billion people shop in the unorganized retail sector, which is the most prevalent and well-liked retailing and purchasing venue. B2B e-commerce will continue to fuel the unstructured general trade channel, helping it double in size over the next 10 years despite organized brick-and-mortar adoption encountering several challenges at all levels. B2B e-Commerce is expected to reach INR 2,694.05 Bn by the end of 2027 with a Compound Annual Growth Rate (CAGR) of 23.08% between 2023 and 2027

Market Influencers:

Drivers

Digitalization has streamlined several processes in the B2B e-commerce industry, such as product discovery, order placement, and payment processing.
B2B e-commerce platforms enabled real-time tracking of orders and shipments, providing greater transparency to buyers and sellers. This transparency helps build trust among stakeholders and reduces the risk of fraud and disputes.
B2B e-commerce companies leverage social media effectively and can gain a competitive advantage over their rivals. By monitoring industry trends, keeping up with customer preferences, and adapting to changing market conditions, companies can stay ahead of the curve and outperform their competitors.

Challenges

Maintaining customer relationships with B2B e-commerce can be challenging due to limited personal interaction, complex products, competing platforms, large customer base, complex transactions, and technical issues.
Providing personalized services to B2B customers can be difficult, especially when dealing with a large customer base.
India is a country with more than 22 official languages and over 1600 dialects. This can make it challenging for e-commerce companies to communicate effectively with their customers, particularly those who may not be proficient in English, which is the language commonly used for e-commerce in India.

COVID-19 Impact Analysis:

The pandemic has led to an increase in demand for B2B ecommerce platforms in India, as businesses have had to shift their operations online due to lockdowns and restrictions on physical interactions.
The pandemic has disrupted supply chains across the world, and India is no exception. This has led to shortages of goods and delayed deliveries, which has impacted B2B ecommerce platforms as well.

Market Trends:

Omnichannel Experience: B2B e-commerce platforms are integrating their online channels with offline channels, such as brick-and-mortar stores, to provide customers with a seamless shopping experience across channels. This integration provides a choice to customer for delivery at a particular location or self-pick up.
UPI Gaining Popularity: The quick, easy, and dependable UPI payment mechanism is now widely used by shops. Another encouraging development in the Indian B2B commerce business is the use of UPI payments by retailers. UPI has thus emerged as a crucial payment method.

Competitive insights:

Flipkart Internet Private Limited and Amazon India Limited hold the major market share of the Indian B2B e-commerce market and followed by Indiamart Intermesh Limited and others. Indian B2B platforms recorded three times faster growth in their spending in comparison to comparable peers from other nations. India's overall B2B spending increased from 9.4% in Q3 2021 to 10.3% in 2022 on a year-on-year basis.