How cross-border ecommerce is reshaping B2B procurement
Worldwide, the eCommerce market is experiencing a major shift. The rise in smartphone usage, the swift spread of internet access, and a young, tech-savvy demographic are fueling the shift.
Not just B2C, but cross-border eCommerce is also emerging as a revolutionary force in the B2B world.
Established businesses are embracing online platforms for procurement. This steady transition towards online procurement is driving the growth of the market. Experts predict that the global B2B eCommerce market will grow at a CAGR of 18.04% between 2024 and 2034. It is forecasted to reach $60.62 trillion by 2034.
If you’re planning to dip your toes in B2B cross-border eCommerce, it’s important to know what’s driving this transformation. Here, we’ll discuss the factors driving this shift as well as share a few tips to help you succeed in the foreign market.
The rise in digital B2B marketplace
The rapid growth of digital platforms has changed how businesses source goods and services.
Businesses are no longer limited to local suppliers or traditional import/export models. They can access a global marketplace with a broader selection of products, competitive pricing, and streamlined procurement processes.
What’s fueling this shift? The shifting preference for digital eCommerce is one reason. A survey by Gartner found that 83% of B2B buyers prefer digital commerce for ordering or payment.
Among the several key players, the Seattle-based Amazon leads the global ranking of online marketplaces in terms of traffic in 2024.
Last year, in December, it registered 6.1 billion direct visits to its .com website. This is due to its strong global presence, expansive customer base, and diverse product offerings.
Consumerization of B2B is also changing how businesses procure goods and services. As technology has evolved, so has the B2B buying process. Buyers now expect the same convenience, personalization, and efficiency they experience in their personal online shopping.
According to PYMNTS.com, decision-makers want personalized, relevant information delivered at the right time – often in real-time. One of the major forces driving this shift is AI. It’s helping personalize the shopping experience for businesses.
Personalization aside, B2B companies are incorporating personalized user interfaces and dashboards. That allows buyers to interact with products and services in a way that suits their needs.
Tips for success in foreign markets
Here’s how you can succeed in B2B cross-border eCommerce.
1. Do a Thorough Market Research
Cross-border eCommerce is profitable, but only when you do your due diligence before entering the market. Conduct a thorough research, hence. That will help you identify high-potential international markets.
Take, for example, the North American B2B eCommerce market. Straits Research’s report predicts that the market will grow at a 9.3% CAGR between 2024 and 2032. It is forecasted to skyrocket from $1,353.8 billion in 2024 to $2,514.9 billion by 2032.
As North America is a significant revenue contributor in the B2B eCommerce landscape, it’s a lucrative market for global sellers.
Before you tap into it, analyze the regulatory landscape, consumer preferences and spending, and local competition. You will get a good insight into the market and can expand accordingly.
2. Set up Secure International Payments Solution
Traditional payments, such as bank transfers and international wire transfers, are in place for cross-border transactions. But, PYMNTS.com notes that businesses looking to enter overseas find that these payment methods are full of delays as well as complexities.
A recent PYMNTS Intelligence survey found that the failure rate for cross-border payments has touched 11%, which amounted to $3.8 billion in missed sales in 2023 alone.
Instead of dealing with these issues, offer a variety of payment methods for each market, such as procure to pay software. Limited payment options force consumers to abandon digital transactions, reveals the Applause 2024 Digital Payments Survey.
The lack of localized payment methods is another issue. To offer businesses familiar and convenient payment systems, you can establish local bank accounts. But that would be cumbersome.
The solution? Develop a partnership with a Merchant of Record, or MoR. Acting as your reseller, an MoR offers a robust payment infrastructure that simplifies payment acceptance in different currencies, explains PayPro Global. Thus, your customers will experience less friction and enjoy a seamless payment experience, which will ultimately boost your business.
Another benefit? You won’t have to deal with complex international tax and regulatory compliance rules and administrative processes. An MoR will take care of those, so your business will be protected from fines and penalties.
3. Invest in Customer Service
More than anything, the success of a B2B cross-border eCommerce lies in its customer service.
You must provide top-notch customer service for your global consumers.
Offer multilingual support so that customers, regardless of their location and culture, get the most out of your services and products.
AI-powered solutions can help, but nothing beats the human touch. So, hire a team of human translators.
Amazon Web Services (AWS) is a case in point. It has built a multilingual contact center for Medicaid agencies on AWS.
As you see, cross-border eCommerce is reshaping B2B procurement in ways that were unimaginable a decade ago. Its influence on B2B procurement will become even more significant as cross-border eCommerce continues to grow.
While challenges remain, the benefits far outweigh the drawbacks. Businesses that embrace this shift and adapt to the challenges of international trade will position themselves as leaders in the global marketplace.
