North America B2B e-commerce market is expected to register a CAGR of 10.2% for the forecast period 2022-2027. The market is heavily influenced by digitalization and Industry 4.0 trends, with businesses of all sizes switching to digital modes of operations, digitalizing the majority of the aspects of the supply chain.
- According to Payments Canada, around 25% of the payments are conducted by debit or credit cards, with about 63% of transactions from POS credit and debit, and 4.2% of the payments from cheque and paper media in 2021. The shift in the preferable mode of payments supports the online payment modes offered by the e-commerce platform and also signifies the favorability of digital platforms for financial purposes.
- Modern buyers looking for customized solutions and suppliers avail the e-commerce platforms to approach different suppliers, popularizing the platforms. Hence, specialized B2B marketplaces are witnessing a significant boost in demand to cope with new technological advancements. This also boosts the competition and opportunities among the suppliers due to added reach and convenience through the e-commerce platforms.
- However, cybersecurity and data breaches constantly threaten the B2B e-commerce platforms and require stringent measures to ensure data security. For instance, according to The Daily Swig, in January 2022, the US e-commerce website, PulseTV detected a data breach, suspecting the exposure of more than 200,000 customer credit card records. The incident was detected by the end of December 2021, as the breach persisted between August 2021 and November 2021.
- Unlike most industries, the COVID-19 pandemic has benefitted North America's B2B e-commerce industry, motivating businesses to shift operations online and secure their function from the limited movement and availability of resources. B2B e-commerce platforms provided the perfect media to communicate with suppliers and wholesalers, aiding in the situation hit adversely by the limited movement across lockdowns. In the post-pandemic era, the companies benefit from the cost benefits and flexibility to greater availability of suppliers, with overall supply chain efficiency added.
Key Market Trends
Popularity of Retail Business Operations Online to Drive the Market
- The online B2B marketplace gained popularity much later than the retail B2C and C2C e-Commerce options gaining popularity in North America. The ecosystem created by the early adapters of these retail channels shaped the favorability of online operations, creating promising prospects for the B2B e-Commerce platforms. The growth of retail e-Commerce platforms continues to bolster the evolution of the B2B e-Commerce marketspaces online, witnessing new retail and wholesale channel partners shifting operations online.
- According to the US Census Bureau, e-commerce sales in the first quarter of 2022 accounted for 14.3% of the total sales, registering an increase of 6.7% compared to the sales in the first quarter of 2021. The rising popularity of retail e-commerce indicates customer favorability, resulting in the ecosystem's evolution and attracting new e-commerce platforms and players in the market. This also develops the market space for the B2B e-commerce platforms and their users.
- Further, specialized e-commerce retail sales reflect the potential offered by the scope for specialized B2B e-commerce marketplace, catering to the needs of a particular end-user industry. For instance, according to StatCan, the e-commerce retail sales in Canada in 2020 in the food and beverages sector accounted for CAD 4.12 billion, with sales of CAD 3.92 billion for clothing and clothing accessories and 3.75 billion for health and personal products.
- Also, many retailers are operating purely from online resources for a channel instead of setting offline facilities to leverage the wide reach offered by the platforms. For instance, according to the US Census Bureau, out of the total retail sales by non-store retailers in the United States in 2020 accounted for USD 978.3 billion, the e-commerce sales accounted for USD 705.7 billion, promising significant prospects for the online e-commerce platforms.
United States Will Dominate the Market Growth
- Modern buyers prefer online research for prices and availability offered by different suppliers to make the right decision. As a result of the COVID-19 pandemic, many new-age digital investors and entrepreneurs are switching to digital supply chain purchase options permanently, leveraging the B2B e-Commerce platforms in the US.
- It is beneficial to shift various aspects of the business on a single channel, online or offline. Hence, US businesses prefer to shift most of their operations online, leveraging the prevalent e-commerce platforms for wholesale and retail. For instance, according to the Annual Wholesale Trade Survey by the US Census Bureau, the e-commerce sales of US merchant wholesale trade sales via MSBOs accounted for around USD 1.04 trillion in 2020 and USD 1.10 trillion in 2019, compared to 0.99 trillion in 2017. The post-pandemic market is registering an increase in online adaptation.
- Further, the increasing interest for small businesses to shift their operations online drives the ecosystem's growth. As a result, several small companies from different parts of the country show interest, based on the existing online participants and emerging new businesses to try the online market space. For instance, according to the Small Business Pulse Survey by the US Census Bureau, 43% of New Hampshire's whole trade small businesses planned to develop online sales or websites in the US in 2021, compared to 26.5% of the companies in Michigan, and 25.7% from Connecticut.
- Third-party e-commerce solutions are availed widely in the region, with more businesses joining the internet community to showcase their products. The country witnesses new emerging online marketplaces encouraging users to enter online sales. For instance, according to Sana Commerce, 56% of the manufacturers expect third-party e-commerce B2B sales platform solutions to generate the most revenue in the US from 2021 to 2026, followed by 52% for online marketplaces and 44% for the homegrown e-commerce platform.
The North American B2B e-Commerce market is highly fragmented, with moderate to low market competition. The competition among different service providers and portals is highly intense, with each service provider offering reach and facilities to the users, focusing on a user-friendly interface. The companies are collaborating with companies and brands to help them extend their reach to a broader audience.
- September 2021 - Alibaba.com introduces new series of tools and programs to support smaller businesses, including new entrepreneurs, to help them expand or launch B2B e-commerce. The new tools include supply chain tools enabling sellers to research proving trends and products to resell on other platforms, live-video chats and on-demand trending video, drop-shipping features and alternatives, and other features. Also, the company leverages virtual reality to show showrooms and assembly lines in its new video showroom.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support