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MANAGEMENT: What Is the Advantage of B2B Business In the World of E-Commerce?
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What Is the Advantage of B2B Business In the World of E-Commerce?

By Mr. Marwan Emile Faddoul (Managing Partner Qadisha Consulting) & Mr. Alessio Falcone (Senior Consultant Qadisha Consulting)

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      去年6月,由麦可思研究院编著、社会科学文献出版社出版的《2016年中国大学生就业报告》发布。报告显示,大学生自主创业的比例从2013届的2.3%上升到2015届的3%。虽然比例看似不大,但根据国家统计局《2015年国民经济和社会发展统计公报》发布的普通本专科毕业生人数680.9万估算,2015届大学生中约有20.4万人选择了创业。在21世纪的中国,大量成功的创业者成了这一代青年的榜样,创业者成了偶像。整个中国社会在意识观念上,从恐惧创业、怀疑创业,到鼓励创业、拥抱创业,发生了很大改变,创业环境也越来越好。


      创业模式也是很多创业者面临的一个选择和挑战。一般而言创业者都需要在B2C和B2B之间做出选择。如果你现在去“百度一下” “选择B2B还是B2C”,你会看到无数答案在网页上涌现。其实,在电商发达的今天,B2B是笔者看好的方向。首先,创业者或企业主可以通过电子商务平台收集大量可用于改善收入预测的数据,了解客户的购买周期等关键信息,调整产品组合以及营销策略。其次,在B2B的商业环境中,自动调整价格满足客户并平衡市场,可以在卓越的运营效率下满足客户需求,提升服务水平,赢得市场占有率。而电子商务平台搜集同行报价数据并通过报价系统动态调整价格的方法大大避免了价格竞争和信息滞后的被动性。同时,电子商务平台可以帮助你收集客户信息,简化账户管理。


      电子商务在B2B商务模式中发挥的作用远不止于此,综合合理使用,你会收获更多。

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Chinese culture is truly fascinating and for someone like me who has lived in Europe for most part of his life, there are striking differences in several aspects. Probably more astounding are differences in fields such as education and business. Talking to my local desk-mate Daoming at work, I realized how avidly the new generation looks at entrepreneurship, craving freedom and balance in life and success. The new generation approaches business with a lot of passion but still the larger portion selects a B2C model as being most appropriate for their venture, overlooking the benefit of going B2B. The issue lies in widespread misconceptions that a B2B business model cannot take full advantage of new technologies, such as IoT or e-commerce platforms, and is also a result of obscure processes. This is just that - a misconception.

hl managementDiscussing with Daoming during lunch break, we listed some major differences between two pure business models so as to have a clear idea of the choice that young entrepreneurs face. On one side, there is the B2C model that is based more on impulse, quick decisions and no time to make comparisons - if not with the immediate local items. On an average, purchases are small in value and volumes are high. The stakeholder involved is only one, namely the decision taker which is also the customer. On the other side of the spectrum, there is a B2B model in which orders are usually more complex, costly and involve a large number of stakeholders.
 

Take as an example buying a new laboratory. Technical staff evaluates performances while IT department looks at software integration, the finance department usually cares only about costs while the HR department is involved in developing specific personnel training. Managers in the end will take all the available information into consideration and coldly take the final decision. This process is cumbersome but not obscure once laid out and if addressed in the proper way, it can turn very profitable. I am a strong believer of ripping benefits from business digitalization so I challenged myself to find ways for a B2B business to improve through the adoption of technology and explain them to Daoming as if he were a graduate from a local university who’s interested in starting his venture but is unsure of the path to take. Widespread e-commerce platforms have proven very effective for B2C and here are the reasons for which I believe they can be even more effective for a firm operating on a B2B business model.
 

Big data: Through the e-commerce platform it is possible to gather large amount of data that can be used to improve revenue forecasts, understand customer’s buying cycles and possible seasonal effects. It is becoming increasingly important to analyse the elasticity of the focus market as knowing the price at which demand and supply coordinate do not suffice anymore, this can be achieved through acquisition and analysis of data. Also, the mass of information gathered can be leveraged to improve customer segmentation and product portfolio so to capture and retain the most profitable accounts. Big data can be an important tool to install and maintain continuous improvement practices, which only a small percentage of firms have in place.

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Operational excellence:
In a B2B environment firms deal with a great variety of order types and are less likely to follow rigid supply-chain process, so being able to dynamically adapt prices to market demand in automatic mode is strategically important. Level of service can be improved by interfacing the online platform to omni-channel solutions which distribute information/tasks from multiple channels to available resources increasing responsiveness and customer centricity. Integration with order management system across multiple channels allows direct communication between different warehouses and this in turn creates a small JIT that reduces cost very visibly. It holds true even more if the B2B firm moves towards cloud and cloud applications.

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Marketing:
Through the e-commerce platform, a B2B business can address relevant stakeholders by emphasizing the solution provided to their problems. Most of the customers buying B2B surf the Internet hunting for information on the purchase they’re after, so a B2B firm should help them in the selection process by providing additional information that would not be needed in a B2C environment. Continuing along the line of collaboration, speaking the language of the industry, providing multiple payment methods and creating a direct connection with the sales department are steps that help customers reach a rational decision. One additional benefit of forging an alliance with customers is an increase in retention rate. For a B2B business selling services the amount and complexity of information to be provided are greater.

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Account management:
The e-commerce platform helps in capturing subscribers through newsletters and promotional mailing list. In turn, firms can simplify account management thanks to the important information gathered about their customers.

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Pricing:
There is a risk in publishing a great quantity of information about a firm’s product lines so that a search engine can easily find data for many providers of the same product, aggregate them and lead to a commoditization of products. To counter this eventuality and avoid competing on prices, a Configure-Price-Quote system can set prices dynamically.

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All in all, the benefit for a B2B firm leveraging technology can be seen across multiple aspects of the business. At this point the question is why Daoming in his fictitious role of recent graduate should still hold his belief that B2C is the best choice for his venture. I realized that there are some very good advantages in starting a B2B business during a time in which everyone is going digital. The first immediate reason is that in a B2B business it is possible to achieve the same profit of B2C but with fewer accounts. To do so, attracting customers is the way forward and for a B2B business it is possible to just buy the word searched for long tail keywords connected to specific characteristic of the product sold. There is little chance that two offerings have the exact same characteristics and so probabilities to show high in the search list increase.


Moreover, for B2B business it is not as mainstreamed as yet to leverage an e-commerce platform, since according to Forbes the estimated total spending on e-commerce technology for B2B is twice the spending for B2C businesses, which leaves a big market untapped. I found interesting how at times the choice to go B2B instead of B2C derives purely from addressing customer pain point in some part of the purchasing journey. Some famous examples are Amazon and Facebook who started their payment system to facilitate customers’ purchases through their websites and ended up becoming pain points for the banking industry.


During our lunch break I managed to push Daoming to consider more prominently a B2B business model. Hopefully going forward more and more, entrepreneurs looking to start a venture will consider developing such a B2B model, without fearing technological revolution or rational decision processes and instead riding them to rip all the benefits they bring.
 

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