Impact of Digitalisation on B2B Ecommerce during Covid-19 Pandemic
Covid-19 caused a tremendous impact on the lives and livelihoods of people all over the world. Not a single country was spared the brunt of this deadly virus albeit there is disparity in the degrees of devastation countries faced. The pandemic triggered panic not only in societies but in the business world as well. When the pandemic peaked for the first time in early 2020, the majority of the countries were completely locked with only a few governments deciding to put conditional restrictions depending on the spread of virus in specific locations. In the majority of the countries, business activities were completely halted for the initial few weeks. Companies then devised ways to keep the work going. That led to a radical emergence of work from home / remote work culture which continues to date because the pandemic is not over yet.
However, as it is said ‘necessity is the mother of all invention’, and the pandemic threw a monstrous challenge to the way people work and live. The challenge generated the necessity to think over ways of countering the challenge to the lives and livelihood of people. This period saw a massive push from the government, society, and the business sector toward digitalisation of businesses. This was intended to bring businesses on the online platform since physical interaction was completely denied during the pandemic. Even now a surge in Covid-19 cases at any place immediately leads to curbing the freedom to move and meet people.
E-commerce chains, such as Amazon, Flipkart, Snapdeal, First Cry, Myntra, and the like prove to be a great boon for the general population in catering to their regular and sundry needs. These were the established players who quickly adapted to the ‘new normal’ and attuned their mode of customer interaction to the exigencies of the time. These players, however, didn’t have to bother much because their businesses were already fully digitalized. The only adaptation they needed was to deliver products to consumers under government regulations on delivery. Nevertheless, the aforementioned ecommerce businesses are retail outlets and belong to the B2C (business to consumer) category.
In India, the impact of Covid-19 was felt very badly. Job loss and business closures happened on a massive scale. The core business sector, the SMEs which contribute significantly to the Indian GDP and is considered the engine that pulls the Indian economy, suffered hugely. One of the reasons for the colossal loss to this sector was the lack of digital presence. As per a research study conducted by Google along with the leading consultancy, KPMG pointed to the paltry presence of SMEs on the digital platform. As per the study, only 32% of SMEs are on the internet which is not a very promising figure. The SME sector relies heavily on the B2B (business to business) model which is based on the premise of connecting buyers with sellers. In principle, a B2B company hosts the enterprises and finds buyers for the products they (enterprises) offer. Therefore, it is topical to assess how B2B ecommerce has been impacted by the digitalisation drive during the pandemic.
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What is B2B Ecommerce?
In very simple terms, B2B ecommerce is the business transaction that takes place online between one business and another, for instance, a manufacturer and a wholesaler, or a wholesaler and a retailer. In such a transaction, the product manufacturer is definitely present on the internet to fulfill the demands of local wholesalers. The transaction, therefore, took place between businesses rather than between a business and an individual consumer. The platform for transactions is provided by a B2B ecommerce company. Therefore, B2B sites become the common meeting point of businesses whereby one may be selling raw materials to another for the production of goods.
The Move Towards Digital
The halting of people’s movement and the outrageous restrictions on the sources of livelihoods saw a spurt in the move toward the digital platform. Individuals took to the internet and other digital platforms available to start some kind of business. This inevitably increased the searches for manufacturers, suppliers or wholesalers present online. The halting of business activities coupled with the promise of growth through B2B medium-tilted enterprises in favour of joining digital platforms. Companies envisioned the potential of joining ecommerce platforms since they realised the significance of such platforms in the post-Covid world.
Digitalisation in India has a deep positive impact on B2B ecommerce. Like the way B2C ecommerce got a boost due to the presence of digital channels, the significance of digital marketing platforms for B2B companies has grown notably after the pandemic had struck. According to a research publication, the sales managers on average gave strong approval to the available digital channels. That means the impact of digitalisation on B2B was not only promising but may prove to be a game-changer in the ways businesses operate in India.
These new developments energised the B2B sector to play an enabling force in catalysing the business and economic activities which were stopped because of the pandemic. In their bid to seize the moment B2B players ensured the supply of raw materials when the normal supply channels were dried up for the manufacturers during the peak of the pandemic in India.
India’s B2B sector is one of the fastest-growing sectors in the world. According to John Curtius, a partner at Tiger Global which is an investment firm, estimates that India’s B2B is expected to reach $1 trillion by 2024. Though adopting digital channels during the pandemic seemed more like an ad hoc arrangement rather than a concrete solution, the companies, especially B2B, are foreseeing a huge potential in bringing businesses to the digital platform. In the last few years, resorting to a digital-based supply chain ecosystem enabled by B2B platforms has gained traction with the SMEs sector which believes that digital channels will result in rich dividends in the coming years. Migration of the consumers to the digital platform augurs well for the B2B established players as well as new start-ups.
Assessing the Impact of Digitalisation
Digital transformation of businesses is having a positive impact on the B2B ecommerce. Since more and more players are thinking of taking their business online, it presents a happy scenario for the B2B companies. When start-ups go online they will also look to gain markets for their products. At this critical juncture, the role of B2B enterprise becomes prominent. To tap the growing digital market, the B2B players should reach such start-ups and facilitate their growth. The impact could even be more on the positive side if the B2B enterprises succeed in convincing the SMEs sector of the importance of adopting digital channels.
Before the pandemic hit the world, enterprises had the leeway to join the ecommerce platform as per their mental dispensation. The pandemic snatched away this luxury and almost forced enterprises to go online to be of any relevance in a highly volatile and dynamic business environment. Today, the survival of businesses depends on the swiftness in embracing the new norms. If businesses are to survive they need to align their strategy with the technology which is setting new rules every other day.
As more and more businesses are exploring the possibility of ecommerce, the demand for joining a B2B platform will continue to soar high. The digitalisation drive indeed is having a positive impact on B2B ecommerce. The need of the hour is that the B2B enterprises adroitly handle the situation and create deep faith among the new enterprises by giving them some incentives of joining B2B ecommerce.
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