Tag: b2b ecommerce marketplace

The eCommerce landscape in Saudi Arabia is changing. Shoppers in the country have shown a preference towards online fashion portals due to the variety of clothing and discounts offered, and convenience of shopping.

Do you know the number of eCommerce shoppers in Saudi Arabia is expected to increase at a CAGR of 12.4% by 2020, with the average online shopper spending SAR 2,405 by the same year?

The statistics don’t surprise given Saudi Arabia has multiple achievements to speak about including advanced infrastructure, younger working demographic and high connectivity rates.

A Jan 2018 report by yStats.com on Saudi Arabia’s B2C eCommerce market states that the country will become the top online retailer by 2020, surpassing the current regional leader, the UAE.

The report further mentioned that the increased use of smartphones has facilitated the exponential growth of eCommerce in Saudi Arabia. That’s huge!

While well-known eCommerce players like eBay.com, Amazon.com and Aliexpress.com are already hot favorites of online shoppers in the country, there are other Saudi Arabia-based eCommerce marketplace businesses that have managed to create a buzz.

Souq.com (an Amazon company), OpenSooq.com and Jarir.com constitute 22%, 21% and 75% of the web traffic respectively in Saudi Arabia.

Adding to that, let us explore success stories of five Saudi Arabia-based multi-vendor eCommerce marketplace businesses:

1) Noon.com

Based in Riyadh, Noon.com is a USD $1bn eCommerce shopping Marketplace that was founded by Mohammed Alabbar, the Chairman of Emaar Properties.

The online portal offers an assortment of products including fashion, beauty, home & kitchen, babycare, groceries and electronics. It even features top brands like L’Oreal, Apple, Mothercare and more.

Keeping up with the digital technologies across geographies and industries, Noon.com has up-scaled itself to be a digital marketplace relevant to consumers from all age groups.

In 2017, the “Arabic-first” e-commerce platform rolled its operations in the UAE after noticing the country’s internet-friendly, digitally savvy population.

The same year it partnered with eBay to reach a wider audience and offer a larger product range. In early 2018, Noon.com announced that it was set to enter the online groceries delivery market in China.

Noon.com currently has a head office in Riyadh, and a warehouse the size of 60 football pitches in Dubai.

Even though the eCommerce scene in Saudi Arabia is still booming, Noon.com is making the right business moves and paving its way to multiple industries and countries.

How soon do you think it will become a USD $2bn eCommerce shopping website? Very soon, we would say!

2) Jarir Bookstore

Founded in 1979 as a brick-and-mortar supplier of books, office supplies, and educational aids, Jarir Bookstore has evolved to a thriving eCommerce business.

Based in Riyadh, today it has expanded its product range to Children’s toys, Arts and Crafts materials, AV instruments, photography tools and electronic gadgets.

In December 2018, Jarir Bookstore was awarded Primaduta, the highest award given by the Indonesian Government to those foreign entities that stay loyal to buying and developing imported products from Indonesia.

In an effort to target millennials, it opened an Apple store in its Riyadh Panorama showroom recently, promising an exceptional shopping experience.

Jarir Bookstore has survived the ever-changing business landscape for 30 years, and it will continue to thrive given how easily it adjusts to the disrupting technologies and evolving consumer patterns.

3) Wadi.com

Saudi Arabia-based eCommerce business stands out among the rest because of the fact that one of its founders is a female, Kanwal Sarfraz hailing from Pakistan.

Founded in 2015, Wadi.com grew six-fold its operations in just one year.

After raising US$67 million, and subsequently setting a record for Series A funding in the Middle East, Wadi.com achieved operational profitability by late 2016 – within just two years after getting launched.

Today, it offers a catalog of 550,000 products including fashion, babycare, electronics, and more. It is often called the “ultimate oasis of online shopping” because one can buy anything from under the sun at Wadi.com.

Apart from being headquartered in Saudi Arabia, it has offices in Dubai and India, with a major plan to expand its India operations in the coming months.

Wadi.com sells to major Middle-Eastern countries like Bahrain, Kuwait, Oman, the UAE and Saudi Arabia.

4) Souq.com

After being acquired by Amazon for USD $580mn, Souq.com found itself as the forefront of technological innovations in the Middle East.

According to CEO Ronaldo Mouchawar, much emphasis is now being given to accelerating mobile initiatives given that 80% of their consumer base shops on their smartphones.

Moreover when Souq.com was first established, it took 3-5 days to deliver an order. Now most orders happen on the same day!

Souq.com has also been a pioneer in making cashless transactions a possibility since a major portion of online shoppers in Saudi Arabia prefers to Cash On Delivery (COD).

Souq.com has a product catalogue that is similar to Amazon, and happens to be one of the top three shopping websites in Saudi Arabia.

5) OpenSooq.com

OpenSooq.com follows a one-of-a-kind business model. It is the most famous horizontal classifieds platform in the Middle East where it enables users to buy and sell goods and services without the involvement of any third parties.

Just like Wadi.com, the COO of OpenSooq.com also happens to be a female, Joanne Bou Jawad from Dubai. The online portal operates in six key countries including Saudi Arabia, Libya, Oman, Jordan, Kuwait and Iraq.

OpenSooq.com has been successful in penetrating a market which earlier relied only on traditional or print classifieds. Since its inception in 2008, the online portal has come a long way in educating them about going digital.

Wrapping up

The internet penetration in Saudi Arabia is extremely high at 64%, as compared to other countries in the Middle East. Smartphone usage is commendable with bought on mobile.

Moreover, the success stories of these five online shopping marketplace portals prove that Saudi Arabians are eCommerce-ready.

When it comes to online shopping, visualization that comes in mind is about individualwho is buying products from Amazon, ebay or Flipkart right? But ecommerce industry is not limited to that only in this technology-driven era.

Businesses have also started doing commerce online. Businesses selling to other businesses via ecommerce platform known as B2B ecommerce are performing great.

It means Wholesalers, Manufacturers and Distributors are selling to retailers, suppliers online. This is about direct B2B model. Just like B2C, B2B also offers ecommerce marketplace platform.

B2B ecommerce product demo

Surprising fact is that though less popular and recently arise, B2B Ecommerce industry is double the size of B2C ecommerce!

Flexfire LEDs is one such brand which receives 80% of its revenue from B2B sales.

It is forecasted that global B2B ecommerce revenue will top $6.7 trillion by 2020.

73% of B2B millennial are involved into purchasing decision that has different mind-set and preferences for buying. And thus it’s necessity for businesses to be available at the places where their clients are. (Reference: forrester.com)

So are you ready to accommodate next wave of B2B ecommerce?

Running a B2B ecommerce channel is inherently more complex than traditional B2C ecommerce. B2B clients need extra functionality and personalization than B2C.

It can easily be overcome by modern B2B ecommerce platform.

Let’s review B2B ecommerce Software features to get sustainable growth –

1. Custom Pricing Feature –

In B2B commerce, you have different pricing structure for different customers according the volume of business; order quantity, product type etc. Here the customers can also request for custom quote.

B2B ecommerce platform provides such functionality to handle whatever complex pricing structure your businesses have.

2. Custom Bulk Discount –

It has the feature to offer you bulk discount functionality in order to attract bulk purchase and develop customer loyalty ultimately enhancing business relationship. It also determines Minimum Order Quantity (MOQ) to set your margins and make you remain profitable.

3. Customer Profiling –

Personal customer storefront would be given with single and multiple accounts where they need to register and submit their info. It also enables to give specific roles and access to particular user.

Based on the customer profile, custom order quantity, discounts, price, MOQ, payment terms etc. would be determined. Also, it will allow you to offer custom catalogues, one click reordering, personalised promotions and order tracking facility.

4. Convenient Payment Mode

It offers you multiple and flexible online payment mode along with selected days credit facility that is accommodated in your ecommerce store itself. It helps in improving reordering and managing customer loyalty.

5. Omni-Channel Presence

Responsive, fully customised and scalable ecommerce platform solutions including website, mobile apps, and web apps for your B2B ecommerce is to give comfort and ease to your client at your virtual store. Client can access their profile from anywhere from any devices. User Interface in B2B is as important as it is in B2C.

6. Integrated Marketing features

In-built marketing feature to enhance your sales made possible with timely reminders, notifications, personalised offers and discounts and many more. Search engine friendly solution to fulfill your desire.

So, this platform offers end-to-end solution reduces human resource efforts. Sales reps in this case are to assist clients and perform consultative role rather than manual paper work.

Benefits of B2B Ecommerce Platform:

More Online attention

Saves Time and Money of both

More valuable business relationship

Convenient mode of promotion

Customised, flexible and transparent business treatment

Develops new idea for business relations

Improved Customer Loyalty

So, what are you waiting for? Scale-up your B2B commerce by uplifting it to online with the help of B2B ecommerce platform!

Considering the shift in the online buying habits of customers which is highly forced by technological changes and other factors like change in customer expectation, increased customer value has improvised the demand of online marketplaces. Due to this, online Marketplaces are doing vast growth and driving robust sales.

Ecommerce Marketplaces – Business Models

Business models are identified based on how and with whom the transactions are talking forwards.

• If the consumers are selling to consumers, model is known as C2C Businesses
• If the Business owners are targeting to Consumers, it would be B2C Businesses
• And when Businesses are targeting to other businesses then it would be B2B Businesses

The concept will remain same in the ecommerce marketplace business as well.

If you look around the marketplace platforms you’re using will make you understand how one is different from another.

OLX where the customer is selling product to another customer creates a C2C business platform, Amazon is the example of B2C marketplace where business is selling to customers whereas platforms like Alibaba, Indiamart are B2B marketplaces where the business needs are fulfilled by another businesses.

Here, B2B marketplaces can grow in two directions, Vertical businesses and Horizontal businesses. Industries like plastic, chemicals, automobiles etc. are falling in B2B sectors.

In B2B or B2C, the concept of online marketplace will remain same.In general terms, Marketplace offers a platform to multiple vendors who can sell their products to buyers. Marketplace owner is the middlemen connecting vendors and buyers who offer variety of different brand of products at a single platform.

Key differentiating Factors – B2B and B2C Ecommerce Marketplace

Though the concept is same, business model and the usage differentiates one marketplace with other. There are different buyer segment in each of the business model, customer of B2C model is different from B2B model.

Why it’s not a good choice to interchange B2C ecommerce Marketplace with B2B ecommerce Marketplace?

Customer from B2C and C2C Marketplace requires easy access, quick delivery, easy payment option, quick buying process. They buy the product in low amount.

Whereas customer in B2B ecommerce marketplace segment requires

• Bulk product orders
• Discount based on quantity
• Availability to edit or change and validation of purchase order online
• Quotation for orders
• Custom quotation
• Different payment option acceptability

In this way, the way buyers deal with the seller makes the difference.

Rising B2B Ecommerce Marketplace Trends

Due to shift in the way business buy products, B2B online marketplaces are rising.
“As per the report, today 74% of the B2B buyers do online research at least for half of their work purchases.
Also, the 73% of B2B millennial are involved into purchasing decision that has different mind-set and preferences for buying. (Reference: forrester.com)

So, the merchants need to be there where your customers are. Though the rises of B2C ecommerce marketplaces are high, actual revenue from B2B ecommerce marketplaces are high and touching the sky. B2B online marketplaces are an untapped opportunity; it provides convenience and easy accessibility to large new audiences.

Also, the start-ups have many advantages to tap this market, like-

• Low entry cost
• Easy to set-up
• No burden of making huge inventory

B2B E-catalogues – replacing print catalogues

Online catalogues are helping both entrepreneurs and buyers because of following important features –

• Gives easy access of products to customer
• Reduces labour costs
• Real time integration with suppliers

Easy access, real time integration and link with suppliers enable buyers to look into the details at their own desktop without any transit error along with reducing labour and print cost.

There are various platforms available to build your own ecommerce B2B multi-vendor marketplace. Magento is highly used and advanced ecommerce platform providing full flexibility and scalability.