Everyone loves a marketplace. That feeling of wandering around stalls and discovering new products is hard to beat. This is the same philosophy behind digital marketplaces, which are rapidly becoming key battlegrounds in the war for B2B success.

First rising to prominence as B2C environments, digital marketplaces have now found their way into the B2B buying and selling space. Companies seeking to procure products or services for their business needs are finding incredible value in the choice, competitive pricing, and product discovery potential of digital marketplaces.

This is borne out by research from McKinsey which found that nearly three-quarters (72%) of companies that built their own marketplace experienced market-share growth over the past two years. Among those that did not build a marketplace, only 42% of companies saw share growth.

A Meteoric Rise

According to Digital Commerce 360, sales on B2B marketplaces rose by a staggering 131% in 2021 to hit $56.5 billion, with industry predictions expecting it to rise even further to an unbelievable $130 billion by the end of 2022. It’s too early in 2023 to find out for sure if this prediction was accurate, but we so no reason to doubt it at this stage.

For many years, the technology behind digital marketplaces was far too immature to keep up with the needs of the frantic world of B2B buying, and the industry was still fully wedded to the concept of catalogue and sales rep-based purchasing, but the inexorable advancement of ecommerce innovation means that is no longer the case. This was, of course, partly driven by the changes forced upon us by the COVID-19 crisis, but all this did was accelerate a process already in motion, rather than create one out of thin air.

During the pandemic period [2020-2022] sales on B2B marketplaces increased over five times and B2B marketplaces grew over seven times faster than all other B2B ecommerce channels. In the last three years, the number of B2B marketplaces has grown from between 75 and 100, to 400 commercial and vertical marketplaces spread across 18 different industries. In 2020 B2B marketplace sales accounted for 1.8%, or $24.60 billion, of the $1.390 trillion in total B2B ecommerce sales. In 2022 that share increased to 6.9%, or $130.00 billion, of the $1.890 trillion in B2B ecommerce sales.

"B2B buyers, like consumers, turned to websites to make purchases when the COVID-19 pandemic struck in early 2020, making face-to-face transactions impossible in many cases,” writes Digital Commerce 360. "When Digital Commerce 360 asked business buyers in March 2022 how the pandemic changed their buying behavior, the top response, selected by 52%, was that they went to ecommerce sites as they have more selection.”

International Expansion

Aside from providing an elegant way to attract new business and get your products in front of more eyes within the borders of your own country, one of the greatest advantages of embracing digital marketplaces is the way they provide an easily accessible method of penetrating new international markets.

Gaining a foothold in overseas markets can be an expensive prospect as you either need to establish a presence in that country with physical infrastructure and an ecommerce presence which is optimized for that market. However, thanks to B2B marketplaces, it becomes a matter of simplicity to make your products available for sale around the world and easily discoverable by buyers in faraway countries.

"The last few years have seen the rise of B2B marketplaces around the world, especially in Asia which leads the way for B2B ecommerce but also in the US and Europe,” writes Oban International. "Their growth continues although B2B marketplaces remain less mature than the B2C segment. Growth is uneven across industries – they are most prevalent in MRO (maintenance, repair, and operations), food equipment and automotive. Gartner projects that 75% of B2B procurement spending will take place via online marketplaces by 2023.”

Thanks to subsequent geopolitical events such as the COVID-19 crisis, the Russian Invasion of Ukraine, and the UK’s departure from the European Union making international trade significantly more challenging, the role of marketplaces in helping B2B sellers operate in these markets is going to become increasingly critical.

Final Thoughts

The rise of B2B marketplaces is reflective of the changing attitudes of people to doing business using digital means. As increasing numbers of digital natives adopt higher level positions in the B2B buying and selling process, we are only going to see this trajectory continue as traditional methods give way to ecommerce.

B2B marketplaces are sure to be part of the conversation at B2B Connect 2024, being held in June at the Rancho Bernardo Inn, San Diego, CA.

Download the agenda today for more information and insights.