- The business-to-business (B2B) marketplace is undergoing a massive shift, according to e-commerce giant Alibaba.
- A survey of 5,000 B2B companies found that US small businesses are optimistic about the economy, and are ramping up their e-commerce operations.
- Faced with declining employment numbers, businesses that make and sell physical goods for other businesses are finding growth by going digital and global.
- Following last summer’s opening of Alibaba’s US B2B e-commerce platform, the company announced the “B2B Tuesday” campaign to raise awareness of the tools and strategies for success in the $23.9 trillion market opportunity.
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The latest salvo in what could be a pitched battle between giants shows just how important small businesses are to e-commerce mega firms.
John Caplan, Alibaba’s head of North America B2B, took a shot at Amazon and other e-commerce companies during a conference call with reporters on Tuesday, suggesting that US business-facing companies would get a better deal on Alibaba’s new US e-commerce platform.
“There are some firms that position themselves as marketplaces, but in fact operate like retailers and eat into the margin of the small businesses that operate on their platform,” he said. “That is not our outlook and how we operate.”
Caplan made the comment during a discussion about Alibaba’s marketplace platform for US B2B purchasers and suppliers, which launched in July 2019, and a small business survey the company conducted at the end of that year.
Business Insider reached out to Amazon for comment, and will update this story when they respond.
Alibaba says it has already connected with over 10,000 businesses across the country, and that the US is the fastest growing supply segment of its global network.
A massive market opportunity for small businesses
While most public attention is on consumer-facing e-commerce, the business-to-business market is far larger — about six-times larger, according to the US International Trade Commission.
B2B represents a $23.9 trillion market opportunity for US small businesses, and Alibaba says its platform is boosting sales for suppliers, improving margins for buyers, and broadening the range of options for each.
Now, rather than bearing the expense of traveling to trade shows and crafting deals in person, buyers can shop for suppliers and negotiate terms completely online.
B2B e-commerce is still an emerging sector, according to the survey, with more than two thirds of businesses reporting that their online operations are less than five years old.
The push toward more digital, global operations could help alleviate some of the struggles that have plagued the manufacturing, distribution, and wholesale sectors in recent years.
According to the most recent jobs data, employment in those sectors was lower in 2019 compared to the year before, and the Alibaba survey found that e-commerce is leading businesses to hire new staff to support online sales.
Stay tuned as BI continues reporting this story.
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