The growing opportunity in the United States B2B e-commerce market

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The global pandemic outbreak has significantly changed the way consumers shop around the world. In addition to its impact on the B2C segment, the pandemic has also had an impact on B2B transactions. Millennials have now grown up and with the introduction of tech-savvy millennials in the workforce, along with the rapid acceleration of digital trends due to the pandemic outbreak, B2B e-commerce volumes have grown significantly over the last few years. Notably, similar trends are visible in the United States market, where the B2B e-commerce industry is expected to record strong growth over the next three to four years.

In the United States, more and more buyers are turning to e-commerce channels. As a result of this, the number of B2B marketplaces has also surged dramatically over the last few years. According to data from Dealroom.com and Point Nine Capital, a Europe-based venture capital firm, there are 400 B2B marketplaces operational in the United States, and the number is expected to further increase from the short-term perspective. Notably, the number of marketplaces in the United States alone is much higher compared to the whole of Europe, where it is expected that the number of B2B marketplaces operational is somewhere between 260 to 300.

Currently, Amazon Business is by far the leading player in the B2B e-commerce space. According to estimates of Bank of America Securities, Amazon Business is expected to record US$41.5 billion in gross merchandise value (GMV) in 2022. Some of the other leading players in the United States B2B e-commerce market include eBay, Walmart, and Alibaba. While Amazon is expected to lead the B2B e-commerce segment over the next three to four years, other firms are also building up their B2B presence. For instance,

• In Q2 2022, Home Depot recorded strong growth in its revenue, which was largely driven by sales through its B2B platform. Notably, the firm has been focusing on the B2B market with ongoing improvements to its platform and service capabilities. In May 2022, the firm launched new features to its B2B platform, which were aimed to enhance the interconnected shopping and quoting experience for its customers, who are known as Pros. Over the next few quarters, the firm is expected to make further improvements to its B2B platform to further drive growth and attain a bigger share of the growing B2B e-commerce market in the United States.

Like Home Depot, PayNXT360 expects more players in the segment to increase their investment in e-commerce technology over the next three to four years. Notably, buyers are demanding the same experience on B2B platforms as what they receive on B2C marketplaces. Consequently, only having an online catalog and a basic website will no longer attract buyers or drive growth. Thus, if players are looking to capitalize on the growing B2B e-commerce space, they need to increase their investment to build engaging shopping experiences, or else they will continue to lose market share to those B2B marketplaces which are increasing their investment in the online space.

By 2025, the United States B2B e-commerce industry is projected to reach US$4.3 trillion, according to a report from PayNXT360. With the B2B e-commerce market expected to report strong growth over the next few years, even global players are entering the United States B2B market. For instance,

• In March 2022, Expo Bazaar, a subsidiary firm of India Expo Mart, announced the firm is all set to launch its B2B marketplace, which will cater to independent retailers in the United States. Notably, the B2B marketplace will offer thousands of products across different categories, which include home décor, furnishing, jewelry, kitchen, and dining, among others.

As the B2B e-commerce market in the United States continues to record strong growth in the United States over the next three to four years, PayNXT360 expects more global players to expand their footprint in the country. This will further drive competition and innovation in the market. Furthermore, as competition in the space increases from the short to medium-term perspective, PayNXT360 also expects investment in the market to grow significantly over the next few quarters.