Growth is driven by emergence of B2B online marketplace platforms

07/19/2022

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Ambev is betting big on Bees, its digital sales service for bars and restaurants — Foto: Márcio Garcez/Folhapress

Marketplace platforms, which bring together products from several retailers or manufacturers, have become a common environment in the consumer’s buying habits. Now, however, it is in transactions between companies that this model is growing at accelerated rates, promising to increase the customer portfolio of the industry, which can also capture data that help to define portfolio strategies, pricing, and even to sell services linked to products.

Ambev, for example, is betting big on Bees, its digital sales service for bars and restaurants. Besides its beers and soft drinks, the group houses in its ecosystem “small stores” of BRF, M. Dias Branco, Pernod Ricard, and Beam Suntory. By the end of the first quarter, the annualized gross merchandise volume sold (GMV) reached R$1.2 billion. BRF itself has teamed up with the technology company VTex to develop a marketplace in Chile.

According to Isaac Pessanha, VTex’s B2B leader, demand from companies for projects for these ecosystems has grown by triple digits. “The market is still incipient in Brazil and Latin America for the potential it has,” adds Erick Buzzi, VTex’s vice president of sales.

The B2B platform model is “currently at the stage B2C [sales to the final consumer] was 10 years ago”, says Guido Carelli, vice-president of B2B at Infracommerce, which develops software for online commerce. This year alone, the business unit headed by Carelli is developing 15 to 20 marketplaces for companies. Unilever’s Compra Agora platform is one of them.

Carelli says the industry began to realize the growth potential of this channel, especially for reaching small and medium sales points, such as neighborhood grocery stores or bakeries. The B2B business already accounts for 30% to 40% of Infracommerce’s revenue.

Data from research firm Grand View Research indicate that B2B e-commerce moved $6.88 trillion in 2021 and that the growth of this market should average 19.7% per year through 2030. Online retail for the end consumer, which is more widespread and experienced a boom in the pandemic, is expected to grow 9.7% per year until 2028.

But the big jumps are likely to come from the marketplaces. The estimate of the British payments research and consulting firm IBe TSD is that they will have a $3.6 trillion turnover in 2024, accounting for 30% of all B2B digital sales. In 2018, these sales were no more than $680 billion.

Among the reasons for creating a B2B marketplace, or joining a platform as a seller, are the ability to expand presence geographically, increase order frequency, and the number of items sold. According to Mr. Carelli, when a company starts selling on a marketplace, its sales can jump by 15% to 25%, depending on the region in the country.

Besides reducing costs by not needing to send a sales representative to the site, the manufacturer has more data about the purchasing habits of small and medium retailers, and the salesperson starts to act more like a consultant, suggesting what the retailer can buy and “reactivate” those who haven’t placed an order in a while, say executives interviewed by Valor.

The B2B marketplace does not come alone, says Pessanha. “It brings potential and the need to reevaluate credit even to foster that ecosystem.” In other words, in addition to selling their products, manufacturers have a better understanding of the credit profile of small retailers that were previously only served by distributors. Thus, the industry can define how much credit it is willing to give to each buyer, either in terms of limits or payment terms.

There are, however, some obstacles to development. One of them is the risk of cannibalization. Carelli says that the pace of emergence of platforms should continue intense over the next five years, but from there on there should be a consolidation.

For Fernando Gâmboa, partner and leader of consumption and retail of KPMG in Brazil and Latin America, although they benefit from working with “raw” market data and start to function as full-service providers, the companies are advancing in the distributors’ territory. “Besides breaking long-term contracts with the distributor, he will stay in the region and may bring in competitors.”

But both VTex and Infracommerce executives affirm that the figure of the distributor does not cease to exist. He can even enter as a seller on the platform, selling items from other companies, they say. “It is not disintermediation. It helps the distributor to increase inventory turnover, to optimize truck use. There is more information exchange,” says Mr. Pessanha.

*By Raquel Brandão — São Paulo

Source: Valor International

https://valorinternational.globo.com/