For B2B companies in Asia-Pacific, ecommerce has officially arrived.
Firms across the region have taken up the mantle and are developing technology, processes and teams to get their piece of the B2B ecommerce market, estimated to reach US$6.7 trillion by 2020.
Firms in the India and Australia/New Zealand (ANZ) subregions have their various strengths and weaknesses regarding ecommerce, according to a new report by Econsultancy, in association with Magento.
The report, State of B2B Ecommerce in ANZ, Southeast Asia and India, also has a lot to say about Southeast Asian (SEA) B2B firms as well. To get all the details, everyone can download this freely-available report, but below are a few summary points about how SEA B2B companies are differentiating themselves from other subregions in Asia-Pacific with regards to ecommerce.
1) SEA B2B firms have deeper enterprise/ecommerce integrations
For the report, we asked B2B marketers across the region to tell us how well-integrated their B2B ecommerce platforms with internal systems.
From the chart below, the overall integration pecking order is clear. Firms in India, in light blue, are the most integrated across the board, while those in Southeast Asia and ANZ trail behind in most categories. But SEA leads India with ecommerce integration in two categories: ‘CRM/Sales’ and ‘Enterprise resource planning’.
Though only slightly ahead, because SEA is so far behind India with integrating email (75% in India have integrated vs. 54% in Southeast Asia) and supply chain software’ (49% India, 34% Southeast Asia), having a slight advantage in enterprise software suggests a strategic focus in that area.
This may be due to the fact that as firms in SEA are typically present in many countries, the requirement to integrate operations is more pressing than for firms in India and ANZ with large, domestic markets.
2) SEA companies are also better at ‘multichannel’ distribution
The survey also asked B2B marketers to rate their ecommerce platforms across 12 functionalities, shown below.
While, again, marketers in the Southeast Asia subregion rate their B2B ecommerce systems below their counterparts in India, they are more likely than Indian B2B marketers to feel their platforms are ‘good’ in ‘multichannel’ and ‘third-party systems and plug-ins’.
Their lead in these areas may be due to the rise of marketplaces in Southeast Asia resulting in more pressure for firms to integrate than companies in other subregions.
Besides the biggest B2B marketplace in Asia, Alibaba, regional platforms have also sprung up such as:
- Zillingo: A B2B marketplace for fashion wholesalers in Thailand, Singapore and Indonesia.
- Shopee: A Southeast Asia B2C marketplace, now offers a facility for B2B companies to buy and sell in bulk.
- Eezee.sg: A new Singapore-based B2B marketplace with an impressive selection of industrial and wholesale products.
As a result, B2B firms in SEA appear to be moving ahead of other subregions in Asia-Pacific in distributing through marketplaces and other channels.
3) SEA firms are more satisfied with their ecommerce strategies
When asked to name the greatest challenge they face in ‘trying to develop best in-class ecommerce capabilities’, SEA respondents were less likely to choose ‘complexity of business’, ‘lack of strategy’ and ‘lack of boardroom buy-in to provide investment’ than those in India and ANZ.
This result suggests that marketers in SEA are more optimistic about the overall direction of their ecommerce programmes than their counterparts in the other subregions and that they have the top-level buy-in needed to push ahead.
It’s not all smooth sailing for SEA B2B firms, though. Instead of facing strategic headwinds, marketer in the SEA subregion are more concerned with internal issues such as ‘data integration’, ‘company culture / lack of cooperation’, and ‘poor understanding of buyer behaviour’.
So, while they understand their business better and have convinced management of the way forward, there is still some work ahead for SEA B2B marketers to get the whole team aligned with the strategy.
4) The future? It’s all about the money in SEA
Finally, survey respondents indicated which single technology was the ‘most exciting technology-related trend for B2B ecommerce’.
Marketers in India and ANZ chose technologies. Those in India were most likely to choose the internet of things (IOT) and those in ANZ felt that artificial intelligence / machine learning was the trend to watch.
In SEA, marketers appear to be more practical. Respondents from SEA were more excited about ‘payment solutions’ than the other subregions (SEA: 18%, ANZ: 11%, India:12%) and less enthralled with the IoT than marketers in India and more subdued about AI than respondents from ANZ.
One reason why this might be the case is that in SEA companies typically sell in many markets, each of which has its own currency. And as banking fees have traditionally been high and payment times lengthy, B2B firms are likely to be looking to make receiving money easier and being able to offer financial products, such as financing, for the first time.
For more on these and dozens of other topics, please download the State of B2B Ecommerce in ANZ, Southeast Asia and India for free here.
Transport Infrastructure is also a major factor. E.g: Australia and Singapore have relatively good transportation which favours integrated ecommerce, while Hanoi and Bangkok don’t, which favours traditional, hyper-local businesses.