According to a report by venture capital firm Bessemer Venture Partners, business-to-business (B2B) marketplaces will fuel the next phase of growth for India’s digital economy.
Online-first, tech-enabled B2B marketplaces are estimated to present a USD 200 billion market potential by 2030, up from USD 20 billion in 2022. Despite the predicted growth, online B2B Gross Merchandise Value (GMV) would account for only 5 per cent of total B2B sales in India by 2030, compared to the present market share of 1 per cent, according to the analysis.
According to the report titled The Emergence of B2B Marketplaces in India, the share of online B2B sales in China stood at 25%, followed by 20% in the UK, and 18% in the US markets. The report identifies three key opportunities in the B2B marketplace space, including product, services, and infrastructure marketplaces.
The report indicates that accessibility of online payments and availability of government-backed ecommerce such as ONDC and rails for credit through OCEN will plan into the growth of online B2B transactions.
It also highlights key hypotheses determining the performance of B2B marketplaces in India, including a vertical approach to building deeper supply lines, addressing fragmented markets, and implementing software solutions to eliminate inefficiencies to rise above the role of a distributor.
The key drivers for B2B marketplace growth in India are online penetration, developed digital infrastructure, amenable regulatory policies, and a conducive cross-border environment, the report highlighted. As of 2022, two out of three MSMEs in India have adopted tech in some form, while nearly 15 million of the overall 60 million MSMEs are expected to transact on online marketplaces over the next four years, report said.
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