B2B is a different game but in the longer term, it is a sustainable e-commerce model
Arif Chowdhury was having a hard time with his online business-to-business (B2B) platform Shodagor.com before the coronavirus pandemic, as people had trust issues regarding such platforms. As chief executive officer of his venture, he tried to sign deals with the corporations and other big dealers, distributors and large-scale sellers, but no one showed any interest in coming under his platform. Only a few small-scale and remote distributors and retail sellers trusted his offers and responded.
"But everything changed when the country went into lockdown. As people had no other option but online platforms for safe, contactless and easy delivery of products, the shift happened," said Arif.
"Another thing that brought traction to my site is transparency. Any visitor, whether a potential buyer or not, can see the price - which will never happen in physical outlets."
Arif did not even advertise his site, but he started to receive orders for items that he never thought of introducing to his website before, such as rice. He sold 150 tonnes of rice during the lockdown.
From everyday necessities to health equipment to groceries – you can find anything in bulk at wholesale price on Shodagor.com. Now, even though lockdown has been partially lifted, orders have not dropped.
"Interestingly, many big corporations knocked me during this period and they are satisfied with my service," Arif told The Business Standard.
E-B2B is a type of business model where exchange of goods and services take place between two or more businesses online.
Regarding the future of B2B in Bangladesh, he said, "I do not see any chance that this business will fall unless any party resorts to syndication. Corporations faced problems with procurement process in bulk orders. Now, they are getting everything under one umbrella."
A national digital magazine Bangladesh Brand Forum reported B2B e-commerce has been experiencing a massive surge in demand. Sales have increased by 52 percent and the number of shoppers by 8.8 percent since the pandemic began.
Arif thinks he has been able to win the trust of corporations, and they will not leave because of the comfort of having authentic products and organic, fresh food at your doorstep just a click away. "Procurement process has always been a hassle for the corporations. Who does not want a hassle-free and quick delivery?"
The pandemic has created a scope for B2B to grow. The Healthcare World in a report said the US saw a 30 percent increase in traffic on B2B sites. The rise was mainly in life science and pharma industries as the demand for these products increased dramatically for coronavirus-related research.
"While buyers have turned online, many suppliers have adapted their strategy to foster online sales, dedicating a portion of yearly budget to digital marketing and communications. The current coronavirus situation is imposing digitisation on any B2B business," the report pointed out.
E-CAB General Secretary Abdul Wahed Tonmoy also thinks the B2B model has a huge prospect in Bangladesh. "The business-to-business model has been running traditionally for years. E-CAB has a plan to bring it under an online platform. We have different plans and initiatives to promote this model. This sector has a potential to grow online."
Besides rising demands for everyday goods, healthcare equipment and groceries, apparel leaders, under their apex body the Bangladesh Garment Manufacturers and Exporters Association, recently proposed developing a virtual market platform in an effort to sell the cancelled clothing orders worth billions.
Due to the Covid-19 pandemic, global buyers have cancelled orders of around $3.08 billion in around 1,150 factories in Bangladesh.
Regarding why Bangladesh wants to move to an online platform, BGMEA President Rubana Huq told The Apparel Resources, "Buyers have cancelled orders worth billions of dollars, which are now lying in the factories as stocks and need to be done away with in the most feasible way."
"Besides, the coronavirus pandemic will now significantly shift the world market from physical stores to online. Therefore, we feel the necessity of our own virtual marketplace platform," she added.
One of the directors of the BGMEA, Md Mohiuddin Rubel, also the director of Denim Expert Limited, said, "Obviously, we should move to the B2B marketplace. We even need to think aggressively about B2C (business-to-consumer)."
"This pandemic has changed the entire landscape of the fashion industry. From raw material suppliers to consumers – online marketplace will gain momentum as even after the lockdown, people will still maintain social distancing," he explained.
Rubel thinks another reason why online will be of great convenience to consumers is its ability to deliver the same quality of products at further cheaper prices.
"Tech companies are working to make the virtual shopping experience livelier and easier. So, we can expect online, by all means, will itself be a big marketplace. Every crisis creates opportunities, and this is the time for us to work on it right now."
B2B is a different game but in the longer-term, it is a sustainable e-commerce model. Hence, seeing this sector as an investment opportunity, regional and global venture capitalists are betting on it. Amazon, Alibaba did quite well even during the pandemic. Now, as times have changed, investments in this sector might be a turning point.