China’s eCommerce conglomerate Alibaba has made headlines in the B2B community for propelling digital procurement solutions, and according to recent data, the rise of Alibaba has likely encouraged small corporations to jump on board with B2B online shopping.
Reports reveal that iResearch data unsurprisingly found Alibaba to lead China’s B2B eCommerce industry, but that up-and-coming rivals are close behind. Alibaba holds about 34.4 percent of the market’s revenue, reports said, but its closest domestic rival mysteel.com has secured nearly 20 percent growth in 2014.
Overall, the data found that B2B eCommerce operations by Chinese SMEs jumped by 30 percent in 2014. What’s more, researchers predicted that annual growth rate for the market will remain above 20 percent and could hit a valuation of more than $8.5 billion by 2018.
Much of this growth stems from transaction and subscription fees, along with marketing and advertising services provided by startups looking to facilitate digital B2B shopping. The development of digital B2B commerce, reports said, has also boosted the rise of online payment services, notoriety and document verification, and more. Additionally, reports said, the growth of business eCommerce suggests that distrust in the security of online procurement is largely waning.
The most recent findings are significant considering recent remarks by Chinese venture capitalist Hurst Lin, who told reporters last November that the market in China is too young to focus investments in the B2B market. But Alibaba has blown any uncertainty about the ability for B2B to be lucrative in China, many argue. The corporation has recently focused on its B2B eCommerce services by partnering with overseas alternative lenders to facilitate investment in SMEs that will make purchases from Chinese suppliers through the Alibaba platform.