India has been catching global attention for its B2B market in recent months. Retail giants, including Amazon and Walmart, are setting up digital shop in the nation to help buyers and suppliers connect and transact online, while India’s B2B startup community is touted as one of the world’s most robust and innovative.
Walmart appears to be progressing forward with its support of B2B eCommerce in India, too. In reports published late last week, Walmart revealed the results of its latest report on the sector. According to the findings, India’s B2B eCommerce industry holds a current valuation of $300 billion and could rise as high as $700 billion by 2020.
Entrepreneur India discussed Walmart’s findings with B2B eCommerce player Tolexo.com and its CEO and Founder Brijesh Agrawal.
According to Agrawal, there are several key challenges ahead for B2B online shopping to truly take off in the nation. Among them are an increased use of technology by suppliers and, on a deeper level, an increase in the trust of online consumers that may be skeptical of digital procurement.
Gaining trust with business customers can be more difficult than with B2C consumers, he said, considering the higher transaction cost of a deal.
Further, he added, India’s market is highly fragmented, with many sellers focused on a single geographical area. As B2B eCommerce increases, there will be new challenges for the logistics side of operations, including the assurance of reliable delivery to business buyers.
According to the Tolexo official, startups in the industry should focus on the customer experience, considering the relatively long lifetime value of a B2B customer. If the startup community can overcome these challenges, Agrawal said that the nation will be at the forefront of B2B eCommerce.
“After [the] U.S., India is going to be the most important market globally,” he said. “The opportunity for growth that India offers is tremendous.”