B2B Payments

Koble Reflects On What Trade Disputes Mean For B2B Matchmaking

Understanding who one is doing business with is the first step to mitigating a myriad of risks, including non-compliance, non-payment, violated contracts and more. For decades, business partners have gathered at in-person meetings, conferences and networking events to do business, with the physical business card hand-off as a vote of confidence in a potential new client, service provider or vendor.

In today's age of tightening Know Your Customer (KYC) regulations, Know Your Supplier has also become an equally important priority in B2B trade. It's not surprising, then, that for many businesses, the in-person networking events are more popular than online networking platforms.

That's especially true in Asia, said Fabrice Saporito, founder and CEO of B2B matchmaking platform Koble.

"Asian small and medium-sized enterprises [SMEs] are a bit behind their U.S. peers when it comes to turning online for building professional connections and engaging new buyers or suppliers," he recently told PYMNTS. However, Koble research suggests that if small- to medium-sized businesses (SMBs) in the region had to choose a digital method to connect with buyers and suppliers, they would choose "online networking" over email marketing campaigns and "word-of-mouth virality."

SMBs may step into the world of digital networking by using existing platforms, like social media sites or professional networking tools, that are not designed to facilitate a sale between a buyer and supplier, Saporito explained. Indeed, research from ThomasNet in its 2018 Industrial Buying Habits Report found Google to be the most common digital platform for companies to source and connect with suppliers. Platforms like these also lack the appropriate verification checks and processes that can provide companies with the assurance and security they need, which they might otherwise feel is lacking when connections are not made in person.

Koble recently announced its entrance into the Asian market through a collaboration with Malaysia-based telecommunications conglomerate Celcom Axiata Berhad. According to Saporito, because SMBs in this market are less confident in online B2B networking, digital solutions must work alongside companies' current strategies.

"If Asian businesses start to see that online relationships they are creating are mutually beneficial and positively impacting their bottom lines, they'll be much more willing to continue developing relationships online, alongside the ones they are developing offline," he said.

While Koble's latest partnership has the company focusing on the unique characteristics of the Asian market, the challenges of connecting buyers and suppliers share commonalities across jurisdictions. For example, Saporito noted, smaller businesses in any market tend to feel more comfortable working with partners within their own jurisdictions. Yet, in today's global market, large enterprises must reach out to vendors beyond their countries' borders and simply cannot afford to remain local.

"There is often a need to connect with truly local suppliers that are far outside of their own region and within many different corners of the globe," he said, adding that multinational firms need local suppliers that understand their prospective markets. "They already want these regional specialists around the world, and they also want to diversify suppliers in their supply chain across many different parameters."

So, while online networking solutions can support this need for cross-border buyer-supplier relationships, ongoing trade tensions and uncertainty have complicated the process and limited trust between potential partners at least at the macro level, said Saporito.

At the same time, the vast majority of executives are not able to gain transparency into their supply chains. Deloitte's Global CPO Study 2018, published earlier this year, found a mere 6 percent of chief procurement officers have full supply chain visibility  a finding that Brian Umbenhauer, Deloitte principal and global head of sourcing and procurement, described as "worrying," particularly in the context of compliance.

Ongoing geopolitical events  including Brexit, U.S. trade disputes and other European-based movements impacting global supply chains — are making it more difficult for buyers and suppliers to connect and trust each other, Saporito said. For businesses in markets like Asia, which may be more reluctant than others to connect online, changing trade rules and rising supply chain risks may further limit their willingness to use digital B2B matchmaking channels.

Deloitte's survey found procurement leaders are taking a more cautious approach to technology, too, as teams prioritize cutting costs. More procurement officials in 2018 were "lukewarm" on the prospect of new technology than the year before, with only 6 percent of survey respondents predicting their digital procurement strategies to boost overall enterprise value.

At the same time, however, agility in connecting with buyers and suppliers is a necessity that digital channels can provide, according to Saporito, who noted that opening up supplier-and-buyer discovery online provides "new, alternative routes for trade to those that may get caught in the heat of trade disputes."

"And needless to say," he continued, "quickly finding new opportunities becomes essential, as internal markets are unlikely to absorb demand and growth-oriented investments must find a return. While there may be mistrust at the macro level, we believe that enterprises, among themselves, will continue to seek new sources of business."



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.