ECOMMERCE

EMERGING B2B ECOMMERCE TRENDS

A SURVEY DONE BY TRADELING SHEDS LIGHT ON KEY LEARNINGS EMERGING IN THE B2B ECOMMERCE SECTOR AND OUTLINES HOW THE PANDEMIC CAUSED MANY BUSINESSES TO VIEW ECOMMERCE IN A NEW LIGHT

The COVID-19 pandemic has radically altered the trade sector creating more opportunities in the eCommerce domain. A study release by Tradeling, the eMarketplace focused on business-tobusiness (B2B) transactions in the MENA region, has highlighted five key new trends in the B2B eCommerce sector.

The White Paper, Pivoting to Digital: The Transformation of B2B eCommerce in the Middle East, shows how the unprecedented challenges brought on by the global pandemic necessitated a new model of retail that is driven online.

The top findings of the survey, one of the first authoritative studies on the impact of the COVID-19 pandemic on trade and business confidence in the region, focused on five key areas: business community, growth industries, eCommerce, small and medium-sized enterprises, and COVID-19.

A new perspective

Dr. Mohammed Al Zarooni, Director General of Dubai Airport Freezone Authority (DAFZA), said: “The study serves as a blueprint for both the public and private sector by providing an informative and unique perspective on the UAE and Saudi Arabian business community and shows how they are using B2B eCommerce.”

He added: “The findings of the Tradeling Pivoting to Digital survey reveal the unique complexities and opportunities in the world of B2B eCommerce. The results from the UAE and Saudi, two of the most active markets in the GCC, provide evidence-based insights on a new fast-tracked digital world brought on by the pandemic.

“Whatever held back the growth in eCommerce for nearly two decades, especially in the Middle East region, has disappeared. At the height of the pandemic, customers had little choice but to resort to online shopping, and with it the floodgates of business opportunities opened.”

Dr. Mohammed Al Zarooni, Director General of Dubai Airport Freezone Authority (DAFZA)

The study evaluated the immediate impact of COVID-19 as well as the role of B2B in mitigating it. Marius Ciavola, CEO, Tradeling, said: “We are honoured to present this study, which reiterates our commitment to working together to building a strong trade sector that will continue to be one of the key contributors to the economy.

“This white paper follows the success of Tradeling’s business model, which encouraged us to study the marketplace further, especially given the lack of informed data on B2B eCommerce. While there are several studies on consumer eCommerce, online B2B trade in the region has gained little attention from researchers, primarily because it has been fragmented in its delivery and continuity.”

Adapting to new realities

Nearly two-thirds of all respondents in the UAE and about half (49%) of Saudi businesses surveyed said the pandemic has had a negative impact on their business.

However, most companies (79%) expect to make a complete recovery by the end of 2022, and over half (57%) are confident of a business recovery by the end of this year. Businesses reported an increased use of B2B eCommerce due to the pandemic with 82%, on average, citing that their use has increased.

B2B eCommerce has had a positive impact on businesses in adapting to a new reality with most businesses opting to conduct transactions online as opposed to in person due to COVID-19.

Evaluating the market sentiment, a year after the pandemic, the top finding shows that businesses expect to rebound strongly, with greater investment and higher employment in the year ahead.

The survey showed that more than half of businesses (52%) said conditions are ‘good’, highlighting the return to a more positive market sentiment. Positivity about the current market conditions is highest in Saudi Arabia, especially among businessto-consumer companies and more senior employees.

In the UAE, while 45% said the existing business condition is ‘good’, 41% said it is neither ‘good’ nor ‘bad’. In Saudi Arabia, 60% of respondents had a positive outlook, with 31% saying the situation is neither ‘good’ nor ‘bad’.

Positive market conditions

Asked specifically on the status quo to business-to-business customers, 50% of respondents in both countries said the market conditions are ‘good’.

“WHILE THERE ARE SEVERAL STUDIES ON CONSUMER ECOMMERCE, ONLINE B2B TRADE IN THE REGION HAS GAINED LITTLE ATTENTION FROM RESEARCHERS, PRIMARILY BECAUSE IT HAS BEEN FRAGMENTED IN ITS DELIVERY AND CONTINUITY.”

Most respondents, especially in the UAE are optimistic that business conditions will significantly improve a year from now, with over three-quarters (78%) in the country sharing their optimism on the business environment improving, compared to nearly two-thirds (68%) in Saudi Arabia.

The positive outlook reflects in more businesses expecting to hire further employees as well as increasing their business investment. More than one-third (43%) said they expect the number of employees in their business to increase in the next year.

Similarly, when asked about their expectations on investment in their business over the next year, more than half (53%) said it would increase, compared to only 32% who said investment levels will remain the same, and 15% forecasting a decline.

The survey found that eCommerce and technology are set to outpace other sectors of the economy in the coming years as they increasingly leverage digital opportunities both in B2B and B2C trade.

They see a strong outlook for eCommerce in the medium and long-term, building further on the gains achieved in recent months, as enterprises pivot to a ‘digital-first’ model to engage with their customers.

In the UAE, 86% of businesses feel technology will assume greater significant followed by eCommerce at 84%, while both sectors are perceived to grow in importance in equal measure by Saudi respondents at 73% each.

Artificial intelligence (AI) and Machine Learning are seen as the most important technology impacting business overs the next five years. Specific to B2B eCommerce, 56% of all respondents see AI as the biggest gamechanger.

Online shopping

The study shows that eCommerce is increasingly becoming a preferred platform for purchasing business supplies in both countries. Nearly half (46%) of all respondents said they primarily purchase online.

Most businesses in the UAE and Saudi expect the use of eCommerce to become universal in the coming years with more than four-fifths (82%) of respondents saying businesses will use more B2B eCommerce eventually.

However, respondents said one of the challenges in driving B2B eCommerce will be the need to strengthen online payments as many businesses in the region use physical payments for supplies. More than two thirds (68%) of respondents said they still make physical payments such as cash or cheques on all orders.

IN THE UAE, 86% OF BUSINESSES FEEL TECHNOLOGY WILL ASSUME GREATER SIGNIFICANT FOLLOWED BY ECOMMERCE AT 84%, WHILE BOTH SECTORS ARE PERCEIVED TO GROW IN IMPORTANCE IN EQUAL MEASURE BY SAUDI RESPONDENTS AT 73% EACH.

A large proportion of small and medium-sized enterprises believe that B2B eCommerce offers them opportunities to expand and diversify adding that they are more optimistic that B2B eCommerce will allow a more scalable and diverse range of SMEs to emerge from the region.

Eighty-three per cent of all respondents also agreed to the statement that B2B eCommerce will help local SMEs scale by finding new customers across the region and globally.