The most commonly used definition for B2B (business-to-business) electronic commerce is that both participants of commerce are traders, enterprises or firms who use the Internet to complete the deal. The process includes releasing supply and demand information, making orders and certifying, paying, issuing, delivering, and receiving notes, supervising the distribution of goods.
Characteristics of B2B in China
There are five trends in China’s B2B market:
- Online small scale foreign trade recently has become a hot topic in the B2B market.
- B2B electronic commerce value-added services of middle and small scale companies is currently rising.
- The profit of electronic commerce service providers keep growing.
- B2B electronic commerce facilitated the switch from the building of an information flow system to a fund flow system.
- The vertical structure of the online B2B market offers company a lot of potential for future growth.
Business structure of B2B enterprises
The business strategy of B2B enterprises is to create a business that can offer other firms something of value in a more efficient manner than if the firm were self-dependent. It also gives the overall strategy to make the system keep profiting. Similar to B2C e-commerce, B2B e-commerce allows businesses to compare B2B services among multiple supplier and choose the company that offers the best product. A direct graphical illustration is given in the picture using the examples of Apple, Walmart, Intel,Google, Dell, Easyjet and Gillette.
Four mainstream B2B modes: Chemnet, Alibaba, efu, 315.com.cn
In China, B2B modes can be summarized into four categories.
- Industry B2B: focuses on a certain industry. The contents of trade and service in the industry B2B is highly professionalized. Over 3000 websites are in this category, among which are ChemNet China (china.chemnet.com) and China Clothing net (www.efu.com.cn) .
- Comprehensive B2B: covers a wide range of industries, but the contents of trade and service are not professionalized. Alibaba is the best example of this category.
- Small portal-league mode: unites small portal sites together and administrates them as a league to provide both comprehensive and professionalized B2B service. Shengyibao(china.tootle.com) and Zhongsouhangyezhongguo(www.zhongsou.net) are typical examples.
- Warehousing mode: provides the traders with online transaction, online paying and distribution services and the money is kept by third party banks. Jinyindao(www.315.com.cn) is an example.
Future developing trends of B2B industry
According to experienced professors and analysts, the future trend of B2B include: merging of vertical search engines and industry websites; putting equal stress on domestic trade and foreign trade; sharing of information from all industries’ websites and creating leagues; paying attention to practical application of the platform; the transition of B2B deals into small B2B deals; introducing the concept of SNS; getting more support from the government; introducing new things to the internet and strengthening the application of information technology.