We all use eCommerce – essentially anything transacted online – virtually every day of our lives in some shape or form. It’s growing, it’s broadening and it’s covering the globe.
It really started in the US and today the North American eCommerce market accounts for more than a third of global traffic. The US is being challenged, however, by Asia and in particular, China, which is expected to grow enormously over the coming years.
The popular interpretation of eCommerce is that it’s mostly consumer-driven. It is true that eCommerce’s initial explosion was driven by B2C (business-to-consumer) business, and the most successful e-tailer in the US is Amazon.com, which reported sales of USD 80bn in the US in 2014. But you only have to witness the number of packages being received every day from Amazon to be aware of its huge presence everywhere in the world.
There are essentially three forms of eCommerce: B2C which we are all familiar with; business-to-business (B2B); and consumer-to-consumer (C2C), which includes websites like eBay. These all contribute to what is currently an exciting sector in the US.
The B2B segment is still in its infancy to some extent but there are very optimistic predictions for its growth trajectory. A year or so ago, forecasts from Frost & Sullivan, a market research consultancy, suggested that total B2B eCommerce sales worldwide would reach USD 6.7tn by 2020, while a Forrester Research forecast anticipated US B2B eCommerce sales would reach USD 855bn in 2016. At the same time, Accenture/Blackstone’s survey in 2015 revealed eCommerce sales accounted for less than 10% of total sales for half of US B2B companies.
So there’s momentum, but also plenty of upside to be leveraged. Increasingly, companies are making investments in eCommerce platforms and functionality. And according to Forrester, B2B companies are growing significantly faster than their B2C counterparts.
There are many verticals in the payment space when it comes to eCommerce and businesses like Stripe, Uber – to name just two – are looking for swift solutions that combine speed to market, greater efficiency, and of course, transparency. This can be achieved in a number of ways, either through direct relationships with eCommerce platforms, or through the relationships held by financial institutions.
For example, in the case of Earthport, the banks can easily adopt our ‘plug and play’ solutions. This is not only extremely efficient but also encapsulates the spirit of collaboration building between banks and fintech companies. In fact, this has already yielded impressive results, as the banks that have adopted our services are winning more mandates because of the diversification they can now offer.
Many companies are still trying to work out what’s out there in the B2B segment and exactly what they really need to be competitive in tomorrow’s world. It’s our goal to ensure that our clients in this space are able to meet the anticipated growth in demand across the eCommerce industry, whether it’s in retail or business-to-business.