As per research conducted by Frost and Sullivan, B2B e-commerce sales are potentially valued to be over $6.6 trillion by 2020 globally, while B2C is valued to be worth $3.2 trillion. Despite the high potential, B2B businesses, especially B2B e-commerce companies, have not fully realized their potential due to pain points that still plague the industry.
1. Lack of trust forces lengthy trade finance processes
Online trading of consumer goods poses a big challenge to the trustworthiness of the participants. Securing money for your goods is either cash in advance, thus exposing the buyer, or via trade finance (generally LCs) which are tedious, time-consuming and expensive to process for each transaction.
2. Transaction costs eat up tight margins
Currently, the cost of e-commerce business is anywhere between 5 to 8% or even more on most B2B e-commerce platforms. With high values and low margins, this becomes a barrier to entry for most B2B companies.
3. Lack of operational efficiency with numerous transactions in bulk trade
In our hyper-connected world, global supply chains spread across continents and nations. Yet global trade is still very inefficient. Logistics, insurance, inspections, and documentation are mostly manual and complex, relying on multiple email communication streams.
Does this mean trading companies need to live with these pain points? Definitely not!
Distichain seeks to leverage technology to serve as the middleman that will bring to the ecosystem an unparalleled level of vendor-matching automated supply chain where security replaces the need for trust and relationship building. Trading companies hence can look forward to expounding on the huge potential of their B2B e-commerce business.
This is Industry 4.0. This is the future.
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