B2B market – how does it change?

31.10.2019 Angelika Siczek
hand turning dices with B2B symbols on them

The B2B market is growing at an extremely fast pace. It is expected to reach USD 6.7 trillion globally by 2020. China comes first, with a market of $ 2.1 trillion. For 2020, the European B2B industry turnover is also estimated to increase by 32%, which will give a value of EUR 2.16 billion.

In Poland, B2C is still the leader. However, entrepreneurs spend ten times more than individual customers. In the years 2011-2014, the B2B market grew at a rate of 21.5% per year. In 2014, B2B online transactions covered 10% of the total, while in 2020 it is estimated to increase to 60%. What does this mean for us?

Where does national and global growth come from?

Thanks to globalization, the Polish market can rise to a higher level and compete both in terms of price and quality. Competing with foreign companies forces Polish companies to implement innovation and improve process management in the company. This, in turn, is followed by the improvement of the offer and increase of customer interest.

Another reason for domestic and global growth is the availability of tools that helps improve the efficiency of processes in the enterprise. Accessibility can be understood here as both their reachability and a wide offer, as well as a lower price. The options are diverse and stand at a high technological level. That is why Polish companies can tailor technological support to their development strategy. They choose modern variants such as cloud purchasing tools and expand the range of options for the course and finalization of the transaction.

Profits of using IT technologies in B2B transactions

A large number of transactions means lower prices and the possibility of lowering the unit margin. A simple mechanism, according to which higher sales means lower and more competitive prices and reduced delivery costs, work in favor of the customer and increase sales even more. Purchase aggregation and the use of electronic tools also increase B2B market share in e-commerce.

The growing B2B segment is also due to the B2C market, which influences the habits and standards existing in online sales. 93% of Polish companies are present on the Internet. However, only 34% place orders online. This number is 14% higher than the previous year. The visible growth of the B2B segment in e-commerce is also due to the gradual modernization and improvement of the level of functioning, and the dynamic B2C market forces technological development and copying good practices from retail customer service. Because the owners and employees of companies themselves make purchases privately, this sector has an impact on company transactions as a signpost for properly conducting transactions. Regardless of the market sector, the motives and requirements for shopping are the same – convenience, speed, reliability and low prices.

What technologies are used?

Along with the increase of B2B share in e-commerce, new tools are being developed to help streamline purchases and improve the transaction process from the very beginning to the finalization. The whole process is called Source-to-Settle, i.e. from the purchase of the goods to the settlement of purchases – in this case as part of the invoice. These tools include eSourcing, which supports the process of obtaining suppliers and offers. Further Contract Management, supporting contract management, eProcurement, whose task is to improve internal purchasing processes (circulation of purchasing documents) and eInvoicing, i.e. tools that automate invoice settlement by combining and organizing them. Additional are Data Analytics, responsible for analyzing and forecasting internal demand and Vendor Management, i.e. tools improving cooperation with suppliers. All these tools work together and build a strong foundation for the most convenient and efficient B2B transactions.

Research on the Polish market shows that technologies dealing with order registration and monitoring their status enjoy the greatest interest. Next, accepting invoices from the supplier, researching internal demand, planning purchases, and finally choosing the supplier or the best offer. Technological development also contributed to cheaper orders. Aleo research shows that thanks to the possibility of aggregating demand and discovering new suppliers, between 10% and 15% of financial outlays were saved. This means more money for the development of other areas of the company’s operations, which in turn increases its results and competitiveness. Then investment in IT technologies improving orders becomes justified.

Participation of Polish companies in IT technologies

So what is the interest of Polish entrepreneurs in IT technologies in the area of ​​e-commerce? In 2014 Deloitte research, portals for suppliers (65%) and online solutions (40%) enjoyed high interest. In the Aleo study, 32% of large enterprises confirm the use of IT platforms to support the purchasing process. In 53% of companies one large system dealt with this, in 47% two or more. However, out of 80% of large companies that use ERP solutions, only 32% declare they have technologies that support purchasing functions. For directors of Polish companies, the biggest technological challenge is the use of clouds and mobile solutions. Research from the eSourcing Forum shows that in 2014 40% of solutions were in the cloud, but a year later this ratio increased to 54%.

How did IT technologies for B2B transactions change the purchasing process?

The largest use of IT technologies supporting transactions is visible among small businesses. Due to staff constraints, they support technological solutions that automate and strengthen negotiations, planning and separate strategic and operational functions. Thanks to this, competitiveness in small companies is growing. The average number of contractors with whom transactions are made increased from 95 to 135 in 2013. At the same time, the time needed to reach the supplier and assess his credibility decreased. For this reason, more companies can afford tenders with more contractors.

The use of technology also shapes the shopping habits of entrepreneurs. In 2013, industry knowledge or contact databases were used in search of a suitable contractor – currently search engines and specialized forums are used. The base of suppliers and information concerning them has also increased. This makes it easier to verify the credibility of the other party to the agreement. All of this reduces the time to complete the transaction, especially in small businesses. It also enables better price negotiation, even with several contractors simultaneously, and the search for better offers in less time. According to Aleo research from 2016, 80% of buyers negotiate prices, and 10% will not complete the purchase without receiving a discount. Purchase targets differ across industries, but 44% say they use IT solutions to purchase ancillary materials, and only 15% purchase raw materials.

Experts’ forecasts for further development of the B2B segment in e-commerce oscillate around becoming similar to the B2C market. This means further simplifying purchases and expanding our reach and cooperation on a global scale. Open purchasing platforms have an annual transaction increase of 20%. This result proves that company directors are increasingly willing to switch to technological solutions, leaving traditional systems. This results in cost optimization – the estimated savings resulting from the use of purchasing platforms can reach up to 15%. According to Aleo forecasts, by 2020 Polish companies will save up to PLN 40 billion. Due to the growing interest in technologies supporting B2B transactions, their development will be even faster and the service much simpler.

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