Breaking down the International B2B E-commerce Borders

This week Freightos demoed our breakthrough instant international freight pricing and routing technology at SAP Ariba Live in Las Vegas. This is a great opportunity to take a step back and discuss how B2B technology is making the leap to trade that is truly global (and why it took so long). But first, check out the demo:

B2C Cross-Border Takes Off…

B2C e-commerce sales continue to grow at well over 5% every year, accounting for some 8.7% of all global retail. Within this sector, the fastest growing segment is cross-border e-commerce sales; research from Accenture and Alibaba projects that cross-border B2C e-commerce will explode from $230 billion to $1 trillion by 2020. What’s driving this rapid growth? Less stringent cross-border trade regulations, international fulfillment capabilities, mobile internet penetration, and global e-commerce access.

…While Global B2B Gets Delayed At The Gate

An often-cited Gartner figure from the late ‘90s predicted that by 2004, B2B e-commerce sales would reach $7.3 trillion. It may have taken a while, but we’re finally getting close. In 2012, Frost & Sullivan estimated that B2B e-commerce had reached $5.5 trillion dollars annually. The rub is that the bulk of those sales are domestic.

The good news for B2B e-commerce is that every factor responsible for B2C cross-border e-commerce growth mentioned above has B2B parallels as well. Except shipping.

E-commerce parcel shipments crisscross the world in just days, with easy (and online) pricing, booking and tracking. But global freight remains behind, with the lack of freight digitalization posing an obstacle for cross-border B2B e-commerce. This is especially true given the fact that most B2B e-commerce users are manufacturers or wholesalers dependent on physically moving goods around the world.

International B2B e-commerce is finally on the rise.

Here’s why:

More of the (business) world is online. In 2000, there were 414 million people online. Last year, Facebook alone saw 1.8 billion users, with most of the 2016 user growth coming from outside of Europe and the US – new developing markets that are tapping into the internet for growth.

The export business opportunity is tremendous. It’s no coincidence that both Amazon and Alibaba are aggressively targeting small and midsize businesses in export markets. It’s difficult to ignore the massive potential for growth, and direct market access is a big opportunity to ignore.

Better freight digitalization. The barriers for global freight pricing and routing are finally down. At Freightos, our technology powers international freight automation for over 1,000 global logistics providers, while the Freightos Marketplace enables thousands of small and mid-size businesses to instantly price, book and manage international freight shipments online.
Companies with a global reach need better freight automation. Just managing documentation for one shipping container can cost up to 20% of the price of physically moving the goods while a lack of transparency means even enterprise customers regularly overpay by 30% or more on freight.

With an average freight quote turnaround time measured in days, the advantages of a B2B e-commerce shopping cart plummets. As digitalization permeates the industry, the prospect of supply chain technology integration with B2B e-commerce is critical for global businesses.

The potential to help millions of companies around the world supercharge their global B2B e-commerce  is what drives us. B2B e-commerce has proven itself time and time again on the domestic realm. With integrated global freight pricing and routing, it can now truly go global.