B2B e-commerce Platforms and the Consumer Goods Distribution Value Chain

By Lere Ojedokun

International rating agency eMarketer estimated that the global e-commerce sector would be worth USD27 trillion in 2020. This may not be anything near what the world’s e-commerce market expected when Phil Brandenberger of Philadelphia, the man famed to be the initiator of the e-commerce revolution, made his first purchase on August 11, 1994.

Prior to 2012 when this revolution extended to the country, most Nigerians used to hear of people who shop at the comfort of their homes and have their orders delivered to them. This used to be one of those foreign stories, told by the privileged few who have lived overseas.

Today, e-commerce has grown to become a big part of Nigerians with many platforms offering general and specialised products and services. The burgeoning market could only be as a result of the many benefits that accrue to all the touchpoints in the value chain – e-commerce platforms, manufacturers, wholesalers, logistics services providers, customers and many others.

The success of the e-commerce platforms in the country, which play mostly in the business-to-customers (B2C) subsector spurred many other players who see a big opportunity in extending such services to the business-to-business (B2B) subsector.

In the past few years, many platforms like Alerzo, Omnibiz Africa, Wabi Nigeria, Chooya etc have sprung up and are helping to facilitate the estimated USD100+ billion informal retail market in the country.

Just like the B2C e-commerce platforms are positively touching the lives of their stakeholders, the B2B platforms, with their niche offerings, are positively facilitating the businesses of their stakeholders, especially the manufacturers, the wholesalers and the retailers, who have latched onto their platforms.

Among other things, the manufacturers and distributors benefit from the logistics services offered by platforms like Alerzo as these platforms transport the ordered goods from manufacturers’ and distributors’ warehouses to the target retailers, scattered all over the country at no cost to these manufacturers and distributors.

Perhaps, one of the most strategic offerings of the B2B e-commerce platforms for manufacturers and distributors in the country is market intelligence. They collect data of, and develop insights around, consumer behaviours and preferences.

Manufacturers and distributors can partner with these B2B companies to share these insights and use them to guide their production and supply respectively, ultimately giving them a better understanding of their end consumer.

For the retailers, the B2B e-commerce platforms have not only boosted their profitability but have also reduced the burden that comes with the day-to-day running of their businesses as well as making their businesses more sustainable.

These platforms buy from the manufacturers and/or the big-time distributors at good prices and through their scale sell to the informal retailers at prices below what are obtainable in the open markets where third party costs are factored into the prices.

Another major gain of the informal retailers from the emergence of the B2B e-commerce platforms is that they can sit in the comfort of their shops or homes and, with a click of a button on any of the multiple channels open to them, restock their shops. Alerzo, for instance, enables this through its retail app, Alerzoshop.

Some of these B2B platforms even go the extra mile of delivering these retailers’ orders to their shops at no extra cost to them.

For example, Alerzo has been delivering the orders of the over 80,000 informal retailers across the country who have signed up to its platform, and in the process, is elevating their health status, improving their quality of family life and saving them huge resources that would have been expended in the running of their businesses.

The icing on the cake for these retailers is that many of these B2B platforms offer book-keeping applications for retailers to track their sales, cost, price, profit and manage their customers, as well as payment platforms (which manufacturers and distributors can also take advantage of) like AlerzoPay and Veedez by Alerzo.

With an increasing number of retailers adopting smarter ways of doing business, it is expected that more manufacturers will take advantage of this trend, especially in a growing competitive market.

Lere Ojedokun is a Communications Expert based in Lagos