In this first article of a new series, we examine the meteoric rise of B2B marketplaces in the wake of the pandemic – and what’s likely to happen next.

While the first-order effects of the 2019-22 pandemic on payments and banking are widely understood – from the switch to NFC contactless payments through to the rise of click-and-collect ordering and more – some huge shifts in corporate and consumer behavior have gone relatively unremarked. In the Business to Business (B2B) segment, the rise of online marketplaces as a channel for B2B commerce may be one of the least-examined phenomena – perhaps because it began in emerging markets. Despite flying under the radar, so to speak, Fact and Factors forecasts that the B2B e-commerce market will reach US$ 18.6T by the end of next year,[1] suggesting that such marketplaces are serious business.

B2B marketplaces originated in China in the middle years of the last decade through players such as Alibaba and others. However, they have since emerged in other regions, particularly in India, South-East Asia, and Latin America, as the digitalization of SMEs globally gathers pace. While we cover global SME digitalization in detail elsewhere, it’s relevant to note that SMEs world-wide increasingly expect the same speed, security, and convenience they find in online shopping at home when it comes to their business environment. This factor – plus SMEs’ growing comfort with digital banking and payments – is driving B2B marketplace growth.

Despite A Dip, Investors Continue To Support Growth

                                                                  Source: Pitchbook

For several years, investors responded enthusiastically to this opportunity, with funding for B2B marketplaces reaching a peak of US$ 7.1B in 2021, driven by IPO activity for GoTo and Bukalapak that each raised more than US $1B. While overall funding for marketplaces as a category has fallen over the last four years, 2023 saw US $6.3B of Venture Capital (VC) funding for B2B marketplaces.[2] This suggests that, while the peak of 2021 may now be in the rearview mirror, B2B marketplaces have survived the infamous “hype cycle” and are now set fair for continued growth.

Where Growth Is Happening – And What’s Next

India is the most developed market for B2B Marketplaces world-wide, with a large number of established players, serving both Mom & Pop shops (“Kiranas”) as well as larger buyers. ASEAN is the second hotspot, with Indonesia leading the charge, while Vietnam is catching up. EMEA (including Pakistan) is a differentiated region: while there is a lot of activity in Pakistan, following India’s example, specific models are in evidence in Western and Eastern Africa that connect producers with informal retailers. In Latin America, marketplaces are typically funded directly by large FMCG players such as ABInBev, Unilever, and Coca-Cola.

Major Players From Leading Regions

                Source: KoreFusion analysis

Future growth in B2B marketplaces looks certain considering that B2B spending as a category is less subject to economic uncertainty and oscillatory consumer spending than its B2C counterpart. Furthermore, the underlying trends driving the development of B2B marketplaces are accelerating, from the digitalization of SMEs in emerging market through to their increasing adoption of technology and need for greater operational efficiency. These factors may lie behind projections from Grand View Research and others that global B2B marketplaces will see turnover rise by 18.6% CAGR out to 2030, for total revenues of more than US$ 50B.[3]

The next article in this series will consider the five different sectors of economic activity in which B2B marketplaces are growing fastest – and the business models they’re using to power this success.

KoreFusion optimizes SMB payments strategy across 80 countries. We help banks, brands, and fintechs develop embedded payment and financial services for SMBs.

[1] Fact and Factors, 2022, “The B2B e-commerce market”: https://www.fnfresearch.com/business-to-business-e-commerce-market

[2] Adevinta, February 2024: “New Marketplaces Report 2023”: https://adevinta.com/wp-content/uploads/2024/02/Adevinta-State-Marketplaces-Report-2023.pdf

[3] Grand View Research, 2024, “Global B2B Marketplaces, 2024-2030”: https://www.grandviewresearch.com/industry-analysis/business-to-business-b2b-e-commerce-market.