For many companies, the economic crisis undoubted is a huge disaster in this cold winter while it means a great opportunity for B2B companies. With the intensifying economic environment at home and abroad, more companies prefer to conduct business on low-cost and high-return Internet. According to the statistics from the Quarterly Monitoring of China B2B Market in the Third Quarter 2008 released by Analysys International, the quantity of registered accounts on China B2B reaches 580,110,000, increasing 10%, despite the B2B market is growing slowly in this quarter.
Even so, for B2B companies, it is not time to open the celebration, because this prosperity is also hidden behind a huge crisis. The increasingly suppliers on B2B means an increase in the purchase cost for buyers, since they need to “needle in a haystack”-like search for products. The unhappy purchasing experience may cause some buyers to give up B2B platforms. If B2B sales are poor, it can only be a dead end for suppliers and B2B market in this prosperity can only be a flash in the pan.
Internet experts believe that the labor surplus and supply exceeding demand also exist in the B2B market behind the 10% increase. The buyers market lags far behind the speed and range of expanding number suppliers, which makes the competition on B2B platform fierce. The pressure of suppliers grows with the lowing prices of the similar products. Boston Consulting Group survey, based on the depth of the interview of 260 on-line traders, indicates 25% of the suppliers have felt the heavy pressure resulted from the price comparison while another 50% of the respondents claiming such a price comparison bringing great pressure to them.
The resulting pressure even reduces the quality of service. For example, in a B2B platform, if it was 3 suppliers to share a trade lead in the past, it is now 30 enterprises in the snatch. The quality of service suppliers enjoy is bound to drop. What’s worse, it may lead to suppliers trap in the endless price war. How to solve this problem is vital to avoid the B2B platforms to be a flash in the pan.
Internet expert regard that quantity of suppliers on an ideal B2B platform is about 100,000 under current situation. It seems that the growing number of suppliers means lower price and more choice for buyers, but that is not the case. As more suppliers emerge on-line, buyers will have more and more difficult for the right to select their own products. Everyone knows that the result of needle in a haystack-like search is not ideal, or even unable to pin. Any industry has its own capacity. Once excesses it, it will be counter-productive. For example, when searching on Baidu, very few people will look up the 30, 40 pages. In this case, searchers will give up without result, even if they may find the information they need on the page of 45. The same reason can also be applicable in B2B for purchasing products.