COVID-19 has caused many problems for most of the world over the last year and a half. This pandemic has caused many small and medium-sized companies (SMEs) focusing on B2B to suspend or halt operations.
To increase their chances of survival, many of these businesses will start to turn to new systems and methods. The best strategy is to go digital with the aid of an online B2B marketplace like Alibaba.com.
Today, we will look at how the B2B trade has fared throughout the COVID-19 pandemic. We’ll share all the challenges that B2B SMEs have faced due to COVID-19 and look at a few features Alibaba introduced to assist SMEs through this difficult time.
Overview: B2B Trade throughout the COVID-19 Pandemic
The COVID-19 pandemic has harmed B2B. We’ve seen many shutdowns and pauses generate a slew of problems, forcing distributors to get innovative to keep things going.
Let look at a snapshot of COVID-related shifts and changes in the B2B space since the start of 2020:
- Lockdowns around the world due to the fast-spreading of COVID-19 caused supply chain disruptions and shortages.
- Digitalisation became an essential force to help the B2B trade survive in the market.
- B2B e-commerce platforms such as Alibaba became essential for B2B trade.
- Digital sales procedures have been as successful or more effective than traditional sales processes for most B2B SMEs.1
- India, one of the world’s top manufacturing countries, experienced a deadly spike in cases, causing new supply chain disruptions. 2
- Over 80% of B2B buyers have made online purchases on a weekly or monthly basis.
- Supply chain optimisation has become more important than ever.
- More than 85% of B2B SMEs are now confident about the futures of their business.
4 Challenges B2B Businesses Faced during the Pandemic
The COVID-19 pandemic presented numerous problems for B2B firms, but there are a few underlying concerns worth mentioning. Some of these difficulties have been rectified to some extent, but the consequences are still being felt today.
In-Person Interactions Halted
Although doing business over the internet is feasible, most B2B trading used to be done in person at trade fairs and other such events. E-commerce was largely employed in the B2C market before the pandemic, but B2B systems were not often set up for online sales.
Lockdowns were a perfect solution to limit the spread of the coronavirus and “flatten the curve” because it is such a dangerous disease. Therefore, in-person events could not be held and were cancelled. These cancellations put B2B buyers and sellers who were used to making connections and forming partnerships at in-person events in a tight spot.
If businesses weren’t able to move online, the situation could’ve been a much bigger issue. However, many B2B SMEs adapted and adopted e-commerce to keep things running.
Supply Chains Disrupted
The outbreak of COVID-19 caused several factories to shut down to prevent the spread of the virus and protect workers. Some factories had to close for weeks or months, such as in Malaysia when MCO, MCO 2.0, and FMC0 was launched. Naturally, this production snafu resulted in many manufacturers’ operations being held up, causing severe supply chain disruptions.
Even if most of the globe has returned to some sort of normalcy, we are not out of the woods yet. In fact, a recent spike in COVID-19 cases in India has created new supply chain disruptions. Some Indian states have implemented tight shutdowns, forcing factories to close for the time being. These shutdowns affect not only India but also many other countries because India is one of the top manufacturing nations. Although the manufacturing industry has invested in other countries, all the needs in the market are yet to be fulfilled.
Raw Materials Prices Increased
Shortages of raw materials also caused price increases that have affected wholesalers, manufacturers, and buyers across the board. It’s simple economic theory: When demand increases but the supply is reduced, the result is a shortage of raw material in the market.
Paints, coatings, polyurethane, foams, adhesives, glues, epoxy resins, and other similar products were among the most severely affected. The average price of these resources has increased due to decreasing supply and stable demand.
Many shortages were caused by materials used in packaging. Because most items require packaging, this shortage was particularly problematic. It impacted both buyers and distributors in almost every business.
Freight Rates Increased
Freight rates were another notable challenge presented by COVID-19. Air and ocean are the two most popular types of freight in international trade, and they also faced issues as a result of COVID-19.
Passenger planes carry most air freight, so when travel restrictions were imposed, and the number of commercial flights dropped considerably, air freight options were scarce.
Consumer spending shifts during the pandemic caused retailers to rearrange their inventory accordingly. They sourced more units than usual, and trade between Asia and North America significantly increased. Boats that regularly transport cargo on this route could not return quickly enough to pick up more loads, resulting in yet another scarcity.
The limited supply and increased demand also caused freight costs to increase. Distributors and retailers were in a difficult position because they needed to either absorb the extra costs or raise prices in the midst of a worldwide economic downturn. Each business was given the freedom to choose the option that made the most sense for them.
6 Ways Alibaba.com Supports B2B SMEs
Alibaba understands all the challenges faced by B2B trade and has stepped up to the plate to provide additional support to get through this pandemic. In addition to its regular feature offerings, it also amped up its tools designed to facilitate online trade to accommodate the rapid need for digitalisation in the B2B space.
Let’s look at the six features available to sellers on Alibaba.com and the key points you should onboard from Alibaba.com for global trading.
Frequent Online Trade Shows and Expos
When the pandemic started, the Alibaba team put a lot of effort into hosting online trade shows and expos as frequently as possible. They created a platform for buyers and sellers to connect, network, and make deals.
Alibaba not only offers general events for buyers and sellers in all sorts of industries but also organises industry-specific events. Some events are export-specific and geared towards sellers who want to tap into foreign markets. For example, this year, in addition to the annual promotional exhibitions March Expo and Super September, Alibaba will hold ten other holistic or category-specific online trade shows for leading categories such as apparel, home and garden, and beauty and personal care.
As a result, Alibaba.com has already seen a significant increase in transactions at a tradeshow in March. Sales increased by a staggering 50%.
Alibaba also rewards high-quality vendors and professional buyers with benefits. For example, qualified members can enjoy breakout areas for more intimate meetings. This simplifies the process of locating outstanding items for both consumers and sellers.
Enhanced Global Gold Supplier (GGS) Membership
Alibaba rolled out more perks for GGS members this year. Qualifying, highly rated sellers have access to enhanced features to grow and propel their businesses.
The update features include an improved onboarding process that allows vendors or sellers to publish and set up smart tools. It also features post boosting, which is designed to enhance product visibility and conversions by up to 15%.
The enhanced membership also comes with resources and educational materials to help sellers streamline and optimise their responses to inquiries to help them close deals.
*Interested in learning more about Alibaba’s GGS? Visit our product page here.
Localised Team Support
In the last year and a half, the Alibaba team noticed that many B2B SME owners and operators have had to navigate totally unprecedented circumstances with very little guidance. Therefore, Alibaba has increased its available support. The team is educated and trained to help owners and operators make the best choice for their companies. They stay up to date on current trends, challenges, and issues to help you navigate through confusing situations.
This advanced team support rollout included over 200 training materials to help you enhance your selling experience.
In addition to the support you can get from Alibaba, we will also assign a dedicated account manager from Exabytes to give you better insight and action plans to optimise, enhance, and boost your sales revenue in the business trade.
Supply Chain and Payment Service
Alibaba has formed many new partnerships with local institutions to improve supply chain functions. These partnerships include local banks, local logistics service providers, and other valuable business partners. They will ensure reasonable freight rates for sellers.
The main benefit of these partnerships is secure payment on Alibaba.com. It provides a wide variety of payment options that work well for every buyer and seller.
As part of these efforts, Alibaba is reinforcing its Trade Assurance program to back every transaction made through its platform, providing a risk-free buying and selling experience.
*Only available in selected markets. Speak to an Exabytes Alibaba consultant for details.
Customised Service in Key Sectors
Alibaba is currently working to expand the popularity of certain marketplaces to connect our merchants with eligible buyers. For example, it’s putting money into specialist teams to recruit customers for Italian clothing, American health items, Korean beauty products, Vietnamese food, and other categories.
More vendors should be able to find customers in their speciality as a result of these efforts and expenditures.
Cross-border Trade Support
As a key resource for cross-border trade, Alibaba.com helps businesses that want to expand into the foreign market by providing powerful exporting tools. These tools include auto-translate, auto-conversion, and local partner development, making connecting with foreign buyers and overcoming language barriers and other roadblocks extremely easy.
Moreover, Alibaba.com offers Trade Assurance to ensures every transaction that took place on the platform is completed perfectly. This provides total peace of mind to the buyers as they are entitled to a refund if the delivery they receive does not meet their expectations (in terms of quality, delivery time and other pre-determined specifics).
As a result, buyers can trust Alibaba.com knowing that they are buying from a trusted source.
COVID-19 has affected many businesses’ chances of survival or retaining their business, especially those in the business trade industry. Some businesses struggled more than others, but we can see that many that were able to onboard and leverage the support of Alibaba are working perfectly fine now.
Are you ready to take your business to the next level, despite the challenges posed by the pandemic? Talk to our team by filling in your details here. We will provide a FREE one-on-one consultation to review your business nature and recommend a better solution.
**All information extracted from Alibaba’s Business Blogs: B2B & Alibaba.com: Opportunities during COVID-19 pandemic.