B2B e-Commerce boosting the manufacturing, distribution value chain

As increasing demand for groceries and essential goods continues to push manufacturers to double up capacity, B2B e-Commerce platforms are increasingly becoming a strategic force to be reckoned with in the manufacturing, distribution and retail value chain in Nigeria.

This is more so, because the global economy is still smarting from the impact of COVID-19 pandemic, which halted productive activities and left huge supply shortfalls. Also, there is pressure on manufacturers and top-tier distributors to get goods and services across faster to the consumers. In a country as vast as Nigeria with a large spread of consumers, B2B platforms are strategically positioned to bridge the gaps in the distribution value chain by COVID-19.

B2B platforms offer manufacturers and producers a more agile fleet that takes products to the consumers faster and in a more cost-efficient and convenient way, a value that distinguishes them from B2C platforms.

For instance, Alerzo, a major market player in the B2B market, acts as enablers of manufacturers, distributors and retailers by transporting goods ordered from manufacturers or distributors’ warehouses to the target retailers at no cost to either the manufacturers/distributors or retailers. A typical example is Alerzo’s free delivery service to informal traders. This way, B2B e-Commerce platforms empower businesses to reduce their cost and increase profitability, thereby making businesses more sustainable.

Nigeria’s informal retail market is one big chunk of the distribution value chain. It is estimated to be worth $100 billion, but the segment is faced with some peculiar challenges –limited inventory, lack of access to finance for expansion, unregulated and clustered market, distance to market or supply source and high transportation cost, all of which increase cost of operations.

In response to the challenges, B2B e-Commerce platforms including Alerzo (AlerzoShop), TradeDepot, Omnibiz and Njalo, to mention a few, are empowering informal retailers in the sub-urban and rural areas with faster distribution of consumer goods using first-party relationship platforms.

The platforms allow manufacturers and top-tier primary suppliers to clear their inventory faster, while the B2B operators deal with the last-mile supply and delivery to the retailers. Most of the players in the B2B e-Commerce segment through their digital platforms connect retailers to local and multinational manufacturers and distributors of consumer brands. Through its ecosystem of digital products, Alerzo, for example, has been empowering informal retailers to access a wide assortment of consumer products – with ease and speed – from FMCG companies such as Unilever, Nestlé, Procter & Gamble, PZ Cussons and Dangote at zero delivery cost to the retailers.

Another way B2B platforms benefit manufacturers and tier one distributors is data gathering and market intelligence on vital information such as consumer behaviour and preferences. They analyse data and share market insights with the manufacturers to further help them in research and product development, while distributors also use such information to scale up operational efficiency.

Their ability to improve sales and assist manufacturers, distributors and retailers to plan and ensure predictable outcomes, also underscores the strategic importance of B2B operators.

While predicting six trends to watch out for in the B2B e-Commerce market segment in Nigeria, in 2022, tech enthusiasts tipped increasing adoption of B2B e-Commerce as one of the evolving business models for the year and opined that more retailers would be brought onboard the e-Commerce ecosystem through B2B platforms.

It was also predicted that the segment would open up to retailers in the non-consumables category to accommodate more high-earned product retailers, while the B2B e-Commerce segment would go bullish with the launch of fintech products.

Equally, B2B e-Commerce is expected to grow bigger in Nigeria as B2B shopping brands would expand their reach and services to more cities across Nigeria. The implication is that more opportunities are created for manufacturers to increase their market spread, while at the same time top tier distributors are also increasing their distribution network. Further, more retailers are empowered to access products faster, and ultimately, the consumers are able to make purchases without having to travel miles to get whatever they want.

Indeed, the B2B e-Commerce platforms are a good complement to the manufacturers, distributors, retailers and the entire value chain including the consumers, who use the products