Online B2B marketplaces a $200 billion opportunity by 2030, says report

Bessemer Venture Partners (BVP) has estimated the online-first and technology-enabled business-to-business (B2B) marketplaces category of startups to become a $200 billion market opportunity by 2023.

The growth is currently driven by four factors -- increased digital adoption, mature digital infrastructure, favourable regulatory policies, and a conducive cross-border environment, according to the Bengaluru-based venture capital firm.

Examples of the key drivers included e-commerce, logistics and payments systems such as Unified Payments Interface (UPI), Open Network for Digital Commerce (ONDC), Account Aggregators, and Open Credit Enablement Network (OCEN), the report said.


Other examples included regulatory frameworks around Goods and Services Tax (GST), Trade Receivables Discounting System (TReDS), and Production Linked Incentive (PLI) for manufacturing, the report added.

“Any business that functions as an agency today and is serving other businesses is an opportunity to create an internet- and online-led B2B marketplace and services,” Anant Vidur Puri, partner, BVP told ET in an interaction.

While the B2B portion of the economy is estimated at $2.5 trillion in 2023, the report shows that the penetration of e-commerce in this segment is just 1%, far behind the United States, which is at 18%, United Kingdom at 20% and China at 25%.

Further, BVP identified three kinds of opportunities emerging in the B2B marketplaces domain – product marketplaces, service marketplaces, and marketplace infrastructure startups.

On the products side, solutions comprise full-stack online marketplaces that connect buyers and sellers of physical goods while also providing relevant services such as assortment, quality assurance and logistics. Examples here included Fashinza, Moglix, Zetwerk, DeHaat, Infra.market and PharmEasy.

The services marketplaces connect businesses with service providers such as freelancers, consultants and agencies, and operate in verticals like marketing and sales, information technology, recruitment and human resources, industrial, among others. Examples here included PepperContent, One Impression and Expertrons.

Marketplace infrastructure are technology platforms and tools in payments, logistics, warehousing, among other areas. that enable companies to build, assist and operate B2B marketplaces. Examples here included Rupifi, Freight Tiger, ElasticRun and Shiprocket.

In five hypotheses that will aid the sector to scale into the future, BVP said a verticalised approach allows deeper supply building, with examples across fashion jewellery and seafood verticals.

BVP added that a software layer enables seamless experiences, standardised workflows, and improves stickiness in B2B marketplaces and also that addressing financing needs of unorganised suppliers helps with the scalability too.

“We expect 15 million MSMEs are set to grow their businesses online by 2027. We saw other industry reports on this… it's super early in 2023 now. We are in the 2012 or 2014 moment of B2C marketplaces. We're starting to see one or two players emerge as very large,” Puri added.

Among other hypotheses, BVP added that a full-stack, supply-first, transactional model allows better margins, retention, and transaction experience, driven by an end-to-end control over the supply chain.