Role of B2B portals and Indian SMEs

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Moonis Rehman | 17 Nov, 2009
B2B portals have set a new paradigm of competitiveness in the business world and it is the new age business model of the ever-changing business world. Some of the large scale suppliers and buyers are heavily betting on it.

With globalization, international trade has become increasingly popular. Along with improved foreign relations, innovative technologies, especially the internet, have drastically changed the manner in which different business operates. Communication has become a child's play and transportation easier than ever before. From bulk machinery to tiniest gadget, any imaginable product manufactured anywhere can be sent or received today most efficiently. Parallel to these advancements in technology, online marketing techniques are continuously being developed paving way for business entrepreneurs new horizons to explore.

With this boom in e-commerce and internet marketing, online Business-to-Business (B2B) portals and marketplaces are becoming much more prevalent. These B2B portals act as a bridge between buyers and sellers, importers and exporters, and offer them a common platform availing a bundle of some most useful services. No matter whether you are an exporter or importer, manufacturer or service provider, these online portals offer readymade lists of exporter and importers to help you quickly locate the exact item or company you are looking for.

Unlike in B2C (Business to Consumers) marketing, B2B operations involve exchange of products, services, or information between businesses rather than business and end users. Based on the understanding of of what business buy/sell and how they buy/sell, B2B Portals offer message boards where users can view buy & sell trade leads and post their own leads to generate maximum business inquiries. Trade leads are often preferred over conventional contact methods and they can be acquired from the the convenience of home and as per one's own schedule.

Transforming micro, small and medium enterprises (MSMEs) into world class entities is of utmost importance today.

With a total size of $ 140 billion, the sector can emerge as the driving force of the Indian economy provided it gets the right thrust from the government in key areas - technology, skills development, finance, quality management, etc.

MSMEs contribute over 45 percent of the country's industrial production and around 40 percent of the total exports. Thirteen million MSMEs in India employ over 31 million people.

The Ministry of MSME had announced the implementation of a 10-point initiative under the National Manufacturing Competitiveness Programme (NMCP) for enhancing the competitiveness of the manufacturing sector, particularly the SMEs. The timely implementation of this programme is very essential. Above that quality management support, centres for designs, securing Intellectual Property Rights (IPR) and getting quality certifications at par with those of Europe and US need to be identified and implemented under the National Manufacturing Competitiveness Programme.

Internet, Small Businesses and Role of B2B portals:

B2B portals came into existence with the country's telecom or more precisely its Internet revolution. India continues to be one of the fastest growing major telecom markets in the world. Sweeping reforms introduced by successive Indian governments over the last decade have dramatically changed the nature of telecommunications in the country.

However, as a result of globalization and liberalization, coupled with WTO regime, SMEs have been passing through a transitional period. With enhanced competition from China and a few low-cost centers of production from abroad, many units have of late been facing a tough time.

In the future, only those SMEs who had a strong technological base, international business outlook, competitive spirit and willingness to restructure themselves withstood the challenges will be successful to make their own contribution to the Indian economy.

If we look at the current scenario, SMEs in India are still in technological backwaters compared to advances in science and technology. These suffer from problems of operation know-how and technological obsolescence. They have to now work hard to get out of this impending scenario. There has to be a major change in policy on how they are operating. SMEs have to put in more effort on research and development (R&D), and on ways to use the technology that will highly benefit them - the Internet.

Internet skills can in any case best be acquired in direct response to the demands of day-to-day business practice. One needs to discover how SMEs actually learn to use the Internet, and from there to develop a set of training tools which they could use to acquire those skills.

Internet led e-commerce coupled with B2B portals can be the best things to happen for SMEs. It is seen as a great equalizer. It has potential to wipe historical weaknesses of the small enterprises.

However, these changes are not taking place in isolation for SMEs. The revolution has gripped the large corporations and the government too. For SMEs, it is not a question of choice that they should be active player in Internet led e-commerce or not. It has become a question or survival. The opportunity cost of not being an active player in e-commerce is too high for SMEs.

To survive, grow and win, SMEs will have to continuously infuse the latest tools of IT in their production processes and marketing and management functions to cut cost, gain efficiency and consistency.

Technology has changed a lot over the past decade. And yet, when we look at how small and medium-sized enterprises (SMEs) use technology, there has been only a limited adoption of the various new technologies. Even as the rate of change in technology accelerates, the pace of usage of these technologies in businesses at the bottom of the pyramid has not increased dramatically.

The Internet can help SMEs in improving the technology and the process they use. It can also help them to achieve world class quality and create a global market without having to travel. This in will help them to reduce cost of production and also to generate new opportunities.

Back to B2B portals and their role in India's business scenario, we can conclude with ease that while, the businesses, who rely on B2B portals, will be having their conventional on-field operations on, the online B2B portal is considered to be one of the crucial ways of expanding their business activities, as it aids in getting access to international base of clients.

Although B2B business models are sometimes categorized as Brokering Sites, Information Sites, Specialized Industry Portals, it seems that models for B2B business is still evolving. In these days, most of the B2B portals available on the net fall into more than one of the aforesaid categories. They also offer extensive information about Foreign Trade Policy, Union Budgets, Trade Fairs, Newsletters and Business News, etc. Along with these utilities, what is most striking about B2B portals is that they minimize the your expense advertising and marketing of your brand. For small and medium business, B2B is therefore the ultimate cost-effective way open up an entire new world of trade opportunities at the international level.