Exploring the World of B2B Fashion Ecommerce: Top B2B Marketplaces and Supply Chain Solutions
Fashion retailers, whether they operate exclusively online, in physical stores, or through a combination of both, all share a common need: a reliable supplier who can provide them with merchandise to meet their customers’ demands. This is where the Business-to-Business (B2B) business model comes into play, facilitating the exchange of goods and services between two business entities. In the apparel retail sector, B2B fashion commerce is of paramount significance, enabling seamless product transactions between companies.
Given its pivotal role, the B2B model has not only gained widespread popularity within the fashion industry but also across various other sectors, experiencing substantial growth in global importance. For instance, according to research conducted by Statista, the European B2B eCommerce market is projected to exceed 1.8 trillion USD in the coming three years. Additionally, a Statista report highlights the significant growth of US B2B eCommerce sales, surging from 2019 and reaching nearly 11,000 billion USD in 2021.
In this report we will uncover the promising growth trajectories, explore pivotal regions, and analyze emerging trends that are shaping the future of B2B e-commerce in the fashion industry. It is a realm characterized by relentless innovation, fierce competition, and the increasing convergence of technology with traditional business practices.
Market Size and Key Regions
North America – The United States remains an influential player, and its decisions carry considerable weight in shaping the trajectory of Fashion Business-to-Business (B2B) E-commerce. The North American market is anticipated to experience significant expansion during the forecast period. This growth is underpinned by the widespread embrace of advanced technology and the presence of industry giants, creating an environment ripe for opportunities.
Europe – The European market also takes center stage, boasting an impressive Compound Annual Growth Rate (CAGR) from 2022 to 2030. Europe’s role in this sector is expected to be instrumental in the global landscape.
The Fashion Business-to-Business (B2B) E-commerce market is on a trajectory to reach a multimillion-dollar valuation by 2030, demonstrating an unexpected CAGR in comparison to 2022. Despite the competitive landscape, global recovery trends instill confidence among investors, attracting fresh investments into this thriving sector.
Leading Regions of B2B E-commerce Marketplaces
- North America – This region encompasses the United States, Canada, and Mexico, and its influence remains pivotal
- Europe – Europe boasts significant contributions to the market, including major players like Germany, the UK, France, Italy, Russia, and Turkey, among others
- Asia-Pacific – The Asia-Pacific region, with countries like China, Japan, Korea, India, Australia, and others, is a hub of activity in the B2B E-commerce landscape
- South America – South America, represented by countries like Brazil, Argentina, and Colombia, also plays a vital role in the market’s dynamics
- Middle East and Africa – This region, with countries like Saudi Arabia, UAE, Egypt, Nigeria, and South Africa, contributes significantly to the global B2B E-commerce landscape
Trends in B2B E-commerce
- Specialized Marketplaces – The B2B E-commerce arena is witnessing a surge in specialized vertical marketplaces. These platforms are designed to offer a comprehensive array of products within specific categories, coupled with specialized value-added services. This trend caters to the increasing demand for niche solutions.
- Business-to-Everyone (B2E) – The concept of B2E is gaining rapid traction, expanding the scope of B2B E-commerce. This trend reflects a broader approach in connecting businesses to a more extensive and diverse clientele.
- Big Data Personalization – Leveraging big data to provide personalized customer experiences is a significant trend. Companies are investing in data-driven strategies to enhance customer satisfaction and engagement.
- Mobile Shops – The popularity of mobile shopping in B2B E-commerce is on the rise. As legacy platforms face limitations in accommodating this trend, mobile shops provide more flexibility and accessibility to B2B customers.
- Cloud Platforms – Cloud-based solutions are gaining prominence due to the limitations posed by legacy systems. They offer scalability, flexibility, and efficiency in B2B E-commerce operations.
- Omnichannel Integration – Businesses in the B2B E-commerce sector are actively integrating their systems and platforms to establish an omnichannel relationship with their customers. This approach enhances customer engagement and streamlines business operations.
Challenges and Barriers to Growth in B2B Marketplace
While the B2B E-commerce sector shows great promise, it faces various challenges.
- Quality Customer Data – The scarcity of quality customer data, resulting from a smaller customer base and highly specialized services, poses challenges in personalization efforts. Obtaining comprehensive and accurate data is vital for tailoring experiences.
- Supply Chain Complexities – The sector experiences complexities related to larger order quantities, variable pricing, a diverse product range, and tight delivery deadlines. These factors strain existing supply chains and necessitate innovative solutions.
- Legacy Platforms – Many companies opt to extend their Enterprise Resource Planning (ERP) solutions for e-business. However, this often places stress on legacy platforms that were not designed for modern, agile B2B E-commerce operations. To thrive in the evolving market, businesses need flexible and interoperable eCommerce architecture. This adaptability is essential to meet the demands of a dynamic business landscape.
Faire, Ankorstore, and Orderchamp
Wholesale platforms have emerged as critical intermediaries bridging the gap between fashion brands and retailers. Their role facilitates an easier path for brands to identify target markets and enriches retailers’ inventory with a diverse range of high-quality products. In today’s tech-driven landscape, the shift from physical warehouses to a robust online presence via websites and social media has expanded opportunities for growth and innovation. The online B2B wholesale industry is a vital force propelling global business development.
Given the nature of wholesale operations, involving large quantities and long-term agreements, these companies typically exhibit higher average order values (AOV) and order volumes. The long-term nature of wholesale transactions also translates into higher customer lifetime value. Wholesalers need to prioritize key factors such as conversion rates, outsourcing, shipping costs, product pricing, and social media engagement, among others.
In a market filled with numerous B2B wholesalers, some established names, like Walmart, Sears, and Kmart, have forged partnerships with renowned brands. Simultaneously, emerging players are dedicated to supporting small businesses and brands, boosting visibility, and fostering substantial business growth. Among these are three prominent B2B wholesalers: Faire, Ankorstore, and Orderchamp. These wholesalers have made their mark by delivering essential services tailored to the needs of both retailers and brands.
Faire, as a leading platform for wholesalers and retailers in North America, offers a vast and diverse catalog of brands to retailers aiming to provide distinctive shopping experiences to their customers. Since its launch in 2017, Faire has raised 1.8 billion U.S. dollars. Headquartered in San Francisco, the startup serves as an online wholesale platform for more than 85,000 retail brands worldwide. The platform’s commitment to empowering retailers and brands has been evident in its remarkable growth, even in the face of challenging times.
Ankorstore’s marketplace offers an extensive catalog of over 20,000 European brands to retailers looking to provide unique shopping experiences to their customers. Despite challenges during lockdowns, Ankorstore’s activity in Europe tripled within the first four months of 2021. Ankorstore is not just an online marketplace; it’s a comprehensive business ecosystem that brings together retailers, brands, financial tools, logistics, management, and customer relationship management tools.
Orderchamp is a digital purchasing platform connecting brands and retailers across Europe. It has already engaged with 100,000 independent retailers, aiding them in discovering new bestsellers and assisting brands in expanding across borders. Using curation, technology, data, and machine learning, Orderchamp provides efficient solutions to offer the best purchasing platform. The values cherished by Orderchamp in brands include a commitment to social good, eco-friendliness, handmade products, organic offerings, and support for local businesses.
Pros and Cons in B2B ecommerce marketplaces
When evaluating wholesale platforms like Faire, Ankorstore, and Orderchamp, it’s essential to conduct a comprehensive assessment of their strengths and weaknesses, including considerations of charges and fees. These platforms cater to different markets and provide various services, making it crucial to understand their offerings. Below is a more detailed comparison of the pros and cons for each platform.
- Market Base – Faire is headquartered in California, USA. This location provides businesses with convenient access to the North American market, making it an attractive choice for those looking to expand in this region.
- Total Revenue – Faire boasts a substantial total revenue of $1.692 billion, indicating robust financial backing and support from investors. This financial strength can be reassuring for businesses using the platform.
- Investor Count – Faire benefits from a diverse network of 14 investors, showcasing the platform’s credibility and attractiveness to investors.
- Funding Stage – Faire is at Series G – III, which suggests a mature and well-established presence in the wholesale industry. Businesses can trust the platform’s experience and longevity.
- Buy Now, Pay Later – Faire offers a 60-day buy now, pay later option, which can be advantageous for businesses looking to manage their cash flow more effectively. It provides flexibility in payment terms.
- Market Base – While Faire excels in the North American market, it may not be as well-positioned for global expansion. Its primary focus on one region can limit its reach to other parts of the world.
- Valuation – Faire’s high valuation might be seen as an advantage, but it could also make the platform seem less accessible to smaller businesses or those seeking cost-effective solutions.
- Market Base – Ankorstore primarily serves the European market. This regional focus provides businesses with access to a diverse and expansive market, which is particularly beneficial for those looking to establish a presence in Europe.
- Total Revenue – Ankorstore has raised a significant total revenue of $420.89 million. This financial strength demonstrates its ability to attract investments and maintain a strong position in the European wholesale market.
- Investor Count – With nine investors supporting the platform, Ankorstore has built a reliable and well-supported network. This investor confidence can instill trust in businesses using the platform.
- Funding Stage – Ankorstore is at Series C, indicating a well-established presence in the European wholesale market. It reflects the platform’s experience and maturity.
- Buy Now, Pay Later – Ankorstore, like Faire, offers a 60-day buy now, pay later option. This flexibility can be a valuable tool for managing finances.
- Market Base – Ankorstore’s primary focus on Europe might limit its accessibility to markets outside of the continent. Businesses seeking a broader global reach may find it somewhat constrained.
- Limited Valuation Information – The provided information lacks detailed valuation data, which can make it challenging to assess Ankorstore’s market value compared to competitors.
- Market Base – Orderchamp is dedicated to serving the European market, making it a suitable choice for businesses looking to establish a presence in this region.
- Total Revenue – While Orderchamp’s total revenue of $23.3 million is comparatively lower than the other platforms, it still reflects financial stability and growth. Smaller businesses might find it more accessible.
- Investor Count – Orderchamp has support from five investors, indicating a network of backers who believe in the platform’s potential.
- Funding Stage – Orderchamp is at Series A, suggesting its growing influence in the European wholesale market. Smaller businesses or startups might find it a promising platform.
- Buy Now, Pay Later – Orderchamp, like Faire and Ankorstore, provides a 60-day buy now, pay later option, offering businesses financial flexibility.
- Market Base – Orderchamp’s primary focus on the European market may limit its global reach. Businesses aiming for a broader international presence could encounter limitations.
- Valuation – Detailed valuation information for Orderchamp is not provided, which can make it challenging to evaluate its market worth accurately.
Faire offers a cost-efficient model for North American sellers with free registration. Sellers only pay a commission when Faire connects them with new retailers. Additionally, they can enjoy 0% commission on orders from Faire Direct customers and introduce customers with personalized links to receive this benefit. Faire Direct customers enjoy payment terms and free returns.
Ankorstore follows a contribution-based model with no fixed costs for registration. It charges a commission on the first order from Marketplace orders (24%) and an order management fee on re-orders (12%). For referral orders, brands can achieve 0% order management fee for the first 12 months and standard fees apply after. Ankorstore covers various aspects of order management, ensuring smooth transactions.
Orderchamp operates on a no-cure no-pay basis, charging an ongoing 10% commission on orders. There’s also a one-time 15% discovery fee on the first order, resulting in a total first-order commission rate of 25%. However, brands can achieve 0% commission on orders from existing retailers through their brand referral program. Retailers benefit from free shipping and flexible payment terms.
These pricing models cater to different needs and preferences in the B2B wholesale and retail industry, offering flexibility, cost-efficiency, and incentives for brands and retailers.
How is the B2B Fashion Space Developing?
B2B ecommerce has firmly established itself as a significant force. According to Digital Commerce 360, online sales on B2B ecommerce platforms, login portals, and marketplaces surged by 17.8% to reach $1.63 trillion in 2021. Statista’s data predicts that the North American B2B ecommerce market will exceed $4,600 billion by 2025.
In 2022, McKinsey & Company’s report revealed that approximately 65% of B2B companies spanning various industries have fully embraced online transactions, marking a pivotal shift. Ecommerce has taken precedence over in-person sales, driven by its revenue-generating potential. McKinsey & Company’s study shows that around 18% of B2B revenue now originates directly from ecommerce, surpassing traditional methods like phone, email, and video conferencing.
This shift aligns with data from Wonderman Thomson, which indicates that, as of 2021, 49% of B2B purchasing activities in the UK, US, and China are now conducted online. However, meeting the expectations of B2B buyers necessitates more than just a basic website; it demands an exceptional customer experience.
Surprisingly, 52% of B2B buyers express frustration with the online buying process. Moreover, a striking 90% of B2B buyers admit they would readily switch to a competitor if a supplier’s digital channel fails to meet their evolving requirements. To meet the evolving standards of today’s B2B buyers, prioritizing digital transformation in 2023 is no longer an option but a necessity.
E-Marketplace.com offers various services and expertise related to e-marketplaces, e-commerce, and multi-channel sales and marketing.
- Multi-Channel Expertise – E-Marketplace.com positions itself as a resource that specializes in developing and enhancing multi-channel presences
- Wholesalers and Retailers – E-Marketplace.com can assist wholesalers in establishing cost-effective sales channels that reach retailers in global markets
- Brands and Marketing Strategy – E-Marketplace.com offers to collaborate with brands to enhance their market reach and profitability
- Digital Transformation – E-Marketplace.com offers solutions that help businesses deploy cohesive platforms addressing cross-functional requirements
- E-Marketplace Operators – E-Marketplace.com extends its expertise to e-marketplace operators, helping them remain competitive
- Comprehensive Skill Set – E-Marketplace.com offers a comprehensive skill set that includes branding, e-commerce, customer engagement, social media management, and more
- Consultation and Proposals – E-Marketplace.com mentions offering an initial consultation and providing detailed proposals free of charge
The world of B2B e-commerce, especially in the fashion industry, is on the cusp of remarkable growth and transformation. The report has provided us with insights into the market’s current dimensions and the regions that will play pivotal roles in its future. We’ve explored the emerging trends, including the rise of specialized marketplaces, the expanding reach of Business-to-Everyone (B2E) models, and the critical role of big data personalization and mobile shopping.
While the opportunities in this space are abundant, it’s crucial to acknowledge the challenges it faces. Quality customer data, supply chain complexities, and the constraints of legacy platforms all pose unique hurdles that businesses must overcome to thrive in this dynamic environment.
Furthermore, we’ve delved into the role of B2B wholesale platforms, which are connecting brands and retailers in innovative ways. Faire, Ankorstore, and Orderchamp have emerged as influential players, and we’ve outlined their pros and cons, offering a comprehensive view of the opportunities they provide to businesses.
The pricing models offered by these platforms cater to diverse needs, providing flexibility and cost-efficiency for both brands and retailers. This adaptability is essential in a B2B e-commerce world that is evolving at an unprecedented pace.
Finally, we’ve explored the overarching trend of digital transformation, a key force driving the B2B e-commerce sector. Businesses are rapidly adopting online transactions and prioritizing exceptional customer experiences to meet the evolving demands of B2B buyers.
E-Marketplace.com, with its array of services and expertise, stands as a valuable resource for businesses seeking to navigate this transformative landscape.
As we move forward, one thing is clear: B2B e-commerce in the fashion industry is poised for substantial growth, and those who adapt, innovate, and seize the opportunities will undoubtedly thrive in this dynamic digital age.