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UK B2B E-Commerce market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the B2B E-Commerce market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this Report

E-commerce covers the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet.

EDI is a document standard which, when implemented, acts as common interface between two or more computer applications in terms of understanding the document transmitted. It is commonly used by large companies for e-commerce purposes, such as sending orders to warehouses or tracking their order. It is more than mere e-mail; for instance, organisations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards. In 1996, the National Institute of Standards and Technology defined electronic data interchange as ""the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media."" It distinguishes mere electronic communication or data exchange, specifying that ""in EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing.

Before using EDI, trading partners must set up a trade agreement to define the parameters of EDI. Each partner in an EDI trade agreement must independently determine a method to translate internal data to and from EDI formatted messages. Each must agree on the communications media and arrange the method for transmitting information. This may involve several methods, such as a dedicated communications link, a virtual area network (VAN) or the internet. Each must provide for system recovery in case of failure or error, security and timely response.

There are several advantages to using EDI:

  • EDI speeds the process and improves the accuracy of getting information into the user's computer system. The traditional connections between businesses are telephone and mail. Both can be slow and require human intervention. EDI uses direct links to the computer system to minimize the transmission delay.
  • Direct links also eliminate the need for transcribing data into the computer. This reduces errors and saves time.
  • EDI solves business problems, offers cost savings, and strategic benefits, and provides a competitive edge.
  • EDI helps organisations improve communications and increase competitiveness, efficiency, and customer service by cutting costs and maximizing productivity and profitability.
  • EDI can lower costs by reducing inventory investments by timelier ordering. EDI can enable better business practices, such as ""just in time"" stocking. If point of sale data is sent directly to vendors, inventories can be monitored and orders automatically generated to minimize overstocking.
  • Omni-channel marketing is a multi-channel approach to sales which seeks to provide the customer with a seamless shopping experience, whether the customer is shopping online from a desktop or mobile device, by telephone, or in person at a store.

    Market Segmentation

    • Manufacturing
    • Utilities
    • Construction
    • Wholesale
    • Retail
    • Transport
    • Accomodation
    • Information
    • Other Services

    What you need to know

    E-commerce has penetrated virtually every sector of business and commerce, but the level of that penetration remains low in many cases and huge opportunities still exist for growth. The two very distinct areas of e-commerce are showing very different features and opportunities. Electronic data interchange (EDI) is largely restricted to areas where frequent deliveries within a wider order are placed. It is a strongly established sector in manufacturing and the wholesale industry. Yet it remains the province of a limited number of companies, with only 1.3% estimated to receive orders through EDI in the UK. Nonetheless, EDI accounts for more than half of the total e-commerce market, and is even more significant in the B2B market.

    The more dynamic element of the market concerns website sales, where the B2C market is demonstrating strong growth and the B2B market remains under-developed. Only an estimated 9.1% of companies are gaining UK orders from websites, though this rises to 19.6% if micro companies (those employing up to ten people) are excluded. SMEs continue to under-utilise e-commerce, yet cloud computing is offering data mining capabilities to all companies, while software-as-a-service can cost-effectively replicate many of the features offered by industry giants, such as Amazon and Alibaba. It remains the case, that the larger the company, the more likely it is to gain sales through ecommerce. The proportion of companies making e-commerce sales is far lower than those purchasing through e-commerce. 33% of all companies make purchases through e-commerce, rising to 50.6% of companies with more than 10 employees.

    Expert analysis from a specialist in the field

    Written by Terry Leggett, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

    Statistics demonstrate that the larger the company, the more likely it is to use e-commerce as a route to market. Yet cloud computing and software-as-a-service are making important facilities increasingly cost-effective for SMEs. Companies of all sizes remain three times more likely to use e-commerce as a purchasing route than a sales channel. Terry Leggett
    Senior B2B Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • B2B is bigger than B2C
              • Figure 1: Comparison of the B2B and B2C e-commerce markets, 2013-17
            • Virtually every sector uses e-commerce
              • Figure 2: Segmentation of e-commerce sales, by sector, 2017
            • The landscape is changing
              • Figure 3: Growth rates in e-commerce sales, by sector, 2017
            • Website growth driving the market
              • Figure 4: Growth rates in website e-commerce sales, by sector, 2017
              • Figure 5: Proportion of UK medium and large businesses making website sales by industry sector and country of destination, 2016
            • Strong potential
              • Figure 6: Segmentation of B2B forecast sales, by route to market, 2018-22
            • Companies and brands
              • E-commerce specialists move into B2B
                • What we think
                • Issues and Insights

                  • SME opportunity
                    • The facts
                      • The implications
                        • Wholesale disruption
                          • The facts
                            • The implications
                              • The Brexit impact
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • B2B is so much bigger than B2C
                                      • Companies are more likely to purchase than sell using e-commerce
                                        • Growth rates show major variation
                                        • Market Size

                                          • B2C and B2B show very different trends
                                            • Figure 7: Total e-commerce market, 2013-17
                                            • Figure 8: Comparison of the B2B and B2C e-commerce markets, 2013-17
                                        • Market Segmentation

                                          • Most industries and sectors now use e-commerce
                                            • Figure 9: Segmentation of e-commerce sales, by sector, 2017
                                        • Segmentation: Manufacturing

                                          • EDI dominates
                                            • Figure 10: Manufacturing sales through e-commerce, by route to market, 2013-17
                                          • Growing web sales to private customers
                                            • Figure 11: Segmentation of web sales in the manufacturing sector, by type of customer, 2014-16
                                          • Yet substantial opportunities exist for growth
                                            • Figure 12: Proportion of manufacturing companies involved in e-commerce, 2016
                                        • Segmentation: Utilities

                                          • A major website market
                                            • Figure 13: Utilities sales through e-commerce, by route to market, 2013-17
                                          • B2C leads the way
                                            • Figure 14: Segmentation of web sales in the utilities sector, by type of customer, 2014-16
                                        • Segmentation: Construction

                                          • A difficult market to convert
                                            • Figure 15: Construction sales through e-commerce, by route to market, 2013-17
                                          • Growing purchase activity if not sales
                                            • Figure 16: Proportion of construction companies involved in e-commerce, 2016
                                        • Segmentation: Wholesaling

                                          • Ability to reach end users transforms sector
                                            • Figure 17: Wholesaling sales through e-commerce, by route to market, 2013-17
                                          • Web sales to private customers increasingly important
                                            • Figure 18: Segmentation of web sales in the wholesaling sector, by type of customer, 2014-16
                                          • Purchasing more common than selling
                                            • Figure 19: Proportion of wholesaling companies involved in e-commerce, 2016
                                        • Segmentation: Retailing

                                          • Strong website sales development
                                            • Figure 20: Retailing sales through e-commerce, by route to market, 2013-17
                                          • Less than a third of retailers use e-commerce
                                            • Figure 21: Proportion of retailing companies involved in e-commerce, 2016
                                        • Segmentation: Transport

                                          • Bigger than retail
                                            • Figure 22: Transport sales through e-commerce, by route to market, 2013-17
                                          • Website sales growing in B2B
                                            • Figure 23: Segmentation of web sales in the transport sector, by type of customer, 2014-16
                                        • Segmentation: Accommodation and Food Services

                                          • Strong growth in website sales
                                            • Figure 24: Accommodation and food service sales through e-commerce, by route to market, 2013-17
                                          • B2B website sales growing
                                            • Figure 25: Segmentation of web sales in the accommodation and food sector, by type of customer, 2014-16
                                          • Bookings more important than sales
                                            • Figure 26: Proportion of accommodation and food service companies involved in e-commerce, 2016
                                        • Segmentation: Information and Communications

                                          • An early adopter
                                            • Figure 27: Information and communications sales through e-commerce, by route to market, 2013-17
                                          • Strong B2B website sales growth
                                            • Figure 28: Segmentation of web sales in the information and communication sector, by type of customer, 2014-16
                                          • Buying more common than selling
                                            • Figure 29: Proportion of information and communication companies involved in e-commerce, 2016
                                        • Segmentation: Other Services

                                          • Growth in both EDI and website sales
                                            • Figure 30: Other service sales through e-commerce, by route to market, 2013-17
                                          • B2C leads website sales
                                            • Figure 31: Segmentation of web sales in the other services sector, by type of customer, 2014-16
                                          • Major potential still exists
                                            • Figure 32: Proportion of other services companies involved in e-commerce, 2016
                                        • Market Forecast

                                          • Strong growth
                                            • Figure 33: Forecast total e-commerce market, 2018-22
                                          • B2C and B2B to grow
                                            • Figure 34: Forecast comparison of B2C and B2B e-commerce market, 2018-22
                                          • Market segmentation
                                            • Figure 35: Segmentation of B2B forecast sales, by route to market, 2018-22
                                        • The Impact of the Economy

                                          • Broad e-commerce market impacted by the economy
                                            • Figure 36: UK GDP quarterly development, by sector, 2004-18
                                            • Figure 37: Forecast GDP development, 2017-22
                                        • Market Trends

                                          • Changing landscape
                                            • Figure 38: Growth rates in e-commerce sales, by sector, 2017
                                            • Figure 39: Growth rates in website e-commerce sales, by sector, 2017
                                          • Use of e-commerce still low
                                            • Figure 40: Proportion of UK medium and large businesses making website sales by industry sector and country of destination, 2016
                                            • Figure 41: Proportion of UK all businesses making website sales by industry sector and country of destination, 2016
                                            • Figure 42: Proportion of UK medium and large businesses making EDI sales by industry sector and country of destination, 2016
                                        • Market Drivers

                                          • Internet access and usage
                                            • Figure 43: Worldwide Internet usage, by region 2010-17 (Millions and %)
                                            • Figure 44: Proportion of businesses with Internet access in the UK, by size of company, 2012-16 (%)
                                          • It’s all about speed
                                            • Figure 45: Proportion of businesses with Internet access and type of connection, by number of employees, 2012-16 (%)
                                            • Figure 46: Proportion of businesses by maximum contracted internet connection speed, by number of employees, 2012-16 (%)
                                        • Companies and Brands – What You Need to Know

                                          • The big two specialists move in on B2B
                                            • Entry barriers are falling
                                            • Industry Structure

                                              • Some specialise, many don’t
                                                • A dynamic sector
                                                  • Figure 47: Development of the dedicated retail sales via mail order or internet, 2013-17
                                                • So much room for growth
                                                  • Figure 48: Proportion of companies making e-commerce sales, by channel, 2009-16
                                                • SMEs have further opportunities to build website sales
                                                  • Figure 49: Proportion of companies making website sales by size of company, 2016
                                                • EDI is strongly biased towards larger companies
                                                  • Figure 50: Proportion of companies making EDI sales by size of company, 2016
                                                • Major mismatch between buyers and sellers
                                                  • Figure 51: Comparison of companies active in e-commerce selling and purchasing, by size of company, 2016
                                              • Competitive Strategies

                                                • You don’t need a website
                                                  • Whales or shrimps?
                                                    • Omni channel or multi-channel?
                                                    • Company Profiles

                                                      • The global e-commerce giants
                                                        • Many other backgrounds
                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                            • Abbreviations
                                                              • Methodology