Whitepaper predicts online B2B increase of more than 70% by 2027 to US$20.9 trillion from US$12.2 trillion in 2019
Covid-19 pandemic drives digital transformation and significantly accelerates B2C and B2B e-commerce growth
DHL Express closed 2020 with best result in its history with EBIT of EUR2.7 billion, up 34.9% year-on-year
B2B companies have started to recognize that online selling platforms are crucial to business success
Business-to-business (B2B) sales interactions will be the next growth area for e-commerce, with 80% of transactions between suppliers and professional buyers taking place in digital channels by 2025, DHL Express predicts in a new study.
The whitepaper said drivers of this growth are the COVID -19 pandemic, which is ramping up digitalization, and a new technology-oriented generation of millennials, who are now of an age to be the professional B2B decision-makers.
The acceleration of B2B e-commerce comes on the heels of the surge over the last years of business-to-consumer (B2C) e-commerce, particularly notable during the holiday peak seasons such as Easter and Christmas and mega shopping days like Black Friday and Cyber Monday.
In fiscal year 2020, total B2C e-commerce volumes within the DHL Express division of Deutsche Post DHL group registered an increase of about 40% compared to 2019, according to the whitepaper.
This translates to total revenue of EUR19.1 billion (US$22.7) for the year, higher by 11.9% higher compared to the same period of the preceding year.
EBIT in 2020 rose to EUR2.7 billion, a 34.9% increase year-on-year and the division’s “best result in its more than 50 years history,” said the company.
“Even in times of worldwide shutdowns, globalization has shown its resilience, fuelled by digitalization and the power of global trade,” said John Pearson, CEO of DHL Express.
“These trends have led to an ever growing number of consumers to shift their shopping activities online. The pandemic has accelerated this development like never before, with a sharp rise in businesses selling their goods in the global marketplace. E-commerce and global logistics thus provided the key to unlock local shutdowns, keep economies running and mitigate the impact of Covid-19 for many of our customers.”
DHL said it is not only B2C e-commerce that has been growing due to ongoing digitalization and the changed shopping behavior of consumers. In 2019, before the pandemic, global sales on B2B e-commerce sites and marketplaces had already increased by 18.2% to reach $12.2 trillion, outpacing the market size of the B2C sector. Through Covid-19 and the resulting acceleration of digitalization, this global B2B e-commerce volume is estimated to reach US$20.9 trillion by 2027.
Michiel Greeven, executive vice president of global sales at DHL Express, said that like B2C retailers, B2B companies have also started to recognize that online selling platforms are crucial for their business success.
“As a result, there will also be an additional need for global Express shipping and DHL Express is well positioned to support all B2B companies on their journey.”
Advises Leendert van Delft, vice president of global sales programs and global e-commerce: “If B2B businesses want to make the most out of the new cross-border and E-commerce opportunities they need to start adapting to the changing buying behaviours, especially with the upcoming generation of millennial as B2B decision-makers, who are further driving the digitalisation of the sector. B2B customer experiences have to be more aligned with the digital B2C experiences.”
In 2020 DHL Express delivered 484 million shipments in total for its customers (B2C and B2B) around the globe, around 9% more per day than in 2019.
To adapt to this significant growth of its network, DHL Express said it continues to invest more than EUR1 billion annually in new state-of-the-art facilities around the world to multiply its sorting capacity, and to hire thousands of new employees yearly.
It also adds about 20 units of new freighter aircraft to its fleet each year. DHL Express recently announced the purchase of eight more Boeing B777 wide-body freighters and a partnership with Smartlynx Malta to add two Airbus A321 to its fleet.
Photo courtesy of DHL