Dubai is a city that has, for centuries, operated as a keystone of B2B trade across the Middle East, North Africa and Asia (MENA) region.
While its rich commerce history has fostered an ecosystem of reliable buyer-supplier relationships, legacy trading tools are no longer fit for the modern economy, and the city is now focused on its future.
Modernizing B2B trade has opened up new opportunities for DAFZA (the Dubai government), which has invested in B2B eCommerce platform Tradeling to lead the city’s path forward as it diversifies its bets beyond just oil. Yet for Dubai to become the modern trading hub it pursues, the success of Tradeling will hinge on its ability to preserve those longstanding B2B relationships while also migrating trade online.
It’s a delicate balance, said Muhammad Chbib, CEO of Tradeling, and the pressure’s on to prove the government made a smart investment choice.
“This investment happens to be by the government,” Chbib told Karen Webster in an interview. “They could have taken these millions of dollars and plugged them into an orphanage in Africa. I need to create more value than the good they would have done doing that. I need to add value that augments the economy to the digital space in this country, as well as in the region, and it needs to beat an investment in an orphanage in Africa. That’s how I think about it.”
While preserving Dubai’s rich history as a global trading hub and maintaining existing B2B relationship, remain key strategies of Tradeling, any successful B2B eCommerce strategy must embrace flexibility. According to Chbib, suppliers are shifting their mindset about digital sales tools, buyers are embracing a different way of navigating their third-party supply chain service providers, and the B2B eCommerce landscape as a whole is prioritizing a new paradigm that adds value through efficiency and consolidation.
As fate would have it, Tradeling launched onto the market within the food and beverage industry — a sector that essentially shut down in the wake of the pandemic only weeks later. Its second vertical, office supplies, similarly followed suit amid social distancing orders. It was a crash-course in the importance of eCommerce platforms remaining agile and diversifying product offerings, with Tradeling swiftly introducing offerings like care baskets that corporates could purchase for their team members.
For eCommerce portals and vendors using these platforms alike, product diversification can be vital to survival amid tumultuous times. Tradeling soon expanded into the health and wellness space, which became an unsurprising driver of growth as businesses flocked to procure sanitation products.
It’s taken a bit of time for vendors, used to legacy sales strategies, themselves to jump on board to the digital realm. But the pandemic has accelerated that shift.
“All of these suppliers had sales that basically went down to almost zero,” recalled Chbib. “All these suppliers were suffering. They had stock and no customers, so they were open to change.”
Digital commerce solutions open up sales avenues that would not have otherwise been explored for vendors desperate for revenues to recover. As such, focusing on vendor onboarding has been the focus for Tradeling, although that focus is quickly expanding to the buyer and opportunities to add value for these customers.
As more vendors embraced a digital platform to sell their goods, this supplier diversification also worked in corporate buyers’ favor, with businesses now seeking more competitive pricing amid tighter budgetary constraints.
There are other ways to add value, said Chbib, and they all have to do with removing any excess steps from organizations’ legacy supply chain processes.
“The marketplace will ultimately remove the inefficiency in an industry,” he said. “Industry inefficiency usually comes from different layers of trade that happen, but don’t add value.”
He pointed to the example of a manufacturer that sells to a distributor that sells to another distributor, and so on. Removing extra steps in the distribution process can connect buyers directly to a main distributor or manufacturer, which then opens up another opportunity for more efficient access to credit for business customers. That’s because distributors provide warehousing services as well as payment terms for buyers, and by cutting out distribution middlemen, B2B eCommerce portals like Tradeling also have the chance to integrate access to credit or payment terms management.
That effort to add value also drove the portal to support commercial card transactions and a range of payment choice for businesses, including escrow services for buyers and sellers that haven’t yet established a trusting trade relationship.
Chbib noted that one of the biggest demands among corporate buyers has been in invoicing and procurement consolidation, too. Organizations want to unify their usual monthly purchases across vendors and product categories into a single order and invoice for efficient reconciliation — a feat not possible when buyers and sellers rely on offline, legacy trade strategies.
Preserving B2B Ties
Added features can drive value for both buyer and supplier, but at the heart of these solutions is a need to maintain buyer and supplier partnerships. A third party that manages payment terms, trade credit and other burdensome workflows in the B2B trade process means buyers and suppliers can focus on working with each other to recoup business lost amid the pandemic — ultimately helping the broader economic recovery effort, too.
Looking ahead, Chbib said facilitating these B2B connections will be the priority going into the end of 2020 and into next year. Driving those ties is value-added features and service flexibility that supports seamless access to more affordable prices for buyers and higher sales volumes for vendors.
“The smartest thing that you can do is take existing business and existing relationships between a buyer and seller, and augment it to the online space without changing anything in the process,” he said. “That’s the smartest thing you can do because then you remove the barrier for conversation.”
Selected by Fintech Tube