Bessemer sees $200 bn market in online B2B marketplaces in India

New Delhi: India’s online B2B marketplaces could grow to become a $200 billion market opportunity by 2030, venture capital and private equity firm Bessemer Venture Partners said in a report released Tuesday.

“As India’s $3.75 trillion economy grows to $6 trillion within the next decade, we anticipate a significant portion of this growth will be driven by the digital economy, which we estimate will grow from its current $100 billion to $1 trillion. While most of the first $100 billion of India’s digital economy has come from consumer digitization, we believe a large portion of the digital economy’s next 10X will come from business digitization and online transactions, or what we broadly call business-to-business (B2B) online marketplaces,” it said in its report.

In 2022, B2B e-commerce accounted for an estimated 1% of the overall B2B market in India. However, the report projects its share to rise to just under 5% of the overall market by 2030. “By 2030, we anticipate that online-first, tech enabled B2B marketplaces will represent a remarkable $200 billion market opportunity,” Bessemer Venture Partners said in its report.

The report identifies product marketplaces, service marketplaces, and marketplace infrastructure startups as the three emerging categories within online B2B marketplaces.

Rising internet reach, growth of digital infrastructure, favourable regulatory policies and a conducive cross-border environment are likely to aid the growth in India’s B2B online marketplaces.

“Key contributors for the growth will include instant payments through a Unified Payments Interface (UPI), the formalization of businesses through Goods and Services Tax (GST), increased manufacturing activities through Production Linked Incentive (PLI) schemes, and the global de-risking of supply chains with companies adopting a China +1 strategy,” it said.

India’s e-B2B market is still in its early days, said Anant Vidur Puri, partner, Bessemer Venture Partners.

“B2B marketplace startups have the opportunity to emulate in the next 5-10 years the same growth trajectory that B2C internet companies saw in the last decade. To fully leverage this opportunity B2B marketplaces must play a larger role than traditional distributors and focus on providing end-to-end management of transactions, with a deep technology and software layer while ensuring strong control over supply, quality, and service levels,” Puri said.