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Business to business   Digital marketplaces are segmented

Online B2B buyers significantly influenced by business' location

Digital marketplacesProfessor Gianvito Lanzolla and Dr Hans Frankort, examined a large online B2B marketplace to identify the key factors which influence a buyers' decision to make a purchase.

They analysed the activities of companies across a multitude of industries that were registered to an online marketplace during a 21-month period.

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The study found that while digital transformation could provide companies with more possibilities for connecting with buyers, this was not completely true in terms of business realities.

In fact, rather than providing a more level playing field, digital marketplaces were more segmented than traditional ones.

While digital marketplaces are often seen as meritocratic platforms in B2B markets, the research shows that in reality, they are 'winner-takes-all', with only a small percentage of online companies receiving the majority of buyers' attention.

This is good news for online businesses with established geographical locations synonymous with a particular industry.

For example, technology businesses with headquarters in Silicon Valley and in Bangalore or for financial services with addresses in the City of London.

The data shows that a buyer's perception of where a company or seller stands in the marketplace's hierarchy will impact the likelihood of them contacting that company or seller.

Specifically, the higher a company or seller is perceived to be in the hierarchy, the greater chance of contact from buyers who have a much lower position in the same hierarchy.




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