What is B2B in foreign trade?

What is B2B B2B (Business To Business, the pronunciation of 2 in English is the same as to.) It is the exchange of products, services and information between businesses and enterprises through the Internet. At present, the development of Internet-based B2B is very rapid, according to the latest statistics, at the beginning of this year on the Internet B2B transactions have far exceeded the B2C transactions, in the next five years, B2B will reach an average annual growth rate of 41%, to 2004, the global scope of the B2B transactions are expected to reach 7.29 trillion U.S. dollars.

The significance of B2B Traditional business-to-business transactions tend to consume a great deal of a company's resources and time, both in terms of sales and distribution as well as in terms of purchasing, which takes up product costs. Through the B2B trading method buyers and sellers are able to complete the entire business process online, from the establishment of the initial impression, to the comparison of goods, to bargaining, signing and delivery, and finally to customer service.B2B makes the transaction between the enterprise to reduce a lot of transactional workflow and management costs, reducing the cost of business operations. The convenience of the network and the extension of the nature of the enterprise to expand the scope of activities, enterprise development across regions and borders more convenient and cheaper.

B2B is not just about creating an online community of buyers and sellers, it also provides the basis for strategic cooperation between enterprises. Any company, no matter how strong its technical strength or how good its business strategy, to realize B2B alone is completely impossible. The era of fighting alone has passed, the establishment of cooperative alliances between enterprises has gradually become the development trend. The network makes the information pass unimpeded, between enterprises can be established through the network in the market, the product or operation of complementary and mutually beneficial cooperation, the formation of horizontal or vertical form of business integration, to a larger scale, stronger strength, more economical operation to really achieve the mode of global operations management.

The two modes of B2B 1. Manufacturing-oriented or business-oriented vertical B2B. Vertical B2B can be divided into two directions, namely, upstream and downstream. Manufacturers or commercial retailers can form supply relationships with upstream suppliers, for example, Dell Computer Corporation cooperates with upstream chip and motherboard manufacturers in this way. Manufacturers can form sales relationships with downstream distributors, as in the case of Cisco's dealings with its distributors. Vertical B2B generally requires only an understanding of the upstream and downstream of an industry to enter. Vertical B2B cost is relatively much lower, because vertical B2B face mostly practitioners in a particular industry, so their customers are relatively concentrated and limited.

2. B2B oriented intermediate trading market, this transaction mode is horizontal B2B, it is the various industries in the similar transaction process centralized to a place, for the enterprise's purchaser and supplier to provide a trading opportunity, such as Alibaba, Made in China, Global Sources and so on.

The current status of B2B B2B e-commerce is not only changing Wall Street, but also changing the way the entire world economy operates. Currently, there are twenty-five industries involved in the application of B2B for production and operation, such as the computer electronics industry, e-commerce solutions industry, financial industry, telecommunications industry, etc. According to Forrester Research, B2B is the most common form of e-commerce in the world. According to Forrester Research, by 2003, the B2B business of computer electronics industry will account for 30% of the B2B transaction volume. And including IBM and Nortel Networks and other eight companies have opened E2open.com Web site, so that computers, electronics and telecommunications companies can communicate with each other; Cisco and Dell is also to seize the first opportunity, Cisco more than 70% of the order is through the network, Dell is through the network every day to sell as much as 14 million U.S. dollars more than the equipment.

Observation of the trend of B2B indicators over the year, in addition to April 10, 2000 to July 31, 2000 stage of the rise is lower than the Nasdaq Composite Index, in all other periods of the trend is stronger than the Composite Index. In the year from mid-1999 to July 2000, the B2B indicator rose 71.9%, 31.7 percentage points higher than the Composite Index, and in the Nasdaq crash from March 10 to April 14, the B2B indicator fell 21.7%, 12 percentage points lower than the Composite Index, in which shares of large corporations adopting the B2B model declined by a much smaller margin, while those of the shares of Web sites that provide platforms for B2B transactions fell by a larger margin, while the shares of those that provide platforms for B2B transaction The shares of those websites providing platforms for B2B transactions fell by about 70%, indicating that the reason for the market sell-off lies in the concern over the future profitability of the websites as well as the lack of cash flow, rather than the market's rejection of the B2B concept. In the subsequent market adjustment and rebound, most of the website companies rose more than the large enterprise companies and the general index, of which Ariba rose as much as 86.25%, because the market for B2B category of the future profitability of the company's optimistic outlook, reflecting the market for the B2C and B2B two types of companies with very different attitudes.

Currently, 71 percent of U.S. businesses are ready to tap into the online marketplace, and e-commerce is expected to reach $2.7 billion in 2004, accounting for 53 percent of online trade. Competition is now reaching a fever pitch in the U.S., with online traders taking various forms of consolidation, expanding product offerings, and partnering with traditional sellers to expand their existence. However, the U.S. market research firm AMR expects the number of various online trading sites in the U.S. to decrease sharply from more than 600 now to less than 100 next year. AMR expects that due to fierce competition, only two to three B2B business sites in each industry will survive, and 90% of online trading sites are now facing the fate of closure.

The transition of commerce sites from B2C to B2B is a global trend due to the market's perception that B2B has a more realistic prospect of profitability than the B2C model. The reason for this phenomenon is that the process of building brand and consumer loyalty for B2C companies is arduous and expensive, and many companies don't reach the scale required, making B2C a risky investment. While they can be very profitable if they succeed, only 5 or 10 percent of such companies do. As the Internet has seen a decline and the startup funds for B2C companies have dried up, the capital markets have begun to marginalize these companies, making their survival even more difficult. B2B business website with customer loyalty are generally higher than the B2C website, and because of its services for the object of the enterprise, so that the circulation process to collect fees become more likely to have a more stable source of income, so we believe that the B2B business model will be in the near future on behalf of the development of e-commerce in a period of time the key points and the direction of the direction.