The sharing economy, the circular economy, and the collaborative economy offer interesting prospects in B2B marketing, explains Navi Radjou in a video interview conducted at the Visionary Marketing Studio. Thanks to Navi Radjou’s tireless optimism, we now know that in our professional and personal lives, we can innovate for the greater good while contributing to a multi-trillion** US dollar Market definition in B2B and B2C - The very notion of "market" is at the heart of any marketing approach. A market can be defined....
B2B sharing economy: a multi-trillion dollar market
We urgently need Navi Radjou’s enthusiasm to face all the socioeconomic difficulties of the moment, and to continue undertaking, innovating, and thinking about the common good.
We have known Navi’s commitment to Jugaad innovation, a spirit of creative ingenuity inspired by India for quite some time. A dire need in the current economic situation where we will have to learn to do more with less.
The new adventure of the collaborative economy in B2B
In the same spirit, B2B will also embark on a new adventure, that of the sharing economy. Similar to what happened with Uber and others, but more ethically and with a much more significant and lasting impact.
Towards the end of 2021, Navi published a report on that subject alongside Think Tank Terra Nova. This shows that, in the same way, after the 2008 crisis, we witnessed the rise of the collaborative economy with Blablacar or Uber. The current crisis, will promote the emergence of a new sharing economy, but this time in B2B.
The emergence of B2B
We at visionary marketing, will never stop advocating B2B, which is, the essence of the whole economy. The same goes for the sharing economy.
According to the PwC consulting firm Navi explains, the B2C sharing economy market is estimated to be at 335,000 million dollars by 2025.
Navi Radjou’s B2B maturity model
Navi looks at three motivations for companies to develop B2B sharing:
- The first motivation is economic. With the current crisis, companies seek to pool resources to make them more profitable,
- The second motivation is social. This exchange allows companies to recruit people with difficulty to insert them into their value chain of shared resources,
- The third motivation is ecological. Sharing resources (equipment, spare parts, etc.) and reusing them, makes it possible to manufacture new ones. This is known as a circular economy.
A sharing economy that concerns all B2B actors
The industrial sector was the first to adopt the B2B exchange, but can be practised by almost all sectors and companies of all sizes.
Navi highlights, for example, the cropping up of pop-up stores whereby distributors are pulling resources together to promote their brands.
Sharing can also concern office space, 60% of which in New York for example, is empty. Service companies can monetise their empty offices by sharing them.
The B2B maturity model: six levels of excellence
Navi shares with us its maturity model, a roadmap with six levels of excellence in the field of B2B sharing:
- Sharing waste;
- The distribution of industrial assets;
- Sharing purchasing power;
- Sharing employees;
- Sharing clients
- And the exchange of intellectual property.
1st level: sharing waste
Companies can start sharing their waste in a non-competitive way. This is called a circular economy.
Navi cites an example in Denmark of a dozen co-located companies sharing their waste, resources, and energy. Thus nothing is lost, and everything is transformed.
2nd level: sharing physical assets
The second level is the exchange of unused or underexploited physical assets, which can be physical spaces, factories, vehicles, and warehouses.
In France, the platform SpaceFill allows owners of underutilized warehouses to generate new revenue by renting them to other companies and entrepreneurs in the world of e-commerce who need storage space.
3rd level: share purchasing power
The third level is the distribution or pooling of purchasing power. Again, this is already done in the distribution world, but only for cost savings.
A very inspiring example of sharing purchasing power is that of the United States: 1,400 hospitals have created a non-profit association where purchasing power is mutualised to produce their generic drugs. As a result, they have launched more than 50 generic drugs that have saved or sustained the lives of 223 million patients.
4th level: sharing of talents and skills
The fourth level is the distribution of employees. Digital platforms in the UK such as New Anglia Advanced Manufacturing and Engeneering group (NAAME) and the Cambridge Norwich Tech Corridor allow employers to temporarily loan their employees to other employers.
An industrialist facing financial difficulties can thus temporarily lend his employees to another growing company.
The Breton association Vénétis is an association of 360 small French businesses that hire experts, sharing them among its member firms, thus replacing precarious part-time jobs with secure shared-time jobs. In addition, Vénétis allows SMEs or ETIs to access, for example, advanced skills related to Artificial Intelligence or web marketing, for which they could not afford to hire someone full time.
5th level: client exchange
Level 5, the sharing of clients, is a much more complex topic.
McKinsey announces the emergence of cross-industry digital ecosystems by 2025. The boundaries between industries will blur and more and more solutions in sectors related to mobility or health will be transversal.
For this client sharing to work properly, these solutions must be implemented by actors belonging to different industries.
The revenue generated by these intersectional ecosystems is estimated at 60 billion dollars by 2025, being a third of the revenue generated by all major businesses worldwide.
For example, Orange, Kingfisher, Carrefour, Legrand, La Poste, SEB, and Pernod-Ricard, seven large companies from seven different business industries, have created InHome, a cross-industry innovation incubator run by InProcess, an innovation consultancy.
6th and last level: sharing intellectual property
Intellectual property is the ultimate level of exchange.
Danone, for example, has shared several thousand source strains of lactic ferments. Researchers and scientists worldwide can use these strains to develop solutions to combat malnutrition and increase access to healthy food, meeting the United Nations Sustainable Development Goals.
In addition, the jeans manufacturer, Levi-Strauss has developed 21 technologies to reduce water consumption by up to 96% for garment production.
After successfully using these technologies in their value chain, these companies have made them accessible to their competitors.
This exchange makes it possible to increase the environmental performance of your entire industry. It is a way of sharing an intellectual property that aims to improve the ecological performance of a whole industry.
How to develop this B2B sharing tomorrow?
The first thing that companies must do to promote B2B sharing is to identify which resources are the least profitable and the least used. These can be physical resources or intangible resources.
Next, they need to identify one or two trusted partners to start exchanging, pooling, sharing industrial assets, etc. Finally, they must learn to build trust with the partners they want to share with.
So as to test employee sharing, a Boston-based company allowed its industrial designers to go to work at another company every Friday.
This is the concept of open innovation. The employee gets new perspectives from other businesses. And when he/she returns to his company, he/she brings his unique knowledge, helping improve his/her daily work.
Download the white paper on the B2B sharing revolution
A market so big, many don’t notice it
One thing that is striking, is the sheer volume of revenue and opportunities associated with business to business. B2B makes up the most significant part of the economy, that said, why is there so little noise about it?
“The economic value of B2B transactions is 5 to 10 times higher than that of B2C activities,” explains Navi. This market amounts to trillions of dollars.
The economic value of B2B transactions is 5 to 10 times higher than that of B2C activities
According to Navi Radjou, the B2B exchange, which will develop in the next 5 to 10 years will represent a volume of 3 to 10 billion dollars.
So there is a great opportunity here. Because in terms of efficiency, if we want to optimize B2B interactions, there is still a lot to do. And this is where B2B sharing may, according to Navi, be the origin of the golden age of computing.
B2B sharing may be the origin of the golden age of computing
Finally, we will see the emergence of the marketplaces that we were talking about at the end of the 90s. B2B exchange platforms are optimised today thanks to the two great technologies: artificial intelligence and the Internet of Things (IoT), which will drive the digital interactions between B2B players.
As is often the case in innovation, the general public has its eyes glued to gadgets and is missing out on real revolutions, like this quiet revolution in the B2B sharing economy.
** important note: these are American trillions and not French trillions. Thus trillions of “the short scale” are used in popular American works. This corresponds to 1 trillion (1012 or 1,000,000,000,000) and not 1 trillion trillion (1018 or 1,000,000,000,000,000 000) for the French trillions traditionally used on the long scale) . More information.