- THE MAGAZINE
With the New Year upon us, the industries’ best analysts are making their best predictions for what we can expect. Below are a handful of those predictions, mostly concerning commerce.
Global Trade and e-Commerce, from Alibaba.com and Alipay
Michael Lee, director of global marketing and business development of Alibaba.com, has thoughts on where global trade is going in 2014. His predictions include:
Businesses will recognize that e-commerce is not just about China.
When most people think of global trade, they still think “China.” But in 2014 other areas of the e-commerce world will continue to gain traction — such as Brazil and MENA (Middle East and North Africa). We’ll see more business opportunities in these areas and more studies done on how to explore those markets.
Suppliers will build their brands and go to market directly.
Traditionally Chinese suppliers made products for buyers and white-labeled them. In 2014, we’ll see these suppliers building their own brands and selling them directly to consumers. While “Made in China” has lacked prestige as a label, this will change as Chinese manufacturers pay more attention to the rising consumer purchasing power worldwide, devoting more resources to developing brands that can compete on a global stage.
Time spent on sourcing will decrease.
Sourcing is only one part of running a small business but it takes an inordinate amount of time. As more and more micro-entrepreneurs and small businesses do business globally, 2014 will bring more sourcing services that provide new (and free) tools that enable small businesses to quickly submit their requests and get a targeted list of potential suppliers within a day or two. A December promotion on AliSourcePro, a product on Alibaba.com that helps buyers do exactly that, attracted approximately 50,000 sourcing submissions from around the world in three days.
Mobile, mobile, mobile
Every online business knows they have to have a mobile element but the challenge is doing that when you’re a small business. In 2014 more creative and low-cost — or no-cost — platforms will enable small businesses to handle mobile e-commerce relatively effortlessly including browsing, payment (including cross-border), reliability, security, and more.
Jingming Li, vice president of Alibaba Group and chief architect of Alipay International, has some interesting predictions on where e-commerce and payment are headed next year.
Mobile check-out experiences will be fast, easy and secure.
It’s all about mobile. As online businesses keep up with the demand for seamless mobile purchasing experiences, e-commerce changes are in store for 2014. Black Friday and Cyber Monday shopping trends are an indication of what’s to come. In 2013 online sales on those days not only broke past records but sales made on mobile devices also shattered previous records. According to Adobe Digital Index 2013, 18.3 percent of Cyber Monday’s sales were made on mobile devices, up 80 percent year-on-year. In 2014, businesses can expect even more sales and advertisement opportunities through mobile. They should optimize consumers’ mobile check-out experiences and allow instant purchases through just a few clicks.
Cross-border e-commerce will expand beyond anything we’ve seen so far.
Technology is breaking down the barriers of global e-commerce. With the rise of new, digitally empowered consumers in BRIC countries and other emerging markets, in 2014 more U.S. businesses will seize this opportunity and enable consumers to buy directly. Companies will offer better payment mechanisms, acquire needed marketing knowledge, and work with logistics partners based on different countries’ market-entry conditions. This is no small task but businesses will recognize that the opportunity is massive and the reward could be high.
Increased Engagement, from Basware
Basware is predicting 2014 as the ‘Year of E-Engagement’ for B2B commerce, driven by explosive growth of social, mobile and cloud. This means that use of business commerce networks, e-invoicing and e-payment solutions will rapidly rise as companies seek better cash flow.
“In 2013, companies have been focused on improving their cash flow and we expect this to continue as a key focus in 2014,” said Esa Tihilä, CEO of Basware. “Effective payment strategies will stay top of mind as organizations look to maximize working capital and ensure the financial stability of their suppliers.
“Additionally, in the coming year we expect more finance and procurement departments to use B2B e-commerce to improve financial management and increase responsiveness to internal users, customers and suppliers. This will enable them to gain better insight, improved processes and increased collaboration,” Tihilä added.
Basware predicts four key trends will transform B2B commerce over the next twelve months:
1) 2014 Will Be the Year Of ‘E-Everything’ through Social, Mobile, Cloud
In today’s real-time social, mobile and cloud-based environment, business users are demanding access to information and the ability to process tasks in a matter of seconds or minutes. To meet these increasing demands, finance and procurement professionals will see rapid growth of e-invoicing, e-ordering and e-payment services. They will also expect an open, engaging digital experience and ease-of-use in their finance and procurement solutions.
Following in the footsteps of corporate buyers, suppliers are realizing how expedited invoicing can improve cash flow and allow them to benefit from real-time financial data. In 2014, we expect to see more suppliers using supplier portals as well as on-boarding services to increase the speed and accuracy of invoicing. Additionally, local governments will continue to play a pivotal role in encouraging their national governments to adopt e-invoicing.
The key to transitioning to ‘e-everything’ in 2014 and achieving financial success will be to become better connected in the business environment, just as consumers have become accustomed to in their everyday lives. One way companies will continue to increase their connectivity and collaboration is through business e-commerce networks, which will enable them to connect internal employee efforts to customers, suppliers and partners to gain market share, achieve higher margins and increase sales.
2) Savvy Buyers and Suppliers will Free Up Cash Flow
In the U.S. e-payments typically have focused on the consumer retail space, but we will see it beginning to take hold in B2B due to increased market pressure and the availability of new solutions. Currently, cash flow concerns are being fueled by large companies that are extending their payment terms with suppliers to free up cash for their organizations. With terms at these large companies now typically 60-100 days, the impact on suppliers – particularly smaller ones – can be severe, jeopardizing their financial stability as well as creating risk in the supply chain.
Over the next year we expect to see the rise of innovative e-payment solutions that will address both sides of the payment issue: speeding up slow invoice processing and invoice payment tasks to ensure that suppliers get paid quickly, while extending terms for buyers.
3) Leaders will Increase their Competitive Advantage through Analytics
Now more than ever companies require immediate access to spend and cash flow information to better manage finances in real-time. In 2014, companies will rely even more heavily on analytics, not only across their purchase-to-pay process, but also across their whole network of buyers and suppliers, to aid their decision-making.
The use of real-time analytics will help identify financial bottlenecks and opportunities for cost savings. It will enable organizations to collate information from across the network to uncover trends that help improve cash-to-cash conversion cycles and critical performance indicators, such as days’ sales outstanding and days’ payment outstanding.
4) The Year of the Accounts Payable Change Maker
In 2014 the accounts payable team, which has insight into the company’s actual spend, will further social, mobile and cloud-based e-invoicing and e-payment solutions to make information more accessible and drive collaboration and change across the organization. Additionally, the ability to measure key metrics will be the catalyst for the accounts payable change makers to work smarter and take performance to new levels.