B2B analysis is fundamentally different from B2C market analysis yet they both strive for the same goal: to stay in touch with the industry pulse. Industry leaders are constantly on the watch for 360-degree view on key buyers, suppliers and competitive landscape to make informed market strategies and /or assessing future growth potential.
B2B customers are much more sensitive in reacting to economic fluctuations. If compared to personal consumption expenditures, B2B markets drop faster and lower in the light of the economic crisis. It is more important to track the industry’s pulse to spot opportunities or threats. Public data offers some insight and relieve. However, international players operating in a wide area of industries and geographies struggle to benefit from the available data points, as they often lag in time and are not comparable among countries, industries or even indicators.
B2B players are constantly in need of efficient and systematic market research framework serving medium to long-term company strategy needs.
The global market view of Electronic components
We have chosen Electronic component industry as one of the key constituents in a wide variety of manufacturing industries to showcase how B2B data awareness can enhance the spectrum of business know-how through evaluation of global supply chains and competitive landscapes of B2B demand.
Top 5 B2B Sectors’ Expenditure on Electronic Components Globally in 2017
Southeast Asia – demand hub for electronic components
Taking a closer look at the largest gains and losses over 2012-2017, we can see how South East Asian countries have risen in the production of core industries using the electronic components. While China and US remain undoubted leaders over the period of 2012-2017, the production growth in value terms, in key electronic component markets like mobile phones, electricity distribution devices and TV’s have made a dip in developed economies like Japan, South Korea, Finland, Sweden, and France, and significantly increased in Vietnam, Philippines, Malaysia, Taiwan and Indonesia. As assembling of final electronic products is shifting its gravity centre for consumer electronics to South East Asia, China and the developing economies are focusing on value-added intermediate electronic device manufacturing e.g. semiconductors, electricity distribution devices.
Expenditure on electronic components is fastest growing in the transport equipment sector
Looking at the data from another perspective, we can also take a closer look at the top revenue generators for the electronic component manufacturers. Analysing supply chains of the top 20 largest B2B spenders on electronic components, the actual fastest CARG growth over the period of 2010-2017 have been observed in the transport equipment sector. Over the period expenditure on electronic tabs and valves by automotive, aircraft, maintenance and repair of motor vehicles have been growing the fastest among the largest 20 B2B spenders.
Transport equipment manufacturers are at the forefront of the Industry 4.0 adapters, big data and IoT implementers. According to our statistics in US transport equipment sector is among the leaders in terms of placing orders online, which shows how strong the supply chains of automotive producers are being digitalised. Electronic components industry is at the core of automation and digitalization processes in the manufacturing sector. Industries with long supply chains (such as transport equipment), large product portfolios (consumer electronics) and precision-driven industries (hi-tech goods) is expected to remain among the largest benefactors of rising e-commerce and supply chain digitalization, driving demand for electronic components.
E-commerce – a future game changer in B2B industry
Electronic component manufacturers are already experiencing the benefits and losses of the change. The global B2B e-commerce market is valued at USD4 trillion and is forecast to continue growing. The e-commerce is attractive for manufacturers as it helps to expand their client pools, reduce sales costs and frees up valuable time of sales staff, which can be allocated to offering higher-value services for clients. Developed countries with strong manufacturing industries and good IT infrastructure lead in the e-commerce market, although emerging countries are catching up.
In terms of industries, those with high demand for spare parts, large B2B market potential, simple delivery process and advanced IT solutions have the most potential to implement e-commerce solutions. Euromonitor International’s Industrial database helps to identify which geographic markets and industries are the most active in business activities digitisation and offer the best prospects for future deployment of B2B e-commerce.
Manufacturing industries most ready to start B2B e-commerce
Why market research matters for business strategy
While the top-down global view of data provides a picture of demand points in developing economies and concentrated in consumer electronics industries, a closer look allows us to pinpoint the more focused gravity points from geographical and industrial perspective. Insight and market research can help identify the potential market size by B2B market segment and enable companies to benchmark their performance against an industry’s average. Production growth, profitability, labour costs and supply structure are key metrics that can be benchmarked. Market research helps identify key game-changers for decision-makers to help them prepare and adapt to the changing business environment.