Retaining Clients in B2B E-Marketplaces: What Do SMEs Demand?

Retaining Clients in B2B E-Marketplaces: What Do SMEs Demand?

Qiqi Jiang (Copenhagen Business School, Frederiksberg, Denmark), Chee Wei Phang (University of Nottingham, Ningbo Campus, Ningbo, China), Chuan-Hoo Tan (Department of Information Systems, National University of Singapore, Singapore, Singapore) and Jiayu Chi (Sun Yat-sen Business School, Sun Yat-sen University, Guangzhou, China)
Copyright: © 2019 |Pages: 19
DOI: 10.4018/JGIM.2019070102

Abstract

Business-to-business (B2B) e-marketplaces serve local small and medium-sized enterprises (SMEs) by assisting them in connecting with potential overseas buyers. They leverage multiple channels to connect with and bring potential leads to SMEs. The authors' understanding of such an intermediary has been either largely impaired by limited studies on the services that e-marketplaces should offer or implicitly deduced from business-to-consumer studies. In this work, the authors attempt to unveil whether the efforts that an e-marketplace has made are associated with the continuance of its SME clients. To answer this research question, a set of data from a B2B e-marketplace connecting qualified SMEs with overseas buyers was used for analysis, and they discovered three results. First, generating many online leads is negatively associated with SMEs' continuance with such an e-marketplace company. Second, organizing many online videoconferencing meetings between SMEs and buyers can promote this tendency, which is different from organizing many offline meetings. Third, onsite visits that e-marketplace salespersons make can attenuate the negative effect of the generation of online leads. Their follow-up interviews unveiled that SMEs only desire sufficient attention to obtain tangible results from a B2B e-marketplace.
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1. Introduction

Business-to-business (B2B) e-commerce represents a major type of e-commerce that is deemed to play an important role in driving economic development. B2B e-commerce is expected to double the size of business-to-consumer (B2C) commerce and to amount to $6.7 trillion by 20201. B2B e-marketplaces provide online platforms that link corporate buyers and sellers together and facilitate cross-border trading. Such B2B e-marketplaces (e.g., Alibaba.com and Tradeindia.com) help domestic small and medium-sized enterprises (SMEs) in developing countries to connect with international buyers, who were previously beyond their reach (Cho and Tansuhaj, 2013). Given that SMEs are the engines of developing economies in many industrial sectors2, e-marketplaces play a significant economic role.

Despite their pertinent role, B2B e-marketplaces have received considerably less attention from scholars than their B2C counterparts have (e.g., eBay in the United States and Taobao.com in China). In the limited literature, studies have explored the values of B2B e-marketplaces by considering macro-level factors, such as those related to the environment (e.g., economic growth and regulation), service, and operations (e.g., revenue model) (Aladalah et al., 2014). Along this stream of research, other related works have advocated the importance of value creation by providing useful information and facilitating negotiations (Zhao et al., 2008a). They have also explored institutional structures in B2B e-marketplaces that could foster inter-organizational trust, and they have discussed how B2B e-marketplaces should be evaluated (Qu et al., 2015).

Although taking an elevated or institutional-level perspective result in a growing understanding of B2B e-marketplaces as operating organizations, such a perspective has resulted in a vacuity in these e-marketplaces’ functional existence. To realize B2B e-marketplaces’ values, one pre-condition is to acquire sufficient clients to use and continue to pay for e-marketplace services. B2B e-marketplaces typically survive by charging sellers, many of which are SME manufacturers (e.g., Alibaba.com), contractual service subscription fees. We found only an extremely small number of studies investigating the usage of B2B e-marketplaces—particularly how SMEs decide to use e-marketplaces (Cho and Tansuhaj, 2013), how companies use B2B e-marketplaces, and the underlying rationales (Li et al. 2013). Research addressing continuance usage or client retention, which is crucial for B2B e-marketplace survival (Rauyruen and Miller, 2007), is increasingly becoming scarce. However, the study of Yen and Tseng (2014) investigated how the development of a sense of a virtual community among members increases their intention to continue to use a B2B e-marketplace.

Using a set of data from a B2B e-marketplace that connects qualified local SMEs to international buyers, this research provides implications in three ways. First, we provide insights into what contribute to or undermine SMEs’ continuance with a B2B e-marketplace, an issue that has received limited attention in the literature. These insights are valuable for B2B e-marketplaces to promote their continuance by allocating their limited resources efficiently to the areas of concern to SME clients. Second, our study employed objective data to derive insights, which may complement existing studies that mostly relied on the survey method (e.g., Rauyruen and Miller, 2007; Yen and Tseng, 2014). Specifically, by collaborating with the leading B2B e-marketplace in China, we were provided with access to database records (anonymized to preserve identity) that provided information on 1) the generation of online leads that international buyers make to each SME client through an e-marketplace, 2) online videoconferencing meetings between interested buyers and SMEs that the company organizes, 3) offline meetings (trade events) that the company organizes, and 4) whether an SME has re-contracted with the e-marketplace. This access enabled us to analyze objectively if efforts that the e-marketplace makes are associated with the continuance of its SME clients. We also conducted follow-up interviews with the SME clients to understand the underlying rationales of the findings obtained from analyzing the objective data.

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