Building B2B Ecosystems Helps Firms Grow Without Cannibalizing Core Offerings

In today’s uncertain operating environment, every dollar counts.

With ample whitespace in the B2B market, companies are increasingly discovering that they can use their consumer-facing assets and expertise to serve business clients, unlocking new growth without undermining their core business.

While some may assume that launching a B2B line could cannibalize an existing B2C offering, this is often not the case. B2B expansions frequently create synergistic relationships with B2C operations, where each line enhances and supports the other.

Take, for example, Expedia Group’s $25 billion B2B business, which powers travel programs for Delta Air Lines, American Express Global Business Travel, J.P. Morgan Chase, Marriott Vacations, Walmart, Trip.com and 60,000 others.

During a presentation at Deutsche Bank’s 2024 Technology Conference Aug. 29, Expedia Group CEO Ariane Gorin explained that her firm’s push into the B2B space is “incremental” to the platform’s consumer businesses, which include Expedia, Hotels.com and Vrbo, and that the company has seen no sign of cannibalization.

Underscoring the benefits that the B2B landscape offers, Expedia noted in its presentation that Expedia B2B represents just 3% of the company’s serviceable addressable market.

One of the best ways for businesses to grow is to find a new channel and build a new ecosystem.

Read also: Amazon Doubles Down on Procurement With New Business-Buyer Solutions

Using Existing Assets to Create New Revenue Streams

One of the most significant advantages companies have when entering the B2B space is their ability to use existing infrastructure, resources and expertise developed through their B2C operations. This overlap allows businesses to expand into B2B markets at a lower cost, as much of the foundational work — logistics, technology and customer service frameworks — has already been established.

Amazon serves as an example of this. As the company grew beyond its consumer eCommerce roots, it developed Amazon Web Services (AWS) to address its internal infrastructure needs. AWS, now a B2B cloud computing giant, became a revenue driver for Amazon without competing with its consumer business.

Amazon’s B2B business has only grown. Last year, Amazon Business Director and General Manager Todd Heimes told PYMNTS about the multiyear effort to extend consumers’ familiarity with the eCommerce giant to business accounts.

“It’s still ‘Day One’ for Amazon Business,” Heimes said. “And we’re just getting started. The opportunity to continue serving these customers is great.”

At the same time, companies across the artificial intelligence landscape are also deploying their models toward enterprise use cases. Anthropic introduced a Claude Enterprise plan Wednesday (Sept. 4) that helps organizations collaborate with its AI assistant, Claude, using internal knowledge. The new plan includes an expanded 500K context window, more usage capacity, a native GitHub integration and enterprise-grade security features.

Meanwhile, one year after launching the first of its three business products, OpenAI — the maker of consumer-focused chatbot ChatGPT — said Thursday (Sept. 5) that it now counts more than 1 million paying business users.

See also: Why Firms Should Focus on Individuality to Build Their Own B2B Ecosystems

Risk Diversification Through B2B Expansion

By expanding into the B2B market, companies can diversify their revenue streams, reducing their exposure to the volatility of consumer spending. While B2C markets tend to focus on a large volume of small transactions, B2B clients are often characterized by fewer but larger deals.

These clients require tailored solutions to meet their complex needs, which can provide businesses with higher-margin opportunities and long-term customer relationships. B2B clients, especially in sectors like technology, logistics and manufacturing, tend to enter longer-term contracts and exhibit more stable purchasing patterns.

For firms looking to capture share in a new market, payments are one way they can help position themselves apart from the incumbent crowd. The PYMNTS Intelligence study “Getting Paid: Digital Payments for Improving Cash Flow and Customer Experience” found that 75% of organizations still use paper checks despite their high costs and inefficiencies.

Many B2B firms are looking for a better way to transact, however. The PYMNTS Intelligence report “Building Better B2B Relationships Through Payments Innovation” found that innovations like automation, virtual cards and digital payments are becoming cornerstones of B2B payments, with businesses increasingly recognizing their role in strengthening buyer-supplier relationships.

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