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Business Trip to UAE for Education Collaboration

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Business trip UAE 1 150x150 - Business Trip to UAE for Education CollaborationThe Chinese are now increasingly looking at the Arab area as a long-term destination to reside and work. The visit of the Chinese President Xi Jinping to the UAE in 2018 has strengthened the relationship between China and UAE as strategic trade, culture, investment and tech partners with positive outcomes. On February 2019, Saudi Arabia and China agreed to include the Chinese language as a curriculum at all stages of education in schools and universities across the Kingdom. On March 2019, the United Arab Emirates Ministry of Education announced that they needed 200 qualified Mandarin teachers for 200 public primary schools across the whole country. At present, there are over 4,000 Chinese enterprises in the UAE, including large state-owned enterprises with global influence as well as small and medium enterprises and self-employed enterprises in Dragon Mart in Dubai, and the number is increasing.

As a bridge of connecting China and the MENA region, Qadisha Group is helping Chinese tech companies to integrate the MENA region. During the Spring Festival, Qadisha Group with its partner Maryfah, a top education entrepreneur of Mandarin education, organized a business trip to UAE and visited top companies, universities, schools, education institutions, investors, incubators and the Ministry of Education, aiming at providing an online Mandarin training solution for the scarcity of Mandarin training. During the conversations with the relevant entities, Qadisha Group and Maryfah shared their opinions on the structure of training system, the combination of Chinese telecom technology and local education system, the demands of local students and the design of curriculums. Both parties exchanged their ideas on how to implement the education system to match the local demands and discussed the future collaboration on fund and education resource.

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Second trip of seeking future cooperation opportunity between MENA and China

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In the year of 2018, the Chinese governors were working closely together with MENA countries to strengthen their bilateral relations on economy, business, energy and culture collaboration under the framework of the Belt and Road Initiative. President Xi Jinping and Vice President Wang Qishan made UAE as their prior country for state visit in this year. This remarkable move indicates the willingness of Chinese government of enhancing its presence in the MENA region, and establishes Comprehensive Strategic Partnership with UAE.

In responding to the nation’s call, Qadisha Group held its second event on its China-MENA Integration Platform, inviting Mr. Rabih I. Khoury to take a 4-day visit in Tianjin and Beijing. Mr. Khoury is the Chief Exit Officer at MEVP, the largest VC firm in the MENA region. In May 2018, Mr. Khoury took part in Qadisha Group’s China-MENA event, during which he had an initial taste of China’s technology eco-system and entrepreneurship. This time, with a better and deeper understanding of China’s current demands and strategies, Mr. Khoury brings more mature proposals and addresses to Qadisha Group’s partners, including Tianjin Financial Investment and Service Group, CDB Capital FoF Management, Zhonglun Law Firm,  GGVCapital, JD Group, Source Code Capital, Orchid and Tuniu, aiming at offering more tailored solutions and guidance of entering the MENA market. During the conversation with these entities, Mr. Khoury gave a presentation on the overall information about MENA region, its population age structure, internet infrastructure and economy potentials, as well as MEVP’s portfolio, investment eco-system and main funding partners. Both parties exchanged ideas on how to facilitate Chinese companies’ expansion to the MENA market and how to build a fund which can help business owners from both China and MENA countries.

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Meeting Chinese SMEs with Jiu You Hui(九友会) part of Jiuding Group(九鼎集团), in Beijing, to talk about capital market, financial methods and valuation

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jiuyouhui talk 300x177 - Meeting Chinese SMEs with Jiu You Hui(九友会) part of Jiuding Group(九鼎集团), in Beijing, to talk about capital market, financial methods and valuationOn December 16, 2017, Qadisha Group team was invited by Jiu You Hui(九友会)to attend a sharing event in Beijing.

Based on their past management consulting experience and insights on the future capital market, Mr. Marwan Emile Faddoul and Ms. Xibei Tianyu, share the following two topics:

(1) “Comprehensive introduction of financial methods for enterprises”

(2) “How can SMEs benefit from M&A”,

During the event, Mr. Faddoul and Ms. Xibei gave a comprehensive explanation to the audience that includes: the hot industries to focus on in China, the best financial methods to implement when doing due diligence and company valuation.

In the morning, Mr. Faddoul introduced some common financial methods and gave specific explanation on how to analyze financial statements and evaluate a company. During this process, Mr. Faddoul combined his understanding of the Chinese economy along with his years of consulting experience to put forward his original insights and practical suggestions for SMEs. His suggestions, which received a strong response from the audiences during the lecture were presented through cases implemented by Qadisha Group.

Later, Ms. Xibei interpreted in detail the business canvas and used the Airbnb case as an example to show how to correctly present the value of an enterprise and get the attention of investors.

In the afternoon, Mr. Faddoul raised a specific question and divided all the audiences into five groups in order to let them have a group discussion and give presentations on stage. The atmosphere was successfully mobilized and everyone took an active part in it. Later, taking M&A as the theme, Mr. Faddoul gave an overview of the M&A activities in China, and talked about how SMEs could benefit from these activities and what they should avoid when implemented them.

The lecture ended at around 5:30 p.m. Mr. Marwan Emile Faddoul and Ms. Xibei Tianyu took a group photo with the audiences and the staff, to mark the wonderful occasion.

Note: Jiu You Hui (Jiuyousihai Management Consulting Co. Ltd.) is part of Jiuding Group(九鼎集团), one of the biggest financial institutions in China

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Nankai Lecture

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Nankai lecture talk 300x209 - Nankai LectureINTO China and Nankai University invited Mr. Marwan Emile Faddoul, managing partner at Qadisha Consulting, to share his experience and insights on Chinese economy, penetrating new markets and M&A. The lecture was presented in front of students in business school.

With the overview background of the Chinese economy, Mr. Faddoul firstly sorted out the development of Chinese economy, and described the current situation from several angles. Besides, Mr. Faddoul analyzed the reasons of the rapid increase in Technology, Media and Telecommunication industry (TMT) by presenting the latest cases of mobile payment and sharing economy. Then, he indicated the enormous market and promising future in renewable energy.

After that, Mr. Faddoul introduced viable ways to start business and penetrate new markets, especially in China where he shared his own experience. He pointed out some crucial tips in terms of team management, legal environment and finance.

Within the final part of the lecture, Mr. Faddoul explained the development and trend of M&A in China and revealed the logic and reasons behind the situation. Combined with some typical cases, he formulated the reasons of its success and failure, and emphasized the procedures and main risks during M&A process. Then he put forward some specific recommendations about risk aversion and post-merger integration (PMI).

After the lecture, students raised some questions during the Q&A session and Mr. Faddoul gave them specific answers. Besides, he also made suggestions about career development.

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A trip to “Create and Enjoy Class” of CUEB—Key tips to establish your company and integrate your product / service in a new market

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shoudujingmao talk 300x200 - A trip to “Create and Enjoy Class” of CUEB—Key tips to establish your company and integrate your product / service in a new marketOn November 8, 2017, Marwan was invited to Capital University of Economics and Business to give a lecture named “Key tips to establish your company and integrate your product / service in a new market”. As a management partner with 13 years’ consulting experience and enterprise tutor, Marwan shared his valuable experience of establishing a company in China and how to deal with cross-border business in addition to understanding differences in business behavior under different cultural backgrounds.

First of all, Marwan explained the theme of the lecture: What are the main characteristics of an entrepreneur and how does an entrepreneur carry out his own business. Then, Marwan made a detailed explanation about how to prepare the business idea as well as when and how to launch the product to the market. At the same time, Marwan also explained the importance of innovation to adapt to the new market or environment and gave many feasible suggestions for these potential entrepreneurs. The lecture was relaxed and joyful. Marwan had a frequent interaction with the 300 students present. After the lecture, for a long time the students wouldn’t like to leave. They had a heated discussion with Marwan on the issue of their interest. They also expressed their hope of having an opportunity for internship in Qadisha Group and have a deeper communication with Marwan.

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Bussiness Trip to Spain

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friend in spain 225x300 - Bussiness Trip to SpainDuring the October 2017’s Chinese National Day, Marwan Emile Faddoul was invited by ESADE Business School and IESE Business School in Barcelona, Spain, to exchange and share business ideas with MBA students. The topic of his lectures was entitled, Key tips to establish your company and integrate your product / service in a new market, especially the Chinese market.

During the lecture, participants showed great enthusiasm to know about the current situation in China and the opportunities that the market presents. Combined with his own experience, Marwan Emile shares ways to run a business in a new country and gave recommendations on what not to do to become a successful entrepreneur. During his session, Marwan Emile presented his company’s future plans and discussed the process of recruitment, for students who were interested to join Qadisha Group.

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China announces further opening up and economic reforms at Boao Forum

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China announces further opening up and economic reforms at Boao Forum

——New opportunities for countries along the Belt and Road Initiative

 

President Xi Jinping of People’s Republic of China delivered a keynote speech at the opening ceremony of the Boao Forum for Asia Annual Conference 2018 on April 10. The conference runs from April 8 to 11 in Boao, a town of Hainan Province in South China and is themed “An Open and Innovative Asia for a World of Greater Prosperity”.

The 2018 Boao Forum for Asia marks the 40th anniversary of reform and opening up in China and the beginning of the implementation of the decisions made at China’s 19th National Congress. Over the past 40 years, China’s rapid economic development was made possible due to the incremental opening up including establishing special economic zones, entering the WTO, launching the Belt and Road Initiative, etc. China’s GDP has witnessed a huge increase from 367.87 billion RMB in 1978 to 74,358.55 billion RMB in 2016 ever since the implementation of the reform and opening up in 1978. Now China will enter a new phase with the profound changes of the global situation. Similarly, in the future, the high-quality development of China’s economy will still base on a more open environment. As a result, President Xi stated a number of key reform measures while noting that China has strong attention of increasing the pace of implementation and translating these reforms into reality sooner rather than later.

 

(Source: National Bureau of Statistics of the People’s Republic of China)

  • Significantly broaden market access

In 2018, China will launch several landmark initiatives to further open up the economy, including relaxing the restrictions on the establishment of foreign-invested financial institutions, broadening the scope of their business activities in China and broadening the cooperation between Chinese and foreign financial market. In this respect, China has already announced major measures to ease foreign investment restrictions in the banking, securities and insurance sectors.

This is a win-win policy which will benefit both China and other countries around the world. In terms of China, it will reduce the uncertainty that foreign enterprises are facing, which will help to encourage the investment and innovation of foreign enterprises. As a result, the demand of domestic consumers for diversified products can be satisfied while the tax revenue and domestic employment can be driven. Meanwhile, it provides tons of investment opportunities and huge market for foreign enterprises in order to optimize their layout of the global industrial chain. So far a large number of multinational enterprises have gained a super expected return by focusing on Chinese market, which shows a positive prospect for foreign enterprises with a better policy.

  • Create a more attractive environment for foreign investments

Besides broadening market access, China will take measures to create a more attractive environment for foreign investments, including becoming more aligned with international economic and trade principles, increasing transparency encouraging competition while opposing monopolies, etc. In the past, the attraction of foreign capital mainly depends on the preferential policies but now it is time for China to transform into business environment-biased.

These measures clearly respond to the concerns of international investors. In the global background of the apparent rise of trade protectionism, it shows China’s commitment to defending the free trade system. The opening of China will bring much convenience to foreign companies that are located in China, and will play a crucial role in promoting the development of the world economy.

  • Strengthen intellectual property rights protection

Strengthening IP protection is the most important aspect of enhancing property rights protection in China since it will in turn increase China’s competitiveness. Therefore, China will encourage Chinese and foreign companies to carry out technology-related exchanges and cooperation as well as protect the legitimate intellectual property rights of foreign enterprises which are located in China. In addition, in 2018, China will also reorganize the State Intellectual Property Office to enhance law enforcement, increase the penalties imposed on illegal activities and fully release the deterrence effect of the law.

In recent years, China has shown a rapid development in technology innovation. According to WIPO (World Intellectual Property Organization), China’s State Intellectual Property Office has received more than 1.3 million patent applications, which exceeds the sum of the United States, Japan, Korea and Europe. A large number of innovative enterprises have been established in China, including the “Four Great New Inventions” which shock the whole world. The measures launched this time will undoubtedly reduce the risk that foreign enterprises are worried about and make Chinese and foreign entrepreneurs more confident of Chinese business environment.

  • Expand import

The domestic demand is the fundamental driving force of China’s economic development and is essential for meeting the Chinese people’s ever-growing needs for a better life. China hopes to expand imports and promote current account balances rather than aiming at a trade surplus. In 2018, China will considerably reduce import tariffs on automobiles and certain other products. China will also accelerate the process of joining the World Trade Organization’s “Government Procurement Agreement”. In November 2018, China will hold the first China International Import Expo in Shanghai, which is not a general exhibition but a major policy announcement and an initiative action that China will take to open up the market.

As a fundamental driving force of China’s economic development, domestic demand is increasingly becoming more and more important. As is mentioned in The Report on the Work of the Government 2018, in the past five years, the contribution to GDP of consumption has increased from 54.9% to 58.8%. Consumption contributes much more than investment plus net export. At the same time, the consumption structure upgrading is accelerating. The demand for high quality goods and famous brands is constantly increasing, especially imported goods. These measures which are launched this time will provide the biggest market in the world for foreign companies to sell their products, especially those with high technology. This will undoubtedly let more countries make full use of China’s reform and opening up and the dividends of economic development.

Five years ago, China launched the policy of the Belt and Road Initiative, which is aimed at achieving policy, infrastructure, trade, financial and people-to-people connectivity, building a new platform for international cooperation, and creating new drivers of shared development to benefit more countries and people. The Belt and Road Initiative is neither the Marshall Plan after World War II nor an intrigue of China, as alleged by someone overseas, but aimed at a new era of peace and prosperity for all human beings. What China upholds is seeking shared growth through discussion and collaboration. In the past five years, China has built cooperation with 87 countries and international organizations. The total amount of goods trade between China and the countries along the Belt and Road Initiative has been over 5 trillion USD with a foreign direct investment of over 70 billion USD. Chinese enterprises have promoted the construction of 75 trade cooperation zones in the countries along the Belt and Road Initiative, contributing more and more tax and jobs. A large number of cooperation projects have been successfully promoted with the formation of the mutually beneficial network centered the Eurasian continent and radiating internationally. We believe the future of the Belt and Road Initiative will be much brighter with China’s further opening up and economic reforms.

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New Trends of Consumer Economy in China

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In recent years, China is shifting to consumption-led economy. During past few years, we can see a significant increase in the total retail sales of consumer products and the contribution of final consumption to GDP growth. Noticeably, in 2016, the total retail sales of consumer products reached 332,316.3 billion. Moreover, the contribution of final consumption to GDP growth was 64.6%. On basis of Nielsen’s report, the Consumer Confidence Index (CCI) of the second quarter of 2017 showed a growth and reached 112 since the three elements, employment prospect, personal finance and the willingness of consumers all went up. Importantly, these three elements constitute CCI, which is an index that measures how optimistic or pessimistic consumers are with respect to the economy in the near future. The index is benchmarked to 1985=100, and when it is higher than 100, that means positive, on the contrary, that means negative. Statistically speaking, in the second quarter of 2017, personal finance jumped to a new height from 66 to 69. At the same time, employment prospect rose to 68 from 66 and the willingness of consumers soared to unprecedented heights of 56, which is the highest level since 2014. In terms of the data, it is obvious that personal finance had a bigger growth than the other two elements and it plays a crucial role in the growth of CCI.

111 - New Trends of Consumer Economy in China

Source: National Bureau of Statistics of China

What’s more, there is another feature to which we should pay attention – Chinese consumption quality also ramped up remarkably. This increase in consumption quality inevitably stimulates the whole economy. Ali Research (a research institution sponsored and dominated by Alibaba) developed and applied a new index called Ali Consumption Quality Index. It evaluates the development level of the consumption quality and can be measured by the ratio of consuming amount of high and medium products and above to the total consuming amount. The higher the ratio is, the higher consuming quality is. Then how should we define the high and medium products and what are the metrics? Based on Ali Research’s report, for example, if the price of a washing machine is above 2,000 RMB, the washing machine is a high and medium product, and if the price reaches 3,600, it then is a high-end product. Certainly, different products have different metrics.

Ali Consumption Quality Index increased by 24.3 over 2012 to 2017 with a CAGR (Compound Annual Growth Rate) as 27.8%. By contrast, the pace of growth in the total volume of retail sales of consumer products continued dropping for nearly 6 years. When we take the two indexes above into account, it is apparently that there is an obvious shift from the increase of the amount to the increase of the quality. Furthermore, the increase of the consumption quality is an evident symbol of consumption upgrade.

222 - New Trends of Consumer Economy in China

Source: National Bureau of Statistics of China; Qadisha’s analysis

As the increase of the consumption quality, the Post-80s and Post-90s generation’s consumption customs also changed a lot compared with their previous generation. They become more savvy and demanding, with more specific and different needs and wants. For instance, based on BCG’s investigation, up to 2017, when it comes to a category like skin care, the previous generations in China only need one or two products in this category, in contrast, 30% of 18 to 35 years old consumers buy five types of skin care products.

Benefited from the consumption upgrade, more and more opportunities emerge and are now in the ascendant. Based on the data from EIU (Economist Intelligence Unit), between 2017 and 2021, China will add a cumulative $1.8 trillion as the consumption growth and will reach $6.1 trillion as the total consumption. Significantly, it is imperative for companies to seize the emerging consumer opportunities and take over the huge market in China. In conclusion, we recommend that companies should pay more attention to some points that contain consumer segmentation, brand strategy, consumer engagement and market channels.

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Proper ways to build innovation, creativity and enhance entrepreneurs’ performance

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The relation between innovation and creativity is quite debatable, though one point that may link them up is that creativity is not necessarily innovative, but innovation is essentially creative. This is because someone can create something that already exists somewhere else yet wasn’t aware of it. But when someone or a group of people innovate, creativity is definitely involved in that process. How can that difference be realized prior or during the development of a project in order to allow for a quicker way to reach a proper result?

My friend Henry and I have been debating on the factors that influence that, and how these factors can be changed so that a better direction can be attained from the early stages of conception and on to the final stages of implementation.

Well,we agree that one of the primary factors is to have a good team, and when I say a good team I’m not talking about a group of people working hours away in an enclosed space. I’m talking about a group of people, which first and foremost have learned how to trust each other, that know each other, that like to spend time with each other, share laughs and problems. Because through that they will make themselves and their fellow colleagues more effective, more at ease to admit failure and happier when sharing success. It’s this team that is going to be the main driver of all the other factors. By knowing each other well enough, what may have started as a rigid hierarchy, will eventually mutate into an organic entity that understands its limitations and what each element is better at doing.

Like Henry said: If we have a car, with its different pieces and components. If the tires don’t have any connection to steering wheel, even though the wheel turns, the tires won’t respond. Same thing happens with people, if one person is signaling to the other to turn, but the receiving person doesn’t, or is unable to get it, the result is zero, or in the case of a car it might very well be crashed away. Still the brakes should be there and if the driver (which can be seen as the manager) gives the command to brake, if there is no connection between the pedal and the physical brakes, a disaster might happen.

So the team has to be linked together, to communicate in the purest sense of the word, only then they will be able to be at ease to build on each other’s ideas without any sense of stepping on the others toes, eventually this will certainly improve the team’s performance.

Another important factor to take into account, is keeping the ideas organized. Even if the team is able to generate several good ideas in one session, if these ideas are not properly organized from the start, problems and confusion will happen.“Priorities are of the essence” – said Henry –“because they are a primary way to organize a task” (usually in a timeline). If we take the example of building a pyramid and we start by the top, then we have to raise that top and get all the other layers under it, layer by layer. What a waste of time! Categorization is also a good way to keep things in its place,finding the right categories is usually the hard part, but as soon as these categories can be filtered to the most essential aspects that are crucial to project,everything becomes much clearer.

We can use a different and maybe more clarifying word for this. That word is composition. Let’s say I take 5 squares of different color and shape, and organize them on a surface. At first they may not look so beautiful but as I change their order, you’ll see that beauty starts to emerge (having some sense of aesthetics will also help). This beauty is a result of good organization. When organizing ideas, if the way they are composed is thought of as a way of turning them into something more meaningful, easier to navigate in order to achieve a predefined result, the whole on ward process will be much smoother.

As Henry and I were talking, we realized time was passing and we were quite happy to have already developed some interesting points, almost exactly at the same time we both pressed that button that reads time.Time investment is a necessary prerequisite of any good and well developed project. Not only the time spent around the definition of the problem and its resolution, but also the time when one is not thinking about it, like a glass of water where you just dissolved an aspirin, the water becomes foggy (that’s when you should drink it), but if you wait 5 minutes, the bits of aspirin will settle down and the water will be clear again.

Not only is time important in this sense, but it is also important in the sense of a deadline. Having a deadline is a good foundation since time constraints helps people to be more focused and to channel their efforts better. Breakthrough ideas come from an accumulation of pressure over time and, the successful ones usually get unveiled at a time of need, when it just can’t wait anymore and it has to be ready. Actually time is what makes everything hard, since it’s the only limited and non-renewable resource we have. Time management is one of the hardest core capacities that any company has to deal with in many ways.

There was this very famous company (of which I will not mention the name) who developed an app that would make everybody’s life easier in a very simple and effective manner. The app was conceived, developed and presented to the market at a very short period of time, in order to step in before anyone else, not realizing that the problem the app was solving was actually a problem. This company had invested so much into the development of their product that they could not wait for the market to wake up and realize how it needed it. The company ended up filing for bankruptcy and their achievement forgotten in the sands of time. Then some time later another company who had also been developing a similar technology, entered to market at a time when many people were already asking for a solution. Of course, these guys made it and became quite successful as a result of entering the market at the right time.

Sometimes having a good performance without considering the multitude of aspects that time can affect may lead to disastrous results, like jumping into a pool that hasn’t yet been filled with water.

We talked a bit more, but we already spent quite some time there and our thinking and communicative performance was already giving away because another essential factor to a good performance is to rest well, specially sleeping well, as many recent studies have been showing that sleep is a mechanism to organize information in our brains. Not doing so, will lead to more disorganized thought processes that make any decision harder.

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What is the advantage of a B2B business in an e-commerce world?

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The Chinese culture is truly fascinating and for someone likeme who lived the vast majority of his life in Europe, there are striking difference in several aspects of life. Probably more astounding are differences in fields such as education and business. Talking to my local desk-mate DM (alias) at work, I realized how avidly the new generation looks at entrepreneurship, craving freedom, balance in life and success. The new generation approaches business with a lot of passion but still the larger portion selects a B2C model as most appropriate for their venture, overlooking the benefit of going B2B. The issue lies in the widespread misconceptions that a B2B business model that cannot take full advantage of new technologies, such as the IoT or e-commerce platforms, and also is the result of obscure processes. This is just that, a misconception.

Discussing with DM during lunch break, we listed some of the major differences between the two pure business models so to have a clear idea of what choice young entrepreneurs face. On one side, there is the B2C model that is based more on impulse, quick decisions and no time to make comparisons – if not with the immediate local items. On average, purchases are small in value and volumes are high. The stakeholder involved is only one, the decisiontaker, the customer. On the other side of the spectrum, there is a B2B model, in which orders are usually more complex, costly and involve a large number of stakeholders. Take as an example buying a new laboratory. Technical staff evaluates performances while IT department looks at software integration, the finance department usually cares only about costs while the HR department is involved in developing specific personnel training. Managers in the end will take all available information into consideration andcoldly take the final decision. This process is cumbersome but not obscure once laid out and if addressed in the proper way canturn very profitable. I am a strong believer of ripping benefits from business digitalization, so I challenged myself to find ways for a B2B business to improve through the adoption of technology and explain them to DM as if he were a graduate from a local university who’s interested in starting his venture but is unsure of the path to walk. The wide spread e-commerce platforms have proven very effective for B2C and here are the reasons for which I believe they can be even more effective for a firm operating on a B2B business model.

  • Big data. Through the e-commerce platform it is possible to gather large amount of data that canbe used to improve revenue forecasts, understand of customer’s buying cycles and possible seasonality effects. It is becoming increasingly important to analyse the elasticity of the focus market as knowing the price at which demand and supply coordinate do not suffice anymore, this can be achieved through acquisition and analysis of data. Also, the mass of information gathered can be leveraged to improve customer segmentation and product portfolio so to capture and retain the most profitable accounts. Big data can be an important tool to install and maintain continuous improvement practices, which only a small percentage of firms have in place.
  • Operational excellence. In a B2B environment firms deal with a great variety of order types and are less likely to follow rigid supply-chain process, so being able to dynamically adapt prices to market demand in automatic mode is strategically important. Level of service can be improved by interfacing the online platform to Omni channel solutions, which distribute information/tasksfrom multiple channels to the available resources increasing responsiveness and customer centricity. Integration with the order management system across multiple channels allows to communicate directly with different warehouses, this in turns creates a small JIT that reduces cost very visibly. It holds true even more if the B2B firm move towards cloud and cloud applications.
  • Marketing. Through the e-commerce platform, a B2B business can address the relevant stakeholders by emphasizing the solution provided to their problems. Most of the customers buying B2B surf the internet hunting for information on the purchase they’re after, so a B2B firm should help them in the selection process providing additional information that would not be needed in a B2C environment. Continuing along the line of collaboration, speaking the language of the industry, providing multiple payment methods and creating a direct connection with the sale department helps customers making their rational decision. One additional benefit of forging an alliance with the customers is an increasein retention rate. For a B2B business selling services the amount and complexity of information to be provided are greater.
  • Account management. The e-commerce platform helps capture subscribers to newsletters and promotional mailing list. In turn, firms can simplify account management thanks to the important information gathered about their customers.
  • Pricing. There is a risk in publishing a great quantity of information about a firms’ product lines, that is a search engine can easily find data for many providers of the same product, aggregate them and lead to a commoditization of the products. To counter this eventuality and avoid competing on prices, a Configure-Price-Quote system can set prices dynamically.

All in all, the benefit for a B2B firm leveraging technology can be seen across multiple aspects of the business. At this point the question is why DM in his fictitious role of recent graduate should still hold his belief that B2C is the best choice for his venture. I realized that there are some very good advantages in starting a B2B business during a time in which everyone is going digital. The first immediate reason is that in a B2B business it is possible to achieve the same profit of B2C but with fewer accounts. To do that, attracting customers is the way forward and for a B2B business it is possible to just to buy word searched for the long tail keywords connected to specific characteristic of the product sold. There is little chance that two offerings have the exact same characteristics and so probabilities to show high in the search list increase. Moreover, for B2B business it is not mainstream yet to leverage an e-commerce platform, according to Forbes the estimated total spending on e-commerce technology for B2B is twice the spending for B2C businesses, which leaves a big market untapped. I found interesting how at times the choice to go B2B instead of B2C derives purely from addressing customer pain point in some part of the purchasing journey. Some famous examples are Amazon and Facebook who started their payment system to facilitate customers’ purchases through their website, ending up becoming the pain point for the banking industry. During our lunch break I managed to push DM to consider more prominently a B2B business model. Hopefully going forward more and more entrepreneurs looking to start a venture will consider to develop such a B2B model, without fearing technological revolution or rational decision processes, and instead riding them to rip all the benefits they bring.