Growth Opportunities for Industrial Ecommerce companies in major Asian MRO markets

Large and medium MRO buyers consider e-procurement as an important sourcing strategy to reduce total cost of procurement. Electronic procurement defines the level of automation in an organization’s procurement process using web-based applications. It enables widely dispersed buyers and suppliers to come together, interact, and execute purchase transactions directly over the Internet. From creating and submitting POs to receiving and paying for goods—all transactional data is automatically routed through workflow processors, reducing the time and cost of procurement activities, and boosting operational efficiency of the e-enabled organization

Since MRO buyers are increasingly sourcing through e-procurement, the market for industrial e-commerce is growing. Grainger, a leading MRO distributor in the U.S. generates more than 30% of its annual revenues through e-commerce. With e-commerce sales in excess of $3 billion Grainger is ranked 13th among the internet retailers in the U.S. In comparison, Asian markets have a presence of 3rd party marketplaces and small distributors which currently target only the small to medium businesses. This paper discusses the potential of industrial MRO e-commerce in India, China, and Japan with the growth in adoption of e-procurement among major industrial MRO buyers