B2B Marketplace and Individual Service Providers: Forward or Reverse Aggregation?

beautician

Last month I needed to see a doctor and searched for the doctor on google. I got the number for his clinic and I called up to learn that the doctor is dong video consultation only. At the appointed time, I made a video call to the doctor and could complete the consultation and received my prescription on my number. ( Not to forget, I had paid the fee in advance on a Paytm account). It was a neat prescription generated through software which had the symptoms, diagnosis and prescribed medication details. There was a follow-up visit date mentioned as well. At the bottom, the prescription read, powered by xyz.com. An example of a business marketer providing a solution to a medical practitioner to manage his/her business better.

A dominant business model in the online B2B space focused on being a bridge between the buyer and the sellers. Firms like IndiaMart thrived on getting the buyer and seller connected for transacting business across product and service categories. An extension of this model came up in consumer business with Udaan taking shape and helping FMCG companies to serve small-town and rural markets. The recent development at Jio which plans to revolutionize the e-grocery space by working with Kirana stores is another action-packed business thriller in the making (backed by Facebook and google – which gives Jio an unmatched technology push). All of these business models are pivoted on the buyer-seller exchange with an important twist – they are conceived and executed with customer value at the core. A win-win for both the buyer and the seller. For example, in the Jio’s Kirana push, customers will get better product assortment and service along with competitive price, Kirana stores will be able to manage their business better and serve the hyperlocal demand.

And then we have the level three of the service provider and customer exchange!

The example of my video consultation with the doctor which took service of a software provider is a case in point. A big market waiting for the next phase of growth is made of individual service providers who could be a barber, a plumber, an electrician or a beautician. As you read this, you have already started thinking about the urban company, formerly known as Urban Clap. This company has been selling the idea of getting things done at home. But what about serving a large number of neighbourhood salons/beauty parlours who could be served with customer demand and delivery of improved customer service; for example appointment and payment management at the salons. Clearly, there could be many more edu-tech companies sensing the opportunity to serve schools and colleges. But a profitable niche could be somewhere to build market offerings for individual educators in schools and colleges and independent tutors.

Steven Kaplan and Mohanbir Sawhney in their HBS article in 2000, proposed the idea of forward aggregator model and reverse aggregator model. So far, most of the e-marketplace follow the forward aggregation model. Since most of the reverse aggregation opportunity exists in exchanges, it would be interesting to see a reverse aggregation model emerge.

The opportunity could be hidden in the market comprising individual service providers.

 

 

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