- "Digital B2B marketplaces have the potential to revolutionise international trade in several sectors"

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Rising more rapidly than ever in the wake of the pandemic, the popularity of digital marketplaces signals a change in the world of B2B trade that has the potential to be revolutionary. Driven by data science and state-of-the-art auction technology, this type of digital infrastructure can facilitate scalable, cross-border commerce, and could therefore fuel a great leap forward in the efficiency and accessibility of international trade.

Technology of the type developed by NovaFori, for instance, has made a positive impact in what might be termed “traditional” industries, such as the market for fine art, as well as emergent sectors such as the carbon credit trade. Moreover, global value chains, linking disparate and often unequal economies spread across the post-pandemic world, have benefitted from the new opportunities afforded by digitisation.

What we have seen of digital transformation thus far suggests that, excitingly, there are even more developments to come.

Source: Pexels

Bringing data science to the fine art market

Online auction platforms backed by data science have accelerated the digital migration of the art market, which has traditionally been slow to embrace innovation.

Leading auctions houses such as Christie’s have embraced online auctions since the start of the pandemic, when uptake of these platforms allowed them to retain a semblance of business as usual. In the current environment, online auctions are becoming the norm, and are accelerating.

This uptick in activity is partly due to the greater customer base unlocked by digital migration. Accepting bids from across the globe is now a more streamlined process, while auction houses have been able to attract young people who would never consider travelling to an auction in person.

Moreover, data-driven insights gained from the most innovative platforms empower auction houses to make the most of their evolving customer base. Platforms equipped with a machine learning function, for example, can increase the accuracy of price estimates by consulting the bidding history of registered users.

Online auction platforms are therefore helping unlock the future of this industry that has previously remained much the same for generations. These platforms are also making an impact, however, in markets that have emerged considerably more recently.

Source: Pexels

Counting the cost of carbon

Carbon trading is perhaps the most critical global market to have emerged in recent years. Anyone in doubt about its importance need only look at the discussion generated by the issue at COP26. This conference yielded provisional plans for a UN-regulated market for trading carbon offsets, which has prompted an increase in demand for such marketplaces in Asia in particular.

NovaFori has partnered with Climate Impact X (CIX), a joint venture between DBS, SGX, Standard Chartered, and Temasek, to deliver a transparent exchange for high-quality carbon credits. This marketplace, which integrates NovaFori’s trading technology with data on pricing, risk, and environmental impact, delivers an end-to-end solution for corporates looking to invest with integrity in projects that reduce and prevent carbon emissions.

Given the increasing interest in carbon credits as a means for global economies, particularly developing ones, to meet their net-zero goals, the importance of scalable digital infrastructure capable of managing the cross-border trading of credits is assured.

So digitisation is demonstrably transformative in industries old and new. But to make global trade truly borderless, it must be able to streamline the process by which raw materials are transported across the world and developed into finished products.

Adding value to the value chain

Fortunately, the commodities sector is ripe for the value-addition potential of digitisation. A value chain is the process by which a business receives raw materials and adds value to them via manufacturing, processing, or refining, to create a finished product that is then sold. This is a process that, moreover, has the potential to be optimised by the adoption of digital marketplace infrastructure.

In the mining sector, for instance, digital marketplace technology can help improve efficiency and transparency in value chains. While the sector is highly technologically advanced in numerous ways, its marketplaces have generally lagged far behind, with most businesses still dealing with intermediaries in an analogue way that is costly in terms of time and money.

Moreover, the lack of transparent pricing creates inefficiencies in the market which could be avoided by adopting data-driven digital marketplaces. Introducing price discovery tools would reduce price spreads, which are often lucrative for intermediaries but costly for the businesses who use them. Embracing this technology would therefore empower those who put the value in the value chain to reap the benefits fairly for themselves.

Breaking down barriers in cross-border trade

Digital B2B marketplaces have the potential to revolutionise international trade in several sectors, including fine art, carbon offsets, and commodities. From widening access to art auctions to democratising global trade networks, this technology promises to improve the way the world does business from an efficiency, economic, and environmental perspective.

Considerable progress has already been made in the digital transformation of B2B markets. Most exciting, however, is the fact that this progress is only the beginning.