Business Model Innovation with Value Creation Approach in B2B E-Commerce

Abstract

The rapid development of the digital era accompanied by the COVID-19 pandemic has made many business owners switch from selling offline to selling online. The emergence of the online B2B (Business to Business) marketplace is poised to experience exponential growth in the coming few years. However, ULA as start-up B2B e-commerce in Indonesia experienced decreasing trend for the last 6 months from GMV (Gross Merchandise Value) and active stores. This research is aimed to identify B2B e-commerce challenges and propose business model innovation to create long term revenue for B2B e-commerce in ULA with value creation approach. This research will use primary data which gathered through qualitative interviews and company internal data. The researcher conducted interviews with stall owners and compared the results of the interviews with the C-Level of ULA. All data will be analysed by using business model analysis from Afuah (2014) to identify the root cause of slow growth of ULA in the recent months and using value creation approach from Amit and Zott (2001) to propose business model innovation. There are four value dimensions of value creation in e-business; efficiency, lock-in, complementarities, and novelty, which are coherent with ULA as B2B e-commerce. The results of this study stated that customer segment and value proposition of ULA become had wrong positioned and are the cause of the decline in business performance. ULA B2B-commerce should focus on the strategy used to overcome these problems by leveraging the four sources of value creation and developing business model innovations. This strategy can be implemented by providing workshops and partner assistance for small retailers to improve their economy.