Expedia Group has found notable success in its B2B segment, which is now valued at $25 billion. The company leverages its consumer-facing assets and expertise to serve business clients, driving new growth without harming its core B2C business. This strategy has led to synergistic relationships between the two business models, enhancing each other’s performance.
Expedia’s B2B division powers travel programs for major corporations like Delta Air Lines, American Express (NYSE:AXP) Global Business Travel, and J.P. Morgan Chase. Historically, the travel company’s consumer-focused operations have included popular platforms like Expedia.com, Hotels.com, and Vrbo. Now, with the B2B segment, Expedia is tapping into a market that reportedly represents just 3% of its serviceable addressable market, underlining significant growth potential.
Similar strategies have been observed in other companies. Amazon (NASDAQ:AMZN)’s B2B segment has expanded substantially, leveraging the company’s established eCommerce infrastructure to serve business clients. Additionally, artificial intelligence firms like Anthropic and OpenAI have introduced enterprise-focused products, emphasizing the potential for companies to diversify and grow through B2B expansions.
Utilizing Existing Assets
One of the key advantages for companies entering the B2B market lies in the ability to utilize existing infrastructure and resources developed through their B2C operations. This approach reduces costs and maximizes the utility of logistical, technological, and customer service frameworks already in place.
“Expedia B2B represents just 3% of the company’s serviceable addressable market,” the company noted in its presentation.
This demonstrates the untapped potential within the B2B market, encouraging firms to explore these avenues without fear of cannibalizing their B2C operations.
Diversifying Revenue Streams
Expanding into the B2B market allows companies to diversify their revenue streams. This diversification reduces dependency on the volatile consumer market and mitigates risks associated with economic fluctuations. B2B clients, often characterized by fewer but larger transactions, provide stable and long-term revenue opportunities.
B2B customers typically require more tailored solutions, resulting in high-margin opportunities and long-term contracts. These factors contribute to the overall stability and profitability of businesses venturing into the B2B arena.
Expedia Group’s expansion into the B2B market exemplifies how companies can grow without cannibalizing their core offerings. Leveraging existing consumer-facing assets and expertise, companies can create synergistic relationships that benefit both B2B and B2C operations. This strategy not only diversifies revenue streams but also enhances overall business stability and growth potential.
