Friday, January 19, 2001

80% of Firms Will Buy Online in 2003, But Only 40% Will Sell

In a eCommerce: B2B Report released over the summer, eMarketer predicts the rapid growth of B2B e-commerce will continue as firms take steps to fully engage e-business practices. Companies will go beyond mere “net presence” and will continue to integrate key B2B applications to procurement, customer relationship management and supply chain integration.

The report finds that most firms will be purchasing online, rather than selling via the internet. By 2003, between 30% and 40% of companies will be selling online, compared to 80% to 90% of firms that will be buying via the internet.

The report further indicates that more B2B marketplaces and exchanges will be established and will grow in complexity. Small businesses, which so far have been slow to adapt to B2B will rush to catch up. Ninety-eight percent of medium and large firms are already connected to the internet with 41% engaging in e-commerce. In 1999, only 8% of small businesses engaged in e-commerce, though many were online, but by 2003 this share will jump to 72%.

The eCommerce: B2B Report adds that new internet strategies need to be combined with the full range of business automation. “The entire integration of Business Automation into eCommerce is evolutionary, not revolutionary,” states Steve Butler, Business Analyst at eMarketer. “The internet has become the last piece in the puzzle, tying communications and transactions together.”

Key findings of the eCommerce: B2B Report: · Worldwide B2B revenues will grow from $185 billion in 2000 to $1.26 trillion in 2003. · US B2B will reach $747 billion in 2003, accounting for 59% of worldwide B2B eCommerce. · 72% of small businesses will engage in eCommerce by 2002, equaling $230 billion in revenue. · 7% of B2B eCommerce presently flows through non-proprietary B2B exchanges - this will grow to 34% of total B2B by 2004.

“What’s overlooked in the great B2B debate,” notes Butler, “is that businesses need to look clearly at their purchasing and selling patterns, as they develop e-commerce strategies. Distinctions need to be made between direct and indirect procurement needs, and long-term versus short-term sales and purchasing relationships. High-volume, commodity-like goods will most easily be exchanged online. But for roughly half of small businesses which don’t deal in these goods, basic marketing and customer services may be sufficient.”

In addition to noting the remarkable growth and development in Business-to-Business eCommerce, the B2B Report unveils the trends and challenges presented to the marketplace. New strategies and even newer vehicles emerge on a daily basis. The B2B Report explains how these elements garner such importance to online business.

Additional discoveries in the eCommerce: B2B Report: · American dominance of B2B eCommerce will decline as other countries catch up – but the US will still account for almost 60% of total B2B · There are many more buyers than sellers online · Three business models will dominate online exchanges · Businesses must prepare for the advent of XML · Broadband internet access will take e-commerce to a higher level.

Mobile Internet Usage To Surpass Pc-Based Access In Latin America
More than 50 million Internet users in Latin America will access the web via mobile devices by 2005 - making wireless Internet access in the region almost as widespread as access from PCs, says Jupiter Research. Jupiter analysts, however, caution local web ventures that mobile access will serve as a way to extend existing relationships and build customer loyalty - not a way to break into new audiences or generate new revenue streams.

"In Latin America, more than in the U.S., a substantial population of consumers will emerge who access the Internet only or primarily from a mobile phone. But for most online businesses in Latin America, the biggest payoff of mobile access will be in driving loyalty with existing users," said Lucas Graves, senior analyst at Jupiter Research.