The phenomenal growth of ecommerce is being driven primarily by business-to-business trading communities, according to the latest findings from researcher GartnerGroup.
The communities, which bring together buyers and sellers in the same vertical sector or geographic region, will account for the equivalent of $2.71 trillion worth of transactions or 37 per cent of total sales in the business-to-business ecommerce market by 2004, says Gartner. The researcher predicts that the market will be worth $7.29 trillion by this time.
"The business-to-business explosion is imminent, fuelled by a combustible mixture of investment financing, IT spending and opportunistic euphoria that is being funnelled into startups and brick-and-mortar ecommerce initiatives," said Leah Knight, principal analyst at Gartner.
She describes business-to-business trading communities as emarket makers, and names Chemdex, Verticalnet, Paper Exchange and Commerce One's Marketsite as among the key players.
Such communities provide a central place where companies can trade goods such as raw materials to be made into end products, or items that assist in the running of their businesses such as furniture and travel services, she said.
She believes that brokers, which traditionally brought buyers and sellers together in the paper based world, could end up as casualties in the new world.
"The smartest broker, however, will use these exchanges to quickly identify inventory and kickstart the liquidity [of the buy-sell process]," she said.
Knight predicts that the market is likely to consolidate. "At the beginning of 1990 there were 30 emarkets, now there are 300. They will continue to proliferate because the venture capitalists are chasing them with money, but whether they will all survive remains to be seen," she said.
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