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Asian B2B E-Commerce Approaches Quarter of World's Total
Business-to-business Internet commerce in the Asian-Pacific region is on pace to reach US$220 billion this year, or 24 percent of the worldwide total, U.S. market researcher Gartner Group predicted Friday.
The region's B2B e-commerce reached US$96.8 billion in 2000, or 22 percent of the world's total. According to Gartner, by 2005, the region will account 28 percent of the worldwide total, with B2B e-commerce transactions of US$2.4 trillion.
Businesses in the region will focus on building private regional marketplaces with familiar partners as a means to reduce exposure to overseas markets impacted by the economic downturns, Gartner said.
Gartner defines B2B Internet commerce as the sales of goods and services for which the order-taking process was completed via the Internet. This includes purchases via Internet electronic data interchange (EDI), e-marketplaces, extranets and other sell-side initiatives, but excludes activity over proprietary networks.
According to Gartner, the first wave of e-marketplace development in Asia-Pacific was pushed by overseas buyers' e- procurement initiatives. The next cycle is characterized by private investment and consortia-funded supplier marketplaces working to shorten manufacturing and delivery time and aggregate total market demand on a global scale.
An earlier report by Boston Consulting Group (BCG) estimated the value of B2B transactions in Asia by 2003 is expected to reach US$430 billion. But BCG said that the prospects for the region's e-marketplaces is far from rosy, predicting that most of the more than 750 horizontal and vertical e-marketplaces that have sprung up in Asia-Pacific over the past year will not survive in the struggle with challenges of implementation.
At greatest risk, according to BCG's report, are Asian companies serving global markets. E-commerce is shifting comparative economics globally, and although Western companies that have embraced B2B e-commerce are already driving down their costs, Asia companies lag in implementation.
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