Advertisment

APAC B2B e-commerce to be $1 trillion in 2004: GartnerGroup

author-image
CIOL Bureau
Updated On
New Update

BANGALORE: Business-to-business (B2B) e-commerce in Asia/Pacific (APAC) will grow at a compound average growth rate (CAGR) of 155 per cent through 2004, according to a GartnerGroup report. This will bring in fundamental changes in the way local companies conduct business with the world, it added. The region's B2B e-commerce market is forecast to grow from $9.2 billion in 1999 to $995.8 billion in 2004. By 2004, B2B e-commerce in APAC (outside of Japan) will represent 13.6 per cent of the forecasted $7.3 trillion in total global B2B e-sales transactions.

Advertisment

"As in North America and Europe, the B2B e-business explosion in APAC is being fueled by waves of Internet-centric investment and IT spending focused on operating cost reduction and demand generation for brick and mortars," said Lane Leskela, principal analyst for GartnerGroup's e-Business Services Asia/Pacific. "In Asia/Pacific, B2B e-business marketplaces emerged in response to market retrenchment in the region's manufacturing and trade sectors during the 1997-98 recession."

The report said that over the next five years, e-market makers would be a primary driver of e-business transformation in the region. In APAC, e-market makers are projected to account for $581 billion in non-financial electronic sales transactions in 2004, representing 29 per cent of the overall value of the B2B e-commerce market in the region.

GartnerGroup defines "e-market makers" as organizations that develop Internet-based business-to-business e-marketplaces composed of buyers and sellers within a particular industry, geographic region or affinity group. Key e-market makers in APAC include Advanced Manufacturing Online (AMO), Global Sources, Ariba, SESAMi.net, bex.com and iSteelAsia.com, said a release from GartnerGroup.

Advertisment

GartnerGroup analysts observe that e-market makers in the region are creating new opportunities to develop spot markets for near commodity products, as well as products and services for which the search, selection and purchase costs are significant, particularly for the region's vast small business sector. GartnerGroup anticipates the critical but gradual impact of e-market makers on transactions that flow through brick and mortars' sell-side e-commerce initiatives in the region.

"Sell-side initiatives in the region – including extranets and B2B Web storefronts that allow local sellers to leverage the expanding IP network as an efficient channel to buyers throughout the world - are rising dramatically," Mr Leskela said. "Moreover, e-market makers in Asia/Pacific are direct targets for increased investment from commercialbanks and venture capital funds expanding their e-business portfolios from the narrow focus on higher-risk dot.com startups seen to date."

B2B e-commerce in Asia/Pacific is set for explosive growth as e-sales transactions are projected to reach $29.9 billion in 2000, followed by $93.4 billion in 2001. In 2002, the region's market will increase to $258.5 billion, and, at the end of 2003, Asia/Pacific B2B e-commerce revenue is forecast to reach $510.7 billion.

tech-news