eMarketplaces Are a Booming Business in Europe, IDC Says

COPENHAGEN – FEBRUARY 1, 2001 – European business-to-business (B2B) Internet commerce will increase in value from 61 billion euros in 2000 to over 1.5 trillion euros in 2005, according to new IDC forecasts. eMarketplaces will be responsible for the majority of this growth in the mid to long term.

 

According to IDC, B2B ecommerce will be driven by numerous factors. "Companies wish to optimize the flow of information within the supply chain. The Internet is an excellent platform for this as the infrastructure is there today. The desire to implement ecommerce solutions may also be spurred by business partners that are interested in maintaining an electronic dialogue with their clients and suppliers," said Mikael Arnbjerg, IDC's lead analyst in European B2B and eMarketplace research. However, B2B has to overcome some barriers along the way including security concerns and, in certain industries, a lack of understanding of what the Internet can do. "The discouraging experiences of the dot-com shakeout may still have a negative effect on B2B ecommerce initiatives, although this should not be such a negative correlation," Arnbjerg said.

IDC distinguishes three types of B2B Internet commerce: edistribution, emarketplaces, and eprocurement. eDistribution accounts for the majority of B2B Internet commerce transactions today. Although the volume of goods sold via edistribution is growing, growth will slow over the next few years as buyers and sellers turn to other types of B2B ecommerce models. eMarketplaces are the fastest-growing segment in ecommerce and will continue to grow rapidly over the next five years. The growth of eprocurement is almost as impressive, but eprocurement is mostly interesting for larger companies that will dominate this segment.

From the perspective of novelty business models, emarketplaces will be the most interesting to watch. "eMarketplaces will position themselves through a combination of commerce and other services. In terms of revenue, emarketplaces may opt for a transaction fee-based solution, but this may not work well in all industries. An alternative solution is membership fees. Industry-specific content may help the emarketplace obtain a better position in the quest to become a market leader," Arnbjerg said. Additional services, such as ebusiness consulting, may also develop into a revenue stream for emarketplaces.

European B2B and eMarketplaces 1999-2005 – Forecast and Analysis (IDC #EM01G) presents a sizing and a forecast for the Western European transaction volumes derived from three types of B2B Internet commerce: seller-governed edistribution, community-governed emarketplaces, and buyer-governed eprocurement. In addition to the forecast, the report presents edistribution success factors and discusses the business case of electronic marketplaces including the implications for sellers and buyers. This report identifies the trends in B2B ecommerce and details which countries and segments will become more lucrative over the next couple of years. This report is available to purchase from your local IDC office.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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