Forget B2C, B2B is the real driver of eCommerce in Europe, IDC says

LONDON — According to recent research from IDC, business-to-business (B2B) ecommerce is proving to be the real driver of ecommerce in Europe. All forecasts have indicated that business-to-business will become much larger in terms of online revenue, but for a long time, the main focus has been on business-to-consumer (B2C) ecommerce. Last year, three quarters of all Western European Internet commerce revenue came from B2B; however, this will increase to 87% by 2003, representing over 400 billion euros.

"Of the variety of types of B2B business models — EDI, extranets, eprocurement, emarketplaces, etailers — extranets currently carry the bulk of ecommerce today," said Mikael Arnbjerg, program manager of IDC's European Internet and eCommerce Strategies service. "However, emarketplaces, the headline grabbing dot.coms of B2B, will eventually take the lead position as a number of them manage to establish themselves as de facto marketplaces in specific industries."

Despite the distinction between the various types of business models, it is important that sellers do not think purely in terms of one type of ecommerce.

"In the future, it will be crucial that vendors are able to sell through many of these channels, a practice that IDC believes will become commonplace with time," Arnbjerg added.

Key B2B eCommerce Challenges

Based upon the input obtained from speaking to early adopters of B2B ecommerce, IDC has identified the following main challenges facing companies in the move to ecommerce:

* Technology — Companies from outside of the ICT spectrum reported difficulties in getting things to work, for example, integrating back-end systems with the Web storefront.

* Human resources — Once again, the skills shortage affects the companies in their shift toward ecommerce. eMarketplaces also need to employ people that possess insights into the industry they intend to target.

* Organization — Implementing ecommerce strategies necessitates organizational change. All departments that are likely to be affected by this change must be involved in the implementation that should be backed up by the support of the management.

* Relationship — A company that implements ecommerce will find that its relations with the outside world will change as a result. The design of the ecommerce solution, therefore, should take into account the requirements of partners.

The First Generation: Business-to-Business Internet Commerce in Europe (IDC #I01G) presents a number of business models (extranets, eprocurement, emarketplaces) that have come to represent how organizations conduct transactions via the Internet. In addition, this study presents the ecommerce experiences of the following six companies that are among the early adopters of Internet-based ecommerce in Europe: BuildOnline, Cisco, Ericsson GSM Systems, FOL Agriculture, SCA Forest and Timber and Steelscreen. This report is available to purchase from your local IDC office.

The European IT Forum

eEurope: Will Europe Leapfrog the U.S. in eBusiness?

Richard Villars, vice president of IDC's Internet and eCommerce Strategies program, will be presenting on business-to business eCommerce at IDC's European IT Forum. This prestigious event, now in its tenth year, takes place at the Grimaldi Forum in Monaco on September 11-13, 2000. For further details, or to register, see http://emea.idc.com/forum/forum2000.

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 500 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.