TMR - B2B Exchanges Show Signs of Rapid Growth

Posted July 6, 2000

Manufacturing News

B2B Exchanges Show Signs of Rapid Growth

Real-time business-to-business auctions and exchanges are growing at an astounding clip, according to Forrester Research (www.forrester.com). The worth of goods exchanged over new Internet-based marketplaces is projected to hit $746 billion by 2004. "As e-marketplaces evolve, firms will move beyond today's simple ad hoc purchases toward configuring online markets for each transaction — trading across product attributes and giving special attention to preferred partners," the research company said.
So-called "dynamic" pricing will grow by 25 times over the next five years, and the marketplaces will adopt new features including the automated matching of bids and integration into companies' back-end business systems.
Forrester Research expects a new kind of trading environment will emerge from the surge of B2B exchanges. With such attributes as on-demand trading, contingent deal making and partner preferencing, firms will tailor every interaction with suppliers.
Consulting firm Harris Interactive (www.harrisblackintl.com) also expects rapid growth of the exchanges. "Buyers, suppliers and distributors in the $1 trillion industrial supply industry are likely to almost double their use of the Internet to conduct commerce transactions within the next 12 months," said Harris.
Currently, 34 percent of all industrial trading partners are incorporating e-commerce into their operations. By the end of next year, 67 percent will have incorporated Internet buying and selling, and in five years 83 percent will be using the technique. Speed, convenience and the ability to make price and product comparisons online are driving the Internet's use in industrial markets.

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