B2B Internet Trading Platforms - EDIS

1.2.2. From B2B e-marketplaces to new forms of Internet trading platforms
B2B e-marketplaces were seen as a tool for achieving the cost savings, efficiency enhancements and
additional sales, as described above. Thus, an increasing share of B2B e-commerce was expected to
move to B2B e-marketplaces, providing buyers and sellers with efficient price-finding mechanisms
like auctions or exchanges, settling the ordering, billing and payment and even providing additional
services like trust functions or logistics support. In this period of hype, however three significant
matters were overlooked.
– Firstly, e-commerce itself was expected to form a much higher proportion of total sales than
it has so far done. Consequently, also the forecasts for the further development of e-
marketplaces have proved to be overoptimistic, resulting subsequently in disappointment and
pessimism. A more realistic approach would have helped to avoid later frustration, calling
for more neutral and unbiased economic analysis in the field of e-business.
– Secondly, many analysts did not sufficiently take into account that, for a transaction to
effectively take place – off-line or on-line, via e-marketplaces or other on-line tools –
supplier, customer and any intermediary must add value and be able to realise value from the
transaction. Put simply, too many suppliers and intermediaries have been technology--
oriented rather than business-oriented as though the mere fact that a trading opportunity
existed on-line made it worth while for potential parties to undertake it.
– Thirdly, from the point of view of companies wanting to conduct e-commerce, the world
looks sometimes different than from an analyst’s perspective. For enterprises, independent e-
marketplaces are only one option among many. They can, for example:
– buy on a supplier’s web site,
– interconnect with suppliers or buyers directly (e.g. using EDI or any new Internet
standard),
– sell on a proprietary e-marketplace or on their own web site using Internet portals to
gain attention, and
– negotiate with suppliers and buyers off-line sometimes based on initial on-line contact.
The last point is of particular importance. As the list of different options shows, many solutions exist
to buy and sell over the Internet. E-marketplaces may be the best option for one company to conduct
on-line B2B transactions, but for others different routes may be more beneficial. Reducing processing
costs for buying office supplies, for example, can be achieved by connecting the company to a
Maintenance Repair and Operation (MRO) e-marketplace as well as by connecting it to its preferred
supplier for office supplies. Likewise, new business can be acquired either by looking for Request for
Quotes (RFQ) on B2B e-marketplaces or simply by listing the company’s major offerings on a wellknown
Internet portal. Which of these options provides the most value to the company depends on the
company’s specific circumstances. 4
A company, for example, that wants to auction surplus goods can use a specialised independent e-
marketplace, where its auction is placed among several others, or it can buy an auction-engine
software to offer the auctions on its own enterprise portal. Which option is better depends on a number
of considerations. The costs for the installing the software vs. the costs for using the platform services
4
A recent survey of Dutch exporters showed, for example, that 61 % of those having a web site state that
it has helped them to find new customers. Only one third have made new contacts using marketplaces,
though. This seems to imply that having a web site is more likely to attract new customers. Cf.
Netherlands Foreign Trade Agency: Survey – Dutch Exporters, E-Business and E-Marketplaces, Press
Release from March 19, 2002.
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