RealTime IT News

A Trading Tidal Wave

B2B e-commerce will experience astounding growth over the next five years, rising to $6.3 trillion in 2005 from $336 billion this year, according to a new industry study.

The study's author, Internet research and consulting firm Jupiter Research, predicts that online supply chains will dominate the B2B commerce landscape and advises businesses to be bold about adopting new models for buying and selling.

In fact, online B2B commerce is predicted to swell from three percent to 42 percent of total B2B domestic trade over the next five years.

It's a tidal wave, Jupiter says, and companies that don't invest now will end up struggling to keep their heads above water.

"We expect unified, online supply chains to become the norm, and companies that don't invest aggressively to build or participate will be unable to compete effectively," said John Katsaros, vice president of Jupiter Research.

The study, entitled U.S. Business-to-Business Trade Projections, examines the trading activities of 12 major industries in detail, and concludes that five -- aerospace and defense, chemicals, computer and telecommunications equipment, electronics and motor vehicles and parts -- will conduct more than half their total B2B buying and selling online by 2004.

Perhaps not surprisingly, the Jupiter report found that the computer and telecommunications space will become the largest online B2B market in terms of sales, topping $1 trillion in 2005. Jupiter also predicts that four other industries will top the $500 billion mark by 2005: Food and Beverage; Industrial Equipment and Supplies; Motor Vehicles and Parts; Construction and Real Estate.

While the rates of Internet trading adoption vary across industries, only one of them, agriculture and farming, is not expected to top $100 billion in online trading by 2005, Jupiter said.