CAPE TOWN, SOUTH AFRICA — European B2B is not living up to its erstwhile promise and will only get going by 2003, noted research company Gartner.
A year ago European e-marketplaces looked as if they were well on their way to competing with more traditional forms of doing business but they haven’t lived up to once-rosy forecasts. “Expectations were set too high and there was a lot of hype – large companies jumped on the bandwagon and made announcements that didn’t materialize when they realized it couldn’t be done in a day,” stated Petra Gartzen, a Gartner analyst.
Gartner initially predicted that 2000 would signal European B2B’s coming of age but the $72 billion spent by Euro companies on online B2B transactions last year amounted to less than 1 percent of the total value of such transactions on the continent.
Shares of e-commerce software makers have sagged dramatically in recent months and the expected growth didn’t materialize. Infobank International, a UK-based B2B software provider, lost 98 percent of its share value during 2000 whilst other investor-picked collaborative software purveyors like Exact Holding lost more than two-thirds of their value during last year’s e-slump. Just2Clicks.com, whose sites facilitate e-commerce for power utilities and other industries, recently announced that it was considering dropping out of the game altogether.
Despite the slouch, Gartner analysts predict pervasive growth in the long-term for the survivors and remain upbeat about European business-to-business during the course of 2001. As such, it expects the value of B2B transactions to rise 159 percent this year and to total 6 percent of Europe’s total business transactions by 2005.
The real impact will only be felt from 2003 onwards when larger companies have finally gotten their slow and wary e-projects off the ground, predicts Gartner, adding a cautionary note for pure-plays. “Pure dot-coms will find it very hard in this business,” concluded Gartzen.