The up and coming North American B2B e-marketplace market grew 171 percent in
1999, propelled by both “brick-to-click” distributors and established dot-com
marketplaces, says a new study on this Internet business niche.
The report from research and consulting firm Gartner Group Inc.
e-market maker revenue reached nearly an estimated $500 million in 1999, an
increase from 1998 revenue of $183 million.
A B2B e-market maker brings together buyers and sellers within a particular
industry, geographic region or affinity group for the purpose of commerce. It
provides content, value-added services and- often, but not always,
transaction capabilities.
Gartner said that such new business intermediaries are “quickly evolving to a
highly competitive market that includes a variety of players with previously
disparate business
models, including software, portals, distributors, application service
providers (ASPs) and business service providers.”
“Online operations of brick-and-mortar intermediaries like Ingram Micro
dominated the market in 1999,” said Leah Knight, research director for
Gartner’s e-Business Services.
“This evidences the relative ease of migrating an existing customer base to
an online model over building a new customer base from scratch, which many of
the dot-com marketplaces have been struggling to do,” she said. “It also
shows the strength in many industries of the value-added business services
model (for example, providing demand
generation, quality assurance and logistical services) vs. the transaction
fee model. Still, many of the brick-and-mortar intermediaries are facing
challenges themselves due to margin.”
Gartner’s report said that Ingram Micro commanded a dominant
market share of 26.4 percent. Tech Data and Arrow Electronics ranked No. 2 and 3,
respectively, followed by Avnet, Grainger, VerticalNet and Freemarkets. Grainger posted the
strongest growth rate among the top-tier vendors with 633 percent revenue
growth.
Three unique types of marketplaces are energing, Gartner said:
services of commodity or near-commodity status, as well as financial
instruments such as futures contracts
inter-enterprise processes, such as those related to logistics, financial
services, and maintenance, repair and operations (MRO) procurement
process definitions, and to facilitate process-to-process integration between
trading partners
“Through 2005, the competitive landscape will be significantly transformed to
a hub-spoke-Web model of inter-enterprise e-marketplace engagement among the
three marketplace models,” Knight said.
“Marketplaces that try to support all
three models will fail, but marketplaces that focus with rich software and
services environments as required, and a strong base of partners, will
dominate their segments.”
The report was released in advance of a Gartner conference on e-marketplaces
scheduled for Nov. 6 to Nov. 8 in Boston.
