Volumes Up for Online Marketplaces

Rumors of the death of the e-marketplace greatly exaggerated, studies show

Tempe, AZ  December 11, 2001  e-Marketplace transactional and sales volumes continue to increase at a brisk pace, according to two recent studies.

A recently released survey by the Global Trading Web Association (GTWA), a trade association for online marketplaces, and a study by technology consultancy Aberdeen Group both show e-marketplace activity continuing to increase despite the much-heralded downturn in the tech sector.

The GWTA survey showed that transaction volume on the 31 association members' e-marketplaces increased from about 106,000 for the January-June 2000 period to about 884,000 for the same period this year. Projected 2001 year-end transactions are expected to reach 2,140,500.

Sales volume reported rose from $115 million during the first two quarters in 2000 to $3.7 billion for the same period in 2001. Projected 2001 year-end sales volume is expected to reach $6.2 billion.

In addition, the number of stock-keeping units (SKUs) offered on the members' e-marketplaces increased from 4.3 million to 17.1 million from June 2000 to June 2001.

Meanwhile, Aberdeen reported that transactions at 10 Net marketplaces studied are increasing in volume at a monthly rate of 36 percent.

The Aberdeen report, "What Works: Best Practices That Drive Net Market Viability," profiled Covisint, CheMatch, FreeMarkets, Financial Oxygen, Logistics.com, Neoforma, Pantellos, Pure Markets, TradeMC and Transora.

Commenting on the GWTA study, Gale Daikoku, an analyst with technology consultancy Gartner G2, said: "E-marketplaces are not dead. Our on-going research continues to debunk that myth."

Daikoku said that e-marketplaces facilitated non-financial sales transactions of $140.8 billion in 2000 at a time when most e-marketplaces were just ramping up. Gartner expects that e-marketplaces will become an integral B2B trade mechanism for thousands of companies worldwide by 2005.

The GTWA is an independent, non-profit industry membership organization that promotes the role of B2B e-commerce. GTWA members provide electronic trading services for more than 250,000 companies in over 100 countries.

In announcing the results of the GTWA survey, association Chairman Sandy Kemper, founder and CEO of eScout, said that the data represent a composite of activity among GTWA members. "While we are extremely pleased with the accelerated rate of growth, we are not surprised," Kemper said. "Our members believe that global electronic trade will continue to thrive as the supply chains reach farther, people demand direct purchasing, businesses throughout the world seek markets to distribute their products and increasingly want access to everything the world has to offer."