Bucking the Trend?

Report: Companies trading more online, despite economic downturn

New York  June 28, 2001  Many businesses have begun to increase their online trading activity substantially, despite the slowdown in the U.S. economy, according to a new report from e-commerce research firm eMarketer.

Direct purchasing via supplier Web sites is leading the way, while consortia-led exchanges and private marketplaces are still under development, the research firm said in its latest B2B Report.

With North America presently accounting for 71 percent of online trade, eMarketer estimates that worldwide B2B e-commerce will reach $2.7 trillion by 2004. Other regions of the world are expected to rapidly catch up to North America, with online B2B e-commerce expected to surpass $797 billion in Europe and $300 billion in Asia within the next three years.

"Several companies are now announcing the results of their early e-business efforts," said Steve Butler, senior analyst at eMarketer. "For example, IBM has done more than $43 billion in electronic procurement during 2000, while Boeing is now processing more than 20,000 daily transactions via its Web site."

eMarketer reports that global companies, such as Ford, General Electric and Eastman Chemical have begun to stimulate e-commerce adoption in several countries in which they do business. Such private and public exchange initiatives as GE's SupplyNet or the auto industry's Covisint will see increased activity in the coming months, as companies build upon their e-business foundations, the researchers predict.

"Although the bubble has burst for many independent B2B exchanges," explains Butler, "the majority of large enterprises continue to see e-business as a long-term strategy, and they are already moving into the next-generation of their e-business implementations."

The report aggregates statistics and information from a number of research firms, government agencies and other sources. Some of these findings included:

  • 81 percent of businesses are buying online directly from suppliers' Web sites, while 35 percent are purchasing via public exchanges

  • 41 percent of survey respondents to a study by AMR Research said their company has plans to join a public exchange, while 16 percent are already participating in one 

  • 78 percent of professional buyers in the United States have done some online buying in 2001