B2B set for blast off

But a new survey from internet research company MMXI Europe indicates that business-to-business (B2B) take-up is still at an extremely low level, accounting for a mere 6.6 per cent of all internet transactions.

The survey also shows that B2B websites received a total of 711,000 visits during July 2000, representing 6.6 per cent of ecommerce traffic during the period.

But those involved do not appear disheartened in any way by these rather meagre figures and argue that businesses supplying services to other businesses via the internet is a sector which is on the brink of explosive growth. Some even argue that B2B will become more important than business to consumer (B2C) transactions.

Robin Tye, head of ebusiness consulting with PricewaterhouseCoopers (PwC), said he was not especially surprised at the figures. “B2B is still at a very embryonic stage. However, over the next 18 months to two years the value of transactions will increase dramatically and will soon swamp B2C,” he said.

“B2B concerns will increasingly come to be viewed in the same light as other businesses and not strange entities that require specialist mechanisms of analysis,” he added.

Mike Nicholls, finance director at World of, says he is surprised that the take-up rate for B2B is as low as the survey indicates. He believes that take-up will increase exponentially as the market expands, users become more experienced and strategic alliances are formed. “We are likely to see a dramatic increase in growth during the next few years,” he said.

Rapid future progress
Ted Yates, head of ecommerce at Ernst & Young, believes we are currently at the bottom line of the market, and that future progress will be rapid. “The infrastructure is growing and the initial delivery problems experienced by B2B companies are being overcome. There is no doubt that the B2B market will eventually dwarf the B2C market, though precisely when this will occur is difficult to determine.”

The UK and Germany lead the field in developments in Europe, although both are obviously well behind the USA, he added.

PwC also published a survey at the end of August of over 400 of Europe’s leading companies. The survey targeted both traditional ‘bricks and mortar’ and dotcom companies to identify their key criteria for success.

The survey’s principal finding was that most internet startups are unlikely to achieve long-term success because their owners are opportunists who ignore traditional business principles in the hope of short-term profit.

Bill Bound, European ebusiness consulting partner with PwC, said: “The survey highlights that the failure of the dotcoms to put the customer as number one is clearly a massive issue. Traditional companies’ emphasis on fulfilment is the result of years of experience, whereas the dotcoms believe that strong marketing will persuade customers to log onto a website and order goods that never actually get delivered.”

The reason why many B2B as opposed to B2C companies can and will survive is because they are able to make a profit, Bound added.

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