Evangelists of the internet -and there are still many - have brushedaside fears over the recent collapse of many big-name consumer dot.comsclaiming web businesses do have a real future, but that it lies in thebusiness to business market - or B2B, as it is known in e-businessspeak.
But a new survey from internet research company MMXI Europe indicates B2Btake-up is still at an extremely low level, accounting for a mere 6.6% ofall internet transactions.
The survey also shows B2B websites received a total of 711,000 visitsduring July, representing 6.6% of e-commerce traffic during theperiod.
But those involved do not appear disheartened in any way by these rathermeagre figures and argue that businesses supplying services to otherbusinesses via the internet is a sector which is on the brink of explosivegrowth. Some argue B2B will become more important than the business toconsumer sites – or B2C, as they are known in e-business speak.
Robin Tye, head of e-business consulting with PricewaterhouseCoopers, saidhe was not especially surprised at the figures. ‘B2B is still at a veryembryonic stage. However, over the next 18 months to two years the valueof transactions will increase dramatically and will soon swamp B2C,’ hesays.
‘B2B concerns will increasingly come to be viewed in the same light asother businesses and not strange entities that require specialistmechanisms of analysis, he adds.
Mike Nicholls, FD with World of Training.com, says he is surprised thatthe take-up rate for B2B is as low as the survey indicates. He believestake-up will increase exponentially as the market expands, users becomemore experienced and strategic alliances are formed. ‘We are likely to seea dramatic increase in growth during the next few years,’ he says.
Ted Yates, head of e-commerce with Ernst & Young, believes we arecurrently at the bottom line of the market, and future progress will berapid.
‘The infrastructure is growing and the initial delivery problemsexperienced by B2B companies are being overcome,’ he says.
‘There is no doubt the B2B market will eventually dwarf the B2C market,though precisely when this will occur is difficult to determine.’ The UKand Germany lead the field in developments in Europe, though both areobviously well behind the USA, he said.
PwC also published a survey at the end of August of over 400 of Europe’sleading companies. The survey targeted both traditional ‘bricks andmortar’ companies and dot.com companies to identify their key criteria forsuccess.
The survey’s principal finding is that most internet start-ups areunlikely to achieve long-term success because their owners areopportunists who ignore traditional business principles in the hope ofshort-term profit.
Bill Bound, the European e-business consulting partner with PwC, says:’The survey highlights that the failure of the dot.coms to put thecustomer as number one is clearly a massive issue.
Traditional companies’ emphasis on fulfilment is the result of years ofexperience, whereas the dot.coms believe that strong marketing willpersuade customers to log onto a website and order goods that neveractually get delivered.’
The reason why many B2B as opposed to B2C companies can and will surviveis because they are able to make a profit, Bound added.