A survey on the future of B2B exchanges, conducted by professional services firm Ernst & Young LLP at The Standard`s IB2B Chicago 2000 conference, suggests that nearly 50% of executives involved in B2B exchanges feel that the trend towards consolidation within e-marketplaces will continue. Further, 60% feel that by 2004 there will be fewer than 500 exchanges, while 34% predict that there will be fewer than 100. Of those exchanges remaining in 2004, 72% felt that less than 100 would be publicly traded.
Respondents also report the issue of collusion within exchanges will continue to be an important topic. Over 70% of respondents polled felt that collusion is indeed a legitimate concern for the Federal Trade Commission, with nearly 68% believing that some type of independent third-party verification of neutrality would be the best way to protect the public from any risk. 24% thought that some type of government regulation was needed.
Ernst & Young randomly polled attendees regarding their view of the future of B2B marketplaces as well as specific issues relating to the success of these markets.
Respondents also felt that key factors that will determine what will make one exchange succeed over another within the same industry is its critical mass (40%) as well as any other value-added services they may offer members and users (40%).
Respondents also reported that the best way to attract participants to an exchange is to offer participants value-added services (70%) or some type of rebate or commission. In a related issue regarding the growth of B2B markets in the next year, 54% of respondents feel that building critical mass will be key, while 23% of respondents believe that comfort with Internet trading will spread across the economy.
"I think these findings are indicative of the way B2B markets as a whole are developing regardless of their specific industries," said Danny Hayes, National Director of eMarket Solutions at Ernst & Young. "B2B exchanges aren`t going away and as more are formed and others combine, issues such as value differentiation and the FTC`s concerns over collusion are going to remain," continued Mr. Hayes.
Other findings include:
37% of respondents feel that qualifying exchange participants to certify the digital identity, creditworthiness, and overall trustworthiness of trading partners will be critical to overcome in order for B2B exchanges to be successful
Over 84% of respondents feel that in order to achieve a competitive advantage within a marketplace, the best B2B models will deal with the value proposition as well as issues of supply chain management.
37% of respondents reported that partnering and alliance opportunities are the most compelling aspect of B2B exchanges (22% felt it was potential cost reductions while only 4% thought it was future IPO opportunities).
54% of respondents felt that building critical mass will be key for exchanges one year from now.
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For more information on B2B issues in South Africa contact Grant Brewer of Ernst & Young on (011) 498 1000