GartnerGroup Forecasts Asia/Pacific Business-to-Business E-Commerce to Reach $1 Trillion in 2004; E-Market Makers Will Be Key Drivers in Region

Business Wire, Feb 17, 2000

Business Editors/High-Tech Writers

SINGAPORE--(BUSINESS WIRE)--Feb. 17, 2000

Business-to-business (B2B) e-commerce in Asia/Pacific will grow at a compound average growth rate (CAGR) of 155 percent through 2004, causing fundamental changes to the way local companies conduct business with the world, according to Gartner Group, Inc. (NYSE:IT).

The region's B2B e-commerce market is forecast to grow from $9.2 billion in 1999 to $995.8 billion in 2004. By 2004, B2B e-commerce in Asia/Pacific (outside of Japan) will represent 13.6 percent of the forecasted $7.3 trillion in total global B2B e-sales transactions.

&uot;As in North America and Europe, the B2B e-business explosion in Asia/Pacific is being fueled by waves of Internet-centric investment and IT spending focused on operating cost reduction and demand generation for brick and mortars,&uot; said Lane Leskela, principal analyst for GartnerGroup's e-Business Services Asia/Pacific. &uot;In Asia/Pacific, B2B e-business marketplaces emerged in response to market retrenchment in the region's manufacturing and trade sectors during the 1997-98 recession.&uot;

Over the next five years, e-market makers will be a primary driver of e-business transformation in the region. In Asia/Pacific, e-market makers are projected to account for $581 billion in nonfinancial electronic sales transactions in 2004, representing 29 percent of the overall value of the B2B e-commerce market in the region. GartnerGroup defines &uot;e-market makers&uot; as organizations that develop Internet-based business-to-business e-marketplaces composed of buyers and sellers within a particular industry, geographic region or affinity group. Key e-market makers in Asia/Pacific include Advanced Manufacturing Online (AMO), Global Sources, Ariba, SESAMi.net, bex.com and iSteelAsia.com.

GartnerGroup analysts observe that e-market makers in the region are creating new opportunities to develop spot markets for near commodity products, as well as products and services for which the search, selection and purchase costs are significant, particularly for the region's vast small business sector. GartnerGroup anticipates the critical but gradual impact of e-market makers on transactions that flow through brick and mortars' sell-side e-commerce initiatives in the region.

&uot;Sell-side initiatives in the region -- including extranets and B2B Web storefronts that allow local sellers to leverage the expanding IP network as an efficient channel to buyers throughout the world -- are rising dramatically,&uot; Leskela said. &uot;Moreover, e-market makers in Asia/Pacific are direct targets for increased investment from commercial banks and venture capital funds expanding their e-business portfolios from the narrow focus on higher-risk dot.com startups seen to date.&uot;

B2B e-commerce in Asia/Pacific is set for explosive growth as e-sales transactions are projected to reach $29.9 billion in 2000, followed by $93.4 billion in 2001. In 2002, the region's market will increase to $258.5 billion, and, at the end of 2003, Asia/Pacific B2B e-commerce revenue is forecast to reach $510.7 billion.

GartnerGroup analysts will provide additional analysis on the e-business market during the iEC 2000 conference February 29 to March 2 at the Jacob K. Javits Convention Center in New York. At iEC 2000, business leaders will convene to learn winning electronic commerce business strategies and solutions. Additional information on the conference is available at http://www.iec-expo.com. More information on GartnerGroup's Electronic Commerce Conference at the iEC conference is available at http://www.tsnn.com/iecexpo/programlist_01.html.> The impact of e-market makers and the evolving business models surrounding the multitrillion dollar B2B e-commerce market will be explored in an ongoing basis in GartnerGroup's new suite of B2B e-Market Makers advisory services. These programs provide research and analysis on B2B e-commerce in Asia/Pacific, Europe and throughout the world. For more information on these programs, please call 800/419-DATA or 408/468-8009.

These programs are part of a wide range of GartnerGroup e-Business Services examining the e-business industry. These programs are designed to help senior executives, strategic planners and investors capitalize on emerging opportunities by providing research and analysis on electronic commerce and Internet marketplaces. Additional information on these programs is available on GartnerGroup's Web site http://www.gartner.com/public/static/home/ggebiz.html.> About GartnerGroup

GartnerGroup, the world's premier business technology advisor, was founded in 1979 and is headquartered in Stamford, Connecticut. GartnerGroup provides unrivaled thought leadership for more than 9,600 client organizations worldwide. It achieved 1999 revenue of $734 million and has 80 locations worldwide. GartnerGroup's 3,400 associates, including 1,200 research analysts and consultants, help clients achieve their business objectives through the intelligent and efficient use of technology. For more information about GartnerGroup's industry-leading research capabilities, services and events, visit us on the Web at http://www.gartner.com.