Shakeout Likely in Europe's BTB Marketplaces

Share this article:
Several recent business-to-business studies indicate that the number of BTB marketplaces on the Internet and the value of goods traded on them will continue to increase, but the number of exchanges likely to survive through 2004 will shrink drastically.


Emarketer, a New York-based e-commerce research firm, said it had counted more than 750 BTB marketplaces worldwide. A German consultant, Mummert + Partner, said 600 were in Europe alone, and Jupiter MMXI said there were 500.


The value of goods traded on the European marketplaces, Jupiter predicted, would rise from the current 200 million euros (about $182 million) to 1.8 billion euros in 2004.


Mummert and Jupiter agreed that the number of exchanges would continue to grow but that a drastic shakeout would follow, reducing the number of viable marketplaces in Europe to about 100.


Jupiter said Web markets that had "the right volume of transactions, industry backing and integration with telephone and customer support" would succeed. Mummert added a fourth: good know-how of its own business.


Few can meet all those criteria, the researchers noted, and even venture capital for new marketplaces flows more sparingly these days.


"Like in the U.S., BTB portals were greeted warmly in Germany," Robert Stein of the 3i venture capital group told the German newspaper Die Welt. "But we've sobered up here and in the U.S. It turned out that margins on which many business models were based were totally unrealistic."


Maybe so. But new ones are sprouting, and old ones -- those at least 12 to 18 months old -- keep adding new members.


Metro Online, a subsidiary of Germany's largest retail chain, has just launched Dayconomy, devoted to gastronomy and the hotel business. It offers help to caterers, butchers, bakers and confectioners.


The construction industry has seen a plethora of new marketplaces go online over the past 18 months, most of them in Germany or with German offices. The German construction industry is troubled and looking for help.


Many companies see the online marketplaces as one way out. MyBau.com, for example, offers help through a "trade and communications platform for planning, building and using buildings and other real estate."


Munich-based Conject.com launched last spring with $4 million in venture capital and plans to bring greater efficiencies to the fragmented construction business.


Eu-supply.com is something of a granddaddy in this business, having launched at the end of 1999. It also claims to be the only Pan-European Web marketplace for the construction industry with offices in half a dozen nations.


Most of the management team is Scandinavian, a common occurrence among dot-com start-ups, given Sweden's leading role in Internet development.


But with half a dozen platforms competing across Germany, a shakeout here also seems inevitable, especially since venture capital has not been flowing as freely.


Nevertheless, the concept has lost none of its attraction for large and small companies. Thus late last month Karstadt-Quelle, Europe's largest non-food retailer and owner of the Quelle mail-order house, joined Global NetXchange.


The San Francisco-based marketplace supports the retail industry and now has eight equity members "representing more than $260 billion in committed purchase volume," a release announcing Quelle's membership said.


"They provide unique apparel and electronic expertise to our network," said GNX CEO Joe Laughlin.


Share this article:
close

Next Article in News

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

News Byte: Comcast Expanding Global Ad Delivery Through Partnership

News Byte: Comcast Expanding Global Ad Delivery Through ...

Through a partnership with Adstream , Comcast's AdDelivery Service expands its footprint across the globe.

40 Under 40 2014: Nominations Are Now Open!

40 Under 40 2014: Nominations Are Now Open!

It's time to nominate the 2014 crop of young marketing luminaries for Direct Marketing News's 40 Under 40 Awards. The deadline is Friday, June 6, 2014.

News Byte: MediaCrossing Partners with ASL Marketing on Youth Marketing Tool

News Byte: MediaCrossing Partners with ASL Marketing on ...

The digital media trading firm and marketing database company aim to help marketers target 13 to 34 year olds.