IDC Predicts a Boom, Not Gloom for Asia's B2B eCommerce Markets

Apr 23, 2001, 01:00 ET from IDC

    SINGAPORE, April 23 /PRNewswire/ -- The Asia/Pacific (A/P) business-to-
 business (B2B) market is expected to grow at an unprecedented rate over the
 next five years. Business purchases over the Internet in A/P will catapult by
 more than US$500 billion by 2005, according to IDC.
     IDC's report, Asia/Pacific B2B eCommerce Forecast: Cringing Markets,
 Hidden Value, indicates that corporations in that region, excluding Japan,
 will purchase over US$516 billion of direct and indirect materials through the
 Internet by 2005. This represents greater than a 3,900% increase over the
 US$12.8 billion spent in 2000.
     Compared with the United States, the A/P B2B market reveals a much higher
 compound annual growth rate (CAGR) of 109%. The U.S. B2B market, while
 forecasted to rise from $117 billion to $1.6 trillion in 2005, has a CAGR of
 just 68%. A/P's share of the worldwide B2B ecommerce market will also
 experience a dramatic shift, from a mere 5% in 2000 to 12% in 2005. U.S. share
 will decline from 41% to 36%.
     Richard Jacobson, B2B Internet research manager at IDC Asia/Pacific, cites
 traditional brick-and-mortar companies as the drivers of this B2B trend in
 A/P. "Asia's largest conglomerates are already investing in B2B solutions,
 which are radically changing the structure of many industries. Despite these
 changes, however, these so-called old economy companies are discovering that
 old rules still apply in the new economy. The biggest driver of B2B adoption
 is the lowering of administrative costs for buying and selling activities,"
 Jacobson said.
     At the same time, information technology firms need to be cognizant of
 this growing opportunity rather than dwelling on the losses that have
 surrounded the Internet. According to Jacobson, strong growth in the migration
 of traditional businesses onto Internet-based platforms will result in
 significant opportunities for these companies. "Technology providers who
 ignore this market potential because of the gloomy picture painted by various
 merchants of doom could end up missing the boat," he said.
     IDC's report also reveals a stark contrast between Internet-related stock
 market sentiments in A/P compared with B2B ecommerce revenue forecasts.
 "Amidst a backdrop of sidelined investors and cautious venture capital funds,
 here we have the B2B ecommerce market poised to grow at a tremendous rate,"
 Jacobson said. "Investors who are cringing away from Internet-related markets
 should be seeing the tremendous potential in the B2B ecommerce market."
     Strong manufacturing and export-oriented economies in A/P are also cited
 as key accelerators of B2B adoption. Increased competition, due in large part
 to the deregulation of Asian industries, will spur companies to innovate to
 survive. "Many will see the benefits of B2B as vital for acquiring or
 maintaining a competitive advantage," Jacobson said. "Those who don't will run
 the risk of becoming obsolete as globalization levels the playing field."
     IDC believes businesses must overcome many challenges before mainstream
 implementation of B2B can take place, including concerns about security, a
 lack of awareness of B2B business benefits, and a general resistance to
 change. This latter point is apparent most particularly in countries where
 businesses are built on a strong foundation of relationships.
     To learn more about IDC's A/P B2B Internet research or to speak with
 Richard Jacobson, manager of IDC's B2B Internet research in Singapore, contact
 Paul Edwards at 416-369-0033 ext. 245. Richard Jacobson can be reached
 directly by email at rjacobson@idcap.com. To purchase IDC's Asia/Pacific B2B
 Forecast: Cringing Markets, Hidden Value, please contact Cheryl Toffel at 508-
 935-4389 or by e-mail at ctoffel@idc.com.
 
     About IDC
     IDC is the foremost global market intelligence and advisory firm helping
 clients gain insight into technology and ebusiness trends to develop sound
 business strategies. Using a combination of rigorous primary research, in-
 depth analysis, and client interaction, IDC forecasts worldwide markets and
 trends to deliver dependable service and client advice. More than 700 analysts
 in 43 countries provide global research with local content. IDC's customers
 comprise the world's leading IT suppliers, IT organizations, ebusiness
 companies, and the financial community. Additional information can be found at
 www.idc.com.
 
     IDC is a division of IDG, the world's leading IT media, research and
 exposition company.
 
     All product and company names may be trademarks or registered trademarks
 of their respective holders.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X16393647
 
 

SOURCE IDC
    SINGAPORE, April 23 /PRNewswire/ -- The Asia/Pacific (A/P) business-to-
 business (B2B) market is expected to grow at an unprecedented rate over the
 next five years. Business purchases over the Internet in A/P will catapult by
 more than US$500 billion by 2005, according to IDC.
     IDC's report, Asia/Pacific B2B eCommerce Forecast: Cringing Markets,
 Hidden Value, indicates that corporations in that region, excluding Japan,
 will purchase over US$516 billion of direct and indirect materials through the
 Internet by 2005. This represents greater than a 3,900% increase over the
 US$12.8 billion spent in 2000.
     Compared with the United States, the A/P B2B market reveals a much higher
 compound annual growth rate (CAGR) of 109%. The U.S. B2B market, while
 forecasted to rise from $117 billion to $1.6 trillion in 2005, has a CAGR of
 just 68%. A/P's share of the worldwide B2B ecommerce market will also
 experience a dramatic shift, from a mere 5% in 2000 to 12% in 2005. U.S. share
 will decline from 41% to 36%.
     Richard Jacobson, B2B Internet research manager at IDC Asia/Pacific, cites
 traditional brick-and-mortar companies as the drivers of this B2B trend in
 A/P. "Asia's largest conglomerates are already investing in B2B solutions,
 which are radically changing the structure of many industries. Despite these
 changes, however, these so-called old economy companies are discovering that
 old rules still apply in the new economy. The biggest driver of B2B adoption
 is the lowering of administrative costs for buying and selling activities,"
 Jacobson said.
     At the same time, information technology firms need to be cognizant of
 this growing opportunity rather than dwelling on the losses that have
 surrounded the Internet. According to Jacobson, strong growth in the migration
 of traditional businesses onto Internet-based platforms will result in
 significant opportunities for these companies. "Technology providers who
 ignore this market potential because of the gloomy picture painted by various
 merchants of doom could end up missing the boat," he said.
     IDC's report also reveals a stark contrast between Internet-related stock
 market sentiments in A/P compared with B2B ecommerce revenue forecasts.
 "Amidst a backdrop of sidelined investors and cautious venture capital funds,
 here we have the B2B ecommerce market poised to grow at a tremendous rate,"
 Jacobson said. "Investors who are cringing away from Internet-related markets
 should be seeing the tremendous potential in the B2B ecommerce market."
     Strong manufacturing and export-oriented economies in A/P are also cited
 as key accelerators of B2B adoption. Increased competition, due in large part
 to the deregulation of Asian industries, will spur companies to innovate to
 survive. "Many will see the benefits of B2B as vital for acquiring or
 maintaining a competitive advantage," Jacobson said. "Those who don't will run
 the risk of becoming obsolete as globalization levels the playing field."
     IDC believes businesses must overcome many challenges before mainstream
 implementation of B2B can take place, including concerns about security, a
 lack of awareness of B2B business benefits, and a general resistance to
 change. This latter point is apparent most particularly in countries where
 businesses are built on a strong foundation of relationships.
     To learn more about IDC's A/P B2B Internet research or to speak with
 Richard Jacobson, manager of IDC's B2B Internet research in Singapore, contact
 Paul Edwards at 416-369-0033 ext. 245. Richard Jacobson can be reached
 directly by email at rjacobson@idcap.com. To purchase IDC's Asia/Pacific B2B
 Forecast: Cringing Markets, Hidden Value, please contact Cheryl Toffel at 508-
 935-4389 or by e-mail at ctoffel@idc.com.
 
     About IDC
     IDC is the foremost global market intelligence and advisory firm helping
 clients gain insight into technology and ebusiness trends to develop sound
 business strategies. Using a combination of rigorous primary research, in-
 depth analysis, and client interaction, IDC forecasts worldwide markets and
 trends to deliver dependable service and client advice. More than 700 analysts
 in 43 countries provide global research with local content. IDC's customers
 comprise the world's leading IT suppliers, IT organizations, ebusiness
 companies, and the financial community. Additional information can be found at
 www.idc.com.
 
     IDC is a division of IDG, the world's leading IT media, research and
 exposition company.
 
     All product and company names may be trademarks or registered trademarks
 of their respective holders.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X16393647
 
 SOURCE  IDC

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