Editor’s Introduction 4(4)

Vladimir Zwass
International Journal of Electronic Commerce,
Volume 4, Number 4, Summer 2000, pp. 3.

Abstract: The business-to-business (B2B) segment dominates present electronic commerce and forecasts for the foreseeable future or, at any rate, for the future subjected to forecasts. Roughly corresponding to the ratio in the brick-and-mortar world, B2B e-commerce surpasses by a factor of about ten the consumer-oriented segment. Numbers also tell us, popular impressions notwithstanding, that much of this activity is traditional, private-network commerce. At present, B2B e-commerce based on Electronic Data Interchange (EDI) over private networks still dwarfs Internet-based e-commerce. Thus, the revenues from Internet-based B2B e-commerce in the United States in 1998 are estimated at $92 billion, as compared to the estimate of $671 billion with the inclusion of private-network EDI, according to the Boston Consulting Group. The Group forecasts U.S. revenues in 2003 at $2 trillion, going up to $2.8 trillion when private-network EDI is included. The 1999 B2B estimates of U.S. Internet-based e-commerce range from $109 billion (Forrester Research) to $155 billion (Goldman Sachs), with an outlying estimate by IDC of $50 billion.

The conversion to e-commerce in the B2B sector is characterized by relatively rapid deployment, buttressed by the availability of infrastructure systems and services from growing integrators and software suppliers. The infrastructure enables multimodal market relationships. These range from variously designed pure markets, such as auction marketplaces that alone account for a great variety of customizable mechanisms, to a set of relatively stable and optimized relationships with a limited number of certified suppliers. It is very difficult, if not impossible, to separate the B2B segment from the intraorganizational e-commerce that supports it. Therefore, the preceding revenue estimates, extrapolated from interviews with industry executives, probably do not reflect the magnitude of the change taking place in the corporate sector.

One macroeconomic effect of the move to e-commerce in the United States is perceived to be the low rate of inflation, even in the presence of an extremely tight labor market and with the high prices of key resources like oil. Highly competitive bidding, more efficient supply chains, and global growth of effective marketplaces, combined with economies of scale in resource and knowledge deployment as firms concentrate on their core competencies, are some of the underlying reasons. With the world’s leading carmakers, General Motors, Ford, and DaimlerChrysler, planning to spend $200 million in order to set up an on-line parts-acquisition marketplace that would yield savings of about 10 percent on the $250 billion worth of parts they purchase annually, the payoff from B2B e-commerce comes sharply into focus.

The consequent changes in the structure of marketplaces, of supply chains, and of the merging of supply networks are profound and multifaceted. The Special Section that opens the present issue studies several structural aspects of these transformations. The guest editors of the section, Theodore H.K. Clark and Robert J. Kauffman, position the articles for you in their own analytical introduction. The papers study the dynamics of the new intermediation and the emerging new forms of supply-chain management.

In the final account, of course, consumer-oriented e-commerce pulls the supply chains. It also attracts increasingly more sophisticated analyses. Here, Alfredo Vellido, Paulo Lisboa, and Karon Meehan go beyond the predominantly qualitative studies of the purchasing behavior of on-line consumers and propose a quantitative method of gauging the propensity of Web users to buy on-line. The new approach to consumer-market analysis offered in the article is certain to be of interest to marketing practitioners and to researchers who will take it as a point of departure for broader quantitative work.

In the concluding paper of the issue, Thompson Teo and Bee Lian Too investigate the relationship between the strategic posture of a firm and its use of the Internet. They find the strategic grid to be a useful tool in deriving their research model. The results indicate the benefit of a holistic approach to corporate Internet strategy, involving the business-to-business, intraorganizational, and consumer-oriented initiatives. In particular, customer responsiveness emerges once again as the key performance factor.