Developers told: focus on long term to survive

14 December 2000
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14 December 2000

Marketplace developers must focus on long-term benefits to buyers and not short-term quantitative benefits to ensure its sustainability, according to a report from management consultants McKinsey and CAPS Research.

More than half the marketplaces focus on only the short-term benefits, the report noted.

There was often disagreement on what a marketplace should deliver, leaving sellers, buyers, and business-to-business marketplace developers disappointed.

The survey of 51 marketplace executives in 12 industries found that buyers trading online saw price reductions as the main imperative, but for sellers, the main driver was a wish to collaborate on design.

Developers saw information sharing as the largest benefit, said the report. It also suggested that buyers adopt a "portfolio" approach, mixing marketplaces with traditional relationships.

• For more details, contact McKinsey on 020 7961 5294.

SMdec2000

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