Private e-marketplaces set for massive trading growth

17 October 2001
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18 October 2001 | Robin Parker

Transactions on private e-marketplaces are set to grow by more than 50 times within four years, according to new research.

The pan-European report, compiled by Datamonitor, said that private e-marketplaces will account for more than £420 billion in transactions by 2005, compared with £8 billion this year. By this time, it predicted 1,300 private e-marketplaces will be operational, 500 of them in Europe.

The study projected accompanying growth in public marketplaces in the same period, from £47 billion to more than £500 billion. It said the two e-marketplace models would evolve along divergent paths rather than competing.

Commerce One, the e-marketplace company that commissioned the research, is halfway through a year-long transition period, in which it will shift its focus on private marketplaces from 20 per cent to 80 per cent.

"Public and private marketplaces are essentially complementary," Mark Hoffman, its chief executive, told SM.

"Private ones will eventually drive liquidity in public ones. For strategic purchasing, and partners with whom buyers have close relationships, particularly for industry-specific supplies, you should use private marketplaces," he added.

A third of the public e-marketplaces operational in 2000 have closed. But the survival rate signalled a surprisingly robust market, said Chris Phillips, Commerce One's director of marketing in Europe.


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