US Internet B-to-B Trade Soars to $6 Trillion in 2005

  • June 26, 2000
The Internet's impact on the US Business-to-Business market will be expansive with more than $6 trillion in online trade expected by 2005, representing 42 percent of total US B-to-B non-service spending, according to new research from Jupiter Communications, Inc. To take advantage of this overwhelming growth, Jupiter advises that businesses begin now to incorporate Internet strategies throughout their procurement and sales processes, and invest in multiple selling models to leverage market disruptions while protecting share of market.

Jupiter's research reveals that while this year's Internet B-to-B trade will only represent 3% of the total US B-to-B non-service market or $336 billion, the online volume will grow twenty-fold over the next five years opening the doors for new business models such as net markets and coalition markets. Currently, the direct channel, a model of one seller to many buyers, dominates 92% of the Internet B-to-B market.

However in 2005, 35% of the Internet B-to-B trade volume will be conducted via a net market, a model of many buyers and many sellers, or through a coalition market, comprised of a consortium of buyers or sellers. Net markets can completely disrupt current channels and alter how companies and industries conduct business. While many factors can power net market penetration in a given industry, the degree of fragmentation and price volatility remain as two critical drivers.

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