Online B2B: No Match For The Old-Fashioned Way?

Compiled ByDeborah Austin Online business-to-business (B2B) exchanges have not successfully replaced longstanding B2B supply-chain relationships between distributors and customers, suggests a new research study "Shakeouts in Digital Markets: Lessons from B2B Exchanges" from management consulting firm Pembroke Consulting, Philadelphia. The study -- by Pembroke President Adam Fein and Professor George Day of the Wharton School of the University of Pennsylvania, Philadelphia -- found that of about 1,500 independent exchanges operating in 2000, fewer than 700 remained as of July 2002. Less than 200 will survive through 2003 if trends continue, says the study, which covered B2B exchanges in eight industries including electronic components, paper, automotive aftermarket and industrial maintenance/repair/overhaul (MRO). Winners will be adaptive survivors with protected niches supporting existing B2B relationships, or acquisitive incumbents buying pure-plays' assets at deep discounts, it says.