The B2B revolution is underway in Asia, bringing with it huge e-commerce flows and e-markets as well as brutal competition driven by cheaper and faster information and transactions. By Brills Rebeiro
SINGAPORE, 29 June 2000 -- Goldman Sachs' 560-page report on B2B in Asia (excluding Japan) forecasts that as competition intensifies, e-frastructure will be one of the enabling tools used by corporates to keep, extend or recapture their competitive edge.
B2B e-commerce transactions in the region is predicted to reach US$440 billion by 2005. Asia-Pacific would generate about 10% of the US$4.5 trillion in global B2B e-commerce transactions.
Over the next decade, B2B e-commerce transactions is expected to boost the economic growth of individual Asian economies by 0.2% - 0.8% per annum. Demand for Asian exports is expected to increase due to the region's role as supplier of hardware for the New Economy.
Other major conclusions of the GS B2B@sia report, which includes a survey of 70 companies across Asia-Pacific on the B2B e-commerce market, are summarized as follows: B2B-driven competition will force companies to focus on their core competencies
Weak links in their value chain will need to be reinforced by e-markets, collaboration, and outsourcing. As B2B takes hold in Asia, the demand for e-frastructure services will explode. The first true B2B beneficiaries will be the e-volution enablers, such as Web hosting, e-business architects, and ASPs. GS B2B@sia Survey Results: Companies recognize the opportunity
Asian companies see the strong upside for B2B
71% of respondents to the survey had been planning their e-commerce strategies for at least six months.
A handful of leaders are emerging
Hutchison, Legend and Li & Fung who are aggressively seeking to expand revenues are seen to be at the head of the leading pack. Up-and-commers like Parkway Holdings and Siam Cement are close at their heels, but have e-commerce strategies that require execution.
Traction battle for Asia's e-markets is just begining
Most exchanges are expected to fail. Collaboration is a key element of B2B, but it is also not seen as a traditional strength in Asian companies. Consolidation is likely. Brick and mortar incumbents that form consortiums and partner with strong dot-coms appear to have a winning combination.
Adoption in Asia will be uneven and would trail the US by about 18 months
Lack of e-frastructure will restrain B2B adoption in the short term. By end-2001, e-commerce is expected to accelerate in developed markets like Australia, South Korea, Hong Kong, Singapore and Taiwan. The remaining Asian economies will lag further behind, hurting their competitiveness.
B2B@sia country by country overview:
Developed Asia seems to have a clear advantage.
and Australia, having first mover advantage
Taiwan, beneficiary of global electronics outsourcing
Hong Kong and Singapore, can leverage their status as financial hubs to B2B e-markets
China, will take longer to get B2B-enabled due to the country's poor e-frastructure.
Asean, suffering from the lack of e-frastructure and value-added tradable goods could further widen the gap in economic development with the more developed economies in Asia-Pacific.
Copies of the GS B2B@sia report are available from Goldman Sachs. Please call Goldman Sachs Corporate Communications at (852) 2978 0218.
More on ZDNetAsia
Goldman Sachs is a global investment banking and securities firm, providing a full range of investing, advisory and financing services worldwide to a diversified client base, which includes corporations, financial insitutiions, governments and high net worth individuals. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.