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:
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.
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.
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