Foreign Markets Draw B-to-B Firms Overseas

From elevator companies looking to sell lifts in Paris to maintenance suppliers that want to move lighting fixtures in Mexico City, U.S. companies are building international e-commerce networks in anticipation of a windfall.

Last week, Ariba Inc. in Mountain View, California, opened its first business-to-business marketplace in Latin America, offering maintenance and farming products to Mexican businesses.

"It's early. It's very, very early," said John Schweig, vice president of business development and international operations at W.W. Grainger Inc., a $4.5 billion building maintenance and repair supplier based in Lake Forest, Illinois. "The e-commerce market is still in its prenatal stages here, but the pickup rate should be nothing short of incredible, and we want to be one of the leaders in that."

Cambridge, Massachusetts-based Forrester Research Inc. agrees. It recently released a report estimating that global e-commerce will reach $6.9 trillion by 2004, up from a projected $655.8 billion this year.

More than 90 percent of that growth is expected to occur in the business-to-business sector. Forrester predicts that foreign markets, which now account for 25 percent of the global picture, will to grow to $3.7 billion, or 54 percent of the total market, by 2004.

Marketplaces on the Way Up

Otis Elevator Co. in Farmington, Connecticut, sells roughly 22 percent of the world's elevators, primarily in Europe, but none are sold online - yet.

Before it starts taking online orders at the end of this year, Otis intends to create a functional, multilingual Web site.

A version of the new site debuted in January, and the goal is to serve 49 countries in 29 languages by next month, said John Doucette, Otis' vice president for information systems.

Next week, Otis will unveil an online service through which French architects can lay out their building specifications and have Otis' engineers determine what types of elevators are needed.

"We have a complex product, and we need to teach people how to shop for it," Doucette said. Otis expects 25 percent to 30 percent of its overall growth during the next three years to come from business conducted via its Web site.

Ben Wright, Ariba's director of marketing for Europe, the Middle East and Africa, said he thinks companies awaiting a European boom will be rewarded next year. The growth of business-to-business marketplaces in Europe is progressing far faster than the rate he saw during the early stages of their development in the U.S.

"We're absolutely overwhelmed with people calling us, wanting to put together marketplaces," Wright said. Inc. in Menlo Park, California, opened a London office last fall and is constructing a European marketplace for its business-to-business travel clients. Stateside, GetThere boasts a client list that includes Lucent Technologies Inc., The Boeing Co. and The Procter & Gamble Co.

"U.S. multinationals are driving us into the market," said GetThere Chief Operating Officer Ken Pelowski.

New markets mean adding new languages and performing transactions in different currencies, he said. Also, Europeans travel by ferry and train far more than Americans do, thus forcing GetThere to differentiate its product.

"You have to localize your offerings and customer support, or you won't make it over there," Pelowski cautioned.

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