E-commerce evolution will weed out startups: IDC

The e-commerce bubble is about to burst for dotcoms, with large businesses instead set to dominate future market growth.

So warned analysts from IDC during the company's recent Directions 2000 conference in the US. They claimed e-commerce is entering a new era in which alliances between big companies are forcing startups to turn a profit faster, form alliances or be driven out of the market.

The IDC analysts said Internet commerce sales hit $US130 billion last year but will rocket to $US2.4 trillion by 2004 with the growth to be driven primarily by large corporations - often traditional competitors - that can move quickly to form partnerships for common business-to-business exchanges which present a more immediate return.

That rapid growth in the size and scope of e-commerce activities will put pressure on smaller-scale e-commerce ventures, they added.

"The change is not only in business behaviour, but in the speed at which these changes are happening," John Gantz, senior vice president at IDC, commented.

The lure of the Internet will spur 65 per cent of businesses to have an Internet presence by the end of this year, 30 per cent of which will be doing e-commerce, he said.

IDC also predicts that by 2004, 60 per cent of e-commerce activity will take place outside the US.

"There's opportunity there [big enough] to drive a fleet of trucks through," said IDC analyst Frank Gens.

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