European B2B e-biz growth slower than expected

Despite a growth rate of 294 percent to 81 billion euros (US$71.8 billion), European business-to-business (B2B) electronic commerce isn't ramping up as fast as expected, market researcher Gartner Group said Thursday. Although take-up in Europe has been sluggish to date, B2B online commerce is expected to mushroom to 1.94 trillion euros by 2005, according to a new Gartner forecast released here at the Gartner Europe Spring Symposium/ITxpo 2001.

"We initially anticipated the value of the sales transactions would reach 2.04 trillion euros in 2005," said Petra Gartzen, research director at Gartner.

In 2000, online transactions represented a mere 0.3 percent of the total value of European B2B commercial transactions. This will be 6 percent in 2005, according to Gartner.

"Last year we saw many large corporations making B2B e-commerce announcements. Those were initial plans. Actual implementation can take up to a year," explained Gartzen.

"In the next two years we will see pilot projects coming, some of which will generate real transaction volume," she said.

Online marketplaces have been oversold. Gartner doesn't expect such trading hubs to be significant to online commerce until 2003.

Adoption of Internet commerce varies across the European continent.

"Europe is not a homogenous market like the US; many economies are at a different stage in their adoption of the Internet," said Gartzen. "Germany, Sweden, the Netherlands, and the UK are most advanced, while France and Italy are slower. Especially in Italy there is not much happening at all."

Fortune 500 companies are expected to lead the development of B2B Internet commerce, as these companies deal in the volumes required to introduce a viable electronic value chain, according to Gartner analysts.

Gartner defines B2B Internet commerce as the sales of goods and services for which the order-taking process was completed via the Internet. The forecast is based on the value of B2B non-financial goods and services. Gartner will release its US B2B electronic forecast next week in New York at the Gartner Internet and e-Business Conference and Exposition.

Gartner's Europe Spring Symposium/ITxpo 2001, in Florence, Italy, runs through Friday. Further information can be found at http://www.gartner.com/.

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