What is e-business?
E-business is a general term that means that the
business is done by communication from one
computer to another, and usually through the
A collaborative business and trade development
process conducted electronically within a company
and between business partners.
It refers to any kind of information exchange, service
and transactions, undertaken through ICT-enabled
Why use e-business?
Electronic business (e-business) is increasing
and can be an interesting alternative or supplement
to "normal" business that is done with direct contact
between the buyer and seller
– especially for companies that export and therefore
do business over a long distance.
A B2B Electronic marketplace
Business to Business (B2B) or Business to
Open to several buyers and sellers
Does not itself sell or buy goods or services
Must have at least one trading function
Companies use a more complex buying process than
E-marketplaces support the purchasing process used
Results from using e-marketplaces for
A study conducted by eMarket Services among
SME’s that use e-marketplaces to do international
business shows that:
Only 5% use e-marketplaces for international
However among those that DO:
64% shows increased international sales
74% see increased economic results
86% want to continue using e-marketplaces for
Source: eMarket Services (http://tinyurl.com/yg7cv7s )
Source: case studies interview - eMarketServices
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Advantages of using e-marketplaces
Types of e-marketplaces
E-marketplaces can be categorized according to many
• Buyer or Seller centric
• Horizontal or vertical
• Closed or open
• Regional or global
On a buyer-centric e-Marketplace, the e-
Marketplace implements software that supports the
The catalogue contains information from a set of
suppliers and aggregates these into a single internal
catalogue that makes it easier to find and compare
the products offered.
Advantages of buyer-centric
Tight control over the procurement software, catalogue
data and processes
Highly customised solution to meet the buying
Procurement solutions can be fully integrated into the
buying organisation's financial management system to
automate the procurement process
Advantages of buyer-centric
• Offer the most procurement functionality
• Lead to fast and easy product search and selection.
• Access to multiple suppliers' offerings
• Can usually do price comparisons.
• The costs of participating in these systems are
• There are no transaction fees
• Require little investment to participate.
Disadvantages of buyer-centric
A closed purchasing environment, allowing suppliers to trade
only with the central buying organisation.
Higher system maintenance costs for the buyer, but
generally catalogue maintenance (updating items, prices
and availability) can be done by sellers, with the updated
data provided to the buyer.
Issues can arise as to the currency of data, stock availability
etc, when suppliers do not have direct control over items
listed in the buyer's catalogue.
High up-front investment for the buying organisation.
Suppliers wishing to move to on-line trading may need to
accommodate a number of different systems used by their
customers, increasing costs and complicating content
On the seller-centric e-Marketplace, the suppliers
present themselves and their product catalogue.
The buyers browse the catalogues, make requests
and place orders.
Advantages of seller-centric
• Low investment cost
• Some sites are aggregated into virtual e-malls to
reduce the need to search many different sites
• Optimal in terms of control, cost, maintenance and
functionality, but their customers need to know
where to find them so their use may be limited.
Disadvantages of seller-centric
Suppliers' sites provide only limited support for the buyer's
purchasing process, typically only the ability to browse
catalogues and place orders.
Buyers lose control over catalogue data.
Support for pre-arranged contracts may be limited.
Buyers must access each supplying organisation's system
individually, and only one supplier's catalogue can be
accessed at a time.
Buyers must learn to use multiple supplier systems and
manage multiple access right details (e.g. user-name and
Buyers must know where to find the site.
Integration into financial management systems at the
buyer's end may be very difficult.
A Vertical e-Marketplace addresses the needs of a
particular industry, such as the chemical industry.
It links buyers and their suppliers and often have
other industry related services, such as industry news
and newsletters, information about commodity pricing
and may even host industry specific events.
The Horizontal e-Marketplaces covers a wide range of
industries, and are mostly trading MRO (Material, Repair and
Operations) products, as opposed to strategic products that
are used in the production.
A horizontal e-Marketplace will focus on a set of trading
functions (such as catalogues or auctions) or the needs or
companies in a particular region and attempt to offer the
best function or the most complete coverage of that regions
Closed and open e-Marketplaces
Some e-Marketplaces are closed and require an
invitation to join.
Usually this invitation is given by the buyer and
extended to its suppliers.
Regional and global e-Marketplaces
Many products cannot easily be sold to any region.
Many public procurement sites have a regional focus
Some e-Marketplaces also have a focus on a small
region to help develop the suppliers and producers of
Regional e-marketplaces are only available in the
language of the region
In order to promote business, the e-Marketplace needs to
have at least one Trading Function:
• Online directories
• Classified ads
• Online order
• Request for Quotation/Proposal/Bid (RFQ, RFP, RFB)
• Reverse auctions
• System integration
Online directories are databases of companies.
Buyers can find new suppliers and suppliers can get
Buyers can search by products or services, by region
or by company.
A catalogue is list of products and services offered by
Some catalogues list product information on a general
level, others are very detailed.
Classified ads display offers of specific products for
sale or wanted by a buyer.
The ads are sorted by the type of product, brand or
"Online order" is when an order can be placed online
for the articles listed for sale in a catalogue or
Orders to various sellers can in this way be placed
directly on an e-Marketplace.
Request for Quotation/Proposal/Bid (RFQ,
"Requests for Quotation/Proposal or Bid" are usually
an on-line form where the seller or buyer sends a
request to sell or buy a product.
The RFQ/RFP/RFB function can be used to request a
price or proposal on a product
The request is typically sent to the trading partners
by email to be answered.
In an auction, a specific product or a specific quantity
of products is being placed for sale.
The auction starts and ends at a pre-set time. Buyers
can then submit bids during that period of time.
"Reverse auctions" are also called sourcing auctions
or buyers' auctions, help buyers to find the cheapest
supplier for a contract.
Within the auction the potential suppliers submit
offers, lowering the selling price for each submitted
Are the companies using e-business?
54% 37% 7%
Only 7% of the SMEs use advanced e-business
solutions like e-marketplaces
http://www.ecommerce.ac.uk - Commerce in Welsh SMEs: The State of the Nation Report 2003/2004
eMarket Services is funded and operated by the trade
promotion organisations of Canada, Norway, Spain
The eMarket Services is a non profit project and
serves to help our companies to expand their
Our mission is to make it easier for companies to use
e-marketplaces to find new customers and suppliers
for their international business.
eMarket Services produced
the training course on how to
use e-marketplaces for online
export for the International
Trade Centre (ITC)
The Handbook on how to use e-marketplaces is
available in English, Spanish and Norwegian