Two electronics distributors, Arrow Electronics Corp. and Avnet Inc., ranked among the top five in the North American business-to-business (b2b) electronic-marketplace market in 1999, according to a study by Gartner Group Inc., San Jose.
Though the e-market is still relatively small, it grew 171%, Gartner estimated, from $183 million in revenue in 1998 to nearly $500 million in 1999. This growth was propelled by "brick-to-click" distributors and established dot-com marketplaces, the market researcher said.
Arrow Electronics, Melville, N.Y., had 1999 e-market revenue of $59.1 million, according to Gartner, a 130% increase from 1998. Avnet, Phoenix, grew 117%, from $17.3 million to $37.4 million in on-line revenue from 1998 to 1999.
Both companies' market shares dropped slightly, however, as the b2b e-market grew substantially and attracted more players.
The top-tier online b2b vendors were led by computer reseller Ingram Micro Inc. and IT products and services provider Tech Data Corp., with $131 million and $60.6 million in revenue, respectively.
Grainger.com registered the most startling year-to-year growth, at 633%. The online b2b marketplace for maintenance, repair, and overhaul (MRO) products and services, went from $2.6 million in sales in 1998 to $37.4 million in 1999.
"Online operations of brick-and-mortar intermediaries like Ingram Micro dominated the market in 1999," said Leah Knight, research director for Gartner's e-Business Services. "This evidences the relative ease of migrating an existing customer base to an online model over building a new customer base from scratch, which many of the dot-com marketplaces have been struggling to do."
Ingram Micro commanded a dominant market share of 26.4%. TechData had 12%, while Arrow had 11.9% and Avnet came in with 7.6%.
Gartner sees the b2b e-market into three unique marketplaces: commodities, for high-volume trade of products and services; business service marketplaces, focused on specific inter-enterprise processes, such as logistics, financial services, and MRO; and integration service marketplaces, emerging to focus on linkages and process definitions, and between trading partners to
facilitate process-to-process integration.
"Through 2005, the competitive landscape will be significantly
transformed to a hub-spoke-Web model of inter-enterprise e-marketplace engagement among the three marketplace models," Knight said. "Marketplaces that try to support all three models will fail, but marketplaces that focus with rich software and services environments as required, and a strong base of partners, will dominate their segments."