The company is Asia's largest B2B marketplace, and the 8th largest in the world, according to research company Net Market Makers. In the wake of a year that has seen the B2B sector hit both highs and lows, Hinrichs suggested that B2B companies will face even tougher times in 2001, and that a major shakeout and market consolidation is now underway. Well over fifty per cent of the company's total revenues for the year 2000 are expected to be generated from Global Sources' online marketplace services. In surveying competing B2B business models, Hinrichs paid special attention to the challenges faced by procurement portals, typically formed by consortia of bricks and mortar companies with large buying power.
Companies generally win or lose according to how well they buy, and how well they sell.
When used for mission-critical products, the end result of a procurement portal is to reduce significantly the role of purchasing as a competitive advantage. In addition to this fundamental challenge, Hinrichs also elaborated on some of the implementation hurdles that many of the consortia are facing, including costs of integrating legacy systems, political infighting, a lack of clear standards, and the delays that these issues are already causing. Recently, US Treasury Secretary Lawrence Summers commented that B2B is not a wave, but a river. In my opinion, this river is expanding and growing, and will continue to reshape the landscape of business - for the better. The fact is, however, that picking the winners is a higher-stakes game than ever before, not only for investors, but also for the buyers and suppliers whose entire businesses may depend on the choices they make.