Korean Firms Struggle with B2B E-Commerce Strategies
While business to business (B2B) e-commerce is widely forecast to emerge as the key driving force in the global Internet business, Korea's B2B sector is feared to be saddled with a shaky infrastructure and misguided initiatives.
With 1,000-plus e-marketplaces expected to sprout up within this year worldwide, Korea is likely to see only 60-odd B2B sites in the same period, the Korea E-Commerce Study Cooperative, a private think-tank, said in its latest report.
The slower-than-expected progress of B2B e-commerce in Korea is largely attributed to problems with business models, product development, content and profit-generation schemes, the report said.
To break through, Korean Internet players and B2B outfits should develop viable marketing strategies, form alliances with offline companies, nurture strong brands and secure a solid channel for continued investment, the report added.
A particular burden for Korean B2B players is the near-absence of viable business models, controversy-ridden standardization and high consulting fees.
A majority of B2B business models experimented with by Korean venture start-ups have yet to find ways to turn profits and secure info-tech solutions.
In addition, analysts view that Korean B2B business models are struggling with poor strategies for management, profits, competition and knowledge exchange.
Another weak point is the absence of an electronic database that supports the link between suppliers and buyers.
Against this backdrop, offline companies are setting up large-scale vertical portals that would eliminate intermediaries. This means B2B ventures will lose the battle unless they establish a solid brand and functionality within a couple of years.
Currently, 26 offline companies have entered the e-marketplace with their offline infrastructure in a bid to streamline the supply network and cut costs. …