Wei (David) Dai

Jing (Teresa) Qian

Marie Steinbach
Papinya Yunibhand
Jingyao (Daisy) Zhang
• Definitions
• Market Scope
• Manager Applications
• Case Study: Alibaba.com
• Case Study: Farms.com
• Case Study: Rentacoder.com
• Best Practices
2
E-Commerce
“Electronic commerce is the paperless exchange of
business information using electronic data
interchange (EDI), e-mail, electronic bulletin boards,
fax transmissions, and electronic funds transfer. It
refers to Internet shopping, online stock and bond
transactions, the downloading and selling of ‘soft
merchandise’ (software, documents, graphics, music,
etc.), and business-to-business transactions.”

The Definition of E-Commerce n.d.

3
 E- Commerce
 Think beyond the basic buying and selling goods
online

 Complete Transaction
 Marketplace
 Selection
 Payment
 Delivery/Receipt

Definition and Concept of Electronic Commerce 2003

4
Business to Business (B2B)
• B2B is a relationship between
2 businesses interacting
through digital/on-line
channels

• More regular and in larger

quantities than a business to
consumer interaction.

• Think of it as selling
wholesale – because it is.
Loewen n.d.
Jones, Scott and Villars5 2001
• Definitions
• Market Scope
• Manager Applications
• Case Study: Alibaba.com
• Case Study: Farms.com
• Case Study: Rentacoder.com
• Best Practices
6
Do you think that B2B e-commerce is worth…
a)A couple Million dollars
b)A Billion dollars
c)A few Trillion dollars

7
 E-commerce & B2B in U.S. 2007
U.S. Shipments, Sales, Revenues and E-commerce: 2007 and 2006
[Shipments, sales and revenues are in billions of dollars.]
Value of Shipments, Sales, or Revenue
2007 2006
Description Total E-commerce Total E-commerce
Total $21,847 $3,333 $20,797 $2,972
B2B $11,088 $3,082 $10,542 $2,761
B2C $10,759 $251 $10,255 $211
Table selections from the E-Stats 2007 E-Commerce report from the US Census Bureau

• 15.25% of the National Total comes from E-Commerce

• 92.5% of E-commerce comes from Business to

Business transactions
2007 E-Commerce 2009
8
E-commerce as Percent of Total Value:
2002 - 2007
 Manufacturing B2B
accounts for highest share
of e-commerce
 Less than 20% in 2002
 Over 35% in 2007

 Merchant Wholesale
makes up the other half of
B2B
 Averages ~20% annually

 Overall B2B growth: 15+%

2007 E-Commerce 2009

9
 E-commerce & B2B in China 2009
 E-Commerce is 16.76
billion yuan
 $2.455 billion US
dollars

 B2B revenue for the 2nd

quarter (April-June) is
1.47 billion yuan
 $215 million US dollars
 Up from 1.38 billion
yuan in 2nd quarter
2008
$1.00 = ~6.8 yuan
09Q2 China Internet Economics Market Size Reached 16.76 Billion Yuan 2009
10
• Definitions
• Market Scope
• Manager Applications
• Case Study: Alibaba.com
• Case Study: Farms.com
• Case Study: Rentacoder.com
• Best Practices
11
12
Manager/Company Benefits
 The E-environment is here and it is
changing the business world
 Business models and hierarchies are
changing
 Social interaction has changed to
include technology
 Technology is integrated into
everyday life and every decision

 E-sourcing & navigating the

e-environment
 E-commerce marketplaces
 E-transactions
Tassabehji, Wallace and Cornelius 2007
Watts132009
Manager/Company Benefits
 Quality online presentation determines your success
 Decrease the perceived customer risk
 Increase prior customer retention

 Make it effective to work with your suppliers

 Clear transaction format
 Incentive to remain with partners who understand the e-
world

 As an employee with e-commerce skills

 High demand low supply
 Better benefits offered to increase retention
Weathers, Sharma and Wood 2007
Gallaghar 2000
14
15
Evaluating B2B transactions
1. Size of exchange in terms of total sales made on the exchange,
number of customers, number of suppliers,
2. Major products of exchange
3. General characteristics of customers and suppliers
4. Who founded the exchange? When?
5. What is the exchange's business model (how do they generate
revenue, have they earned a profit?)
6. Are there competing exchanges in this market? If so, how does
this exchange differentiate itself?
7. How do members interact with the system?
8. Is the exchange successful or is it too early to tell?
9. What is the promised value to customers?
10. What is the promised value to suppliers?

Syllabus Questions
16
Evaluating B2B transactions
Why we chose our Case Studies
Alibaba.com demonstrates good layout
and increases customer confidence

Farms.com integrates technology for

everyday use and makes it effective to
interact with suppliers

Rentacoder.com encompasses the whole

business transaction cycle and
connects you to in demand workers
17
• Definitions
• Market Scope
• Manager Applications
• Case Study: Alibaba.com
• Case Study: Farms.com
• Case Study: Rentacoder.com
• Best Practices
18
19
Size of exchange in terms of total sales made on the
exchange, number of customers, number of suppliers.

 69 million members
 240 countries and territories
 2 million retailers
 4.2 million suppliers
 4.8 million trade leads, company postings, and
product listings
 2012 forecasts increase to 100 million members

alibabawtory.com

20
Major products of exchange.
Range of product in various industries
 shoes and accessories materials
 sports and entertainment  office supplies
 telecommunications  packaging and paper
 health and beauty  printing and publishing
 home appliances  security and protection
 home supplies  textile and leather products
 industrial supplies  timepieces
 lights and lighting  jewelry and eyewear
 luggage, bags and cases  toys
 minerals, metals and  transportation
alibabawtory.com
21
General characteristics of customers and suppliers .
 Customers:
 Focus on USA
 Aliblog started in 2008
 Asia/India
 Europe
 Australia
 Suppliers:
 Small to Medium firms
 Focused on international
trade
 Looking for additional
communications channels

alibabawtory.com
22
Who founded the exchange? When?
What is the exchange's business model?
 Jack Ma
 Supporter of China’s Internet
 Revenue Generated by:
 1995
 Commercialized China’s
 Marketing & Promotion
internet  Fees charged to member
 1997 companies
 Explored International trade  Revenue sharing with third
online party service providers
 1999  Premium member services
 Hangzhou, China offered at a fee
 Online marketplace
 Global enterprise community
 Part of the Alibaba Group

Wikipedia n.d.
Zeng 2001
23
Competitors? Differentiators?

• Competition and market overlap

Vertical competition with Industry Portals
Horizontal competition with Supply Chain
Marketplaces
• Differentiated by:
Strength of search technology
Established brand name
Detailed product information Zeng 2001
Globalsources.com n.d.
Meet China.net n.d.
24
Take a tour

25
• Definitions
• Market Scope
• Manager Applications
• Case Study: Alibaba.com
• Case Study: Farms.com
• Case Study: Rentacoder.com
• Best Practices
26
Video Demo: High Speed version
27
Size of exchange in terms of total sales made on the
exchange, number of customers, number of suppliers.
 8.7 million dollars in sales
reported for 2008
 100,000+ registered users
 30,000 visitors per day
 4 million page views per
month
 30% annual increase in
user traffic

We Deliver Your Audience

28
Major products of exchange.
Serving the global agricultural & food industry
 Information products & services
 Real time news, weather,
market quotes
 Media services
 Marketing software solutions
 Freight & transportation
matching
 Venue for buyer & seller
 Livestock
 Land
 Machinery
 Auctions

 Discussion Forums Farms.com

29
General characteristics of customers and suppliers .
 Customers & Suppliers:
 Who’s who of
agribusiness
 Big companies
 John Deere
 Bayer Crop
 New Holland
 Small farms
 Located:
 Across North America

Maclean, 2007
30
Who founded the exchange? When?
What is the exchange's business model?
 Graham Dyer  Revenue Generated by:
 Co-founder  Advertising
 President & CEO  Banner ads
 1995 site launched  Skyscraper & side tile ads
 1997 became a realized  Product sales
business venture  Service & Marketing
 2008 launched 2.0 version options
allowing members to  Member service fees
customize for individual
needs Maclean, 2007
Corporate History
Laseter & Capers, 2002
31
Competitors? Differentiators?
• The Connell Company
Many subsidiaries and marketplaces
Wholesale foods
Industrial equipment
Real estate
Business services
• E-Markets Inc
Agricultural market
Internet based information management tools
• Differentiators:
Scope of services
Customization for members
Connell Company Description
E-Markets Company Description
32
http://www.farms.com

33
• Definitions
• Market Scope
• Manager Applications
• Case Study: Alibaba.com
• Case Study: Farms.com
• Case Study: Rentacoder.com
• Best Practices
34
35
Size of exchange in terms of total sales made on the
exchange, number of customers, number of suppliers.
 2006  263,572 bids from 31,024
 10,000 projects providers
completed monthly  Providers from 70
 91% of clients are repeat countries
clients  Average bid ~$130
 May 2001 – July 2004  Median bid ~$50
 20,202 projects for bid  Average number of bids
from 7,907 clients per project ~13
 Clients from 59 countries  95% of winning bids
under $500

Gefen & Carmel

36
Major products of exchange.
Software

Rentacoder.com

37
Who founded the exchange? When?
What is the exchange's business model?
 Ian Ippolito  Revenue Generated by:
 CEO  Percentage commission
 Bachelors in Computer of each completed
Science project
 1998  15% taken from the coder
 Pays transaction fees
 Offices in Tampa Florida
 Balance is company profit

www.rentacoder.com/RentACoder/misc/About/default.asp

38
Competitors? Differentiators?
Elance
• Differentiators:
Client has control over bidding and acceptance
process
3 Payment options
Regular mail-in check
Western Union
PayPal
Rentacoder.com does not charge quarterly
service fees based on coder specialty
www.rentacoder.com/RentACoder/misc/About/default.asp

39
Process for customers and suppliers
 Customers:  Suppliers:
1) Post a bid request 1) Receive bid requests
2) Receive bids from coders 2) Make a bid
3) Choose and accept a bid 3) Do the work
4) Receive and approve work  File weekly status
reports
5) Rate the coder
 Send product to buyer
4) Receive payment
5) Rate the buyer

Rentacoder.com
40
http://http://www.rentacoder.com
request bids

41
42
Evaluating B2B transactions

1. Are these exchanges even successful?

2. What is the promised value to customers?
3. What is the promised value to suppliers?

Syllabus Questions
43
Promised Value to Customers
163-fold return on
transaction

Fast & Reliable market

information
Links to decision tools
Choice of over 270,000
coders
Global access in real time www.miit.gov.cn n.d.
www.internetb2blist.com/business/farmscom_330256
www.rentacoder.com
44
Promised Value to Suppliers
Preferential treatment for highly
rated suppliers

Niche marketplace access

Access to industry decision makers
Fees variable to amount of work
and skill level
Control over jobs bid and work to
be done

Global access to clients www.miit.gov.cn n.d.

www.internetb2blist.com/business/farmscom_330256
www.rentacoder.com
45
• Definitions
• Market Scope
• Manager Applications
• Case Study: Alibaba.com
• Case Study: Farms.com
• Case Study: Rentacoder.com
• Best Practices
46
Name one feature all 3 of
these B2B marketplaces
had in common…

47
Best Practices
 Reduce customer risk in the marketplace and on your
supplier sites by providing:
 Multiple searchable terms
 Product images and pictures
 Clear, concise descriptions
 User feedback and ratings

 When outsourcing remember that B2B marketplaces

provide connections to global suppliers

Weathers, Sharma and Wood 2007

Reijers and Jansen-Vullers
48
2005
Best Practices
 Buffer – subscribe to the marketplace
 Customize your dashboard for greater control
 Avoid being bombarded by non-related offers

 Rate your experiences with marketplaces, suppliers,

and clients
 Test the site (the output) to see how effective your
marketplace is
 Make sure the design of the marketplace is useful to the
buyers and suppliers who are using it

Reijers and Jansen-Vullers 2005

Probert, et al.
49
2003
 B2B is worth
TRILLIONS
of revenue dollars annually!
Shouldn’t YOU benefit
from using this
marketplace?

50
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