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
Description
Total
2006
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 eworld
 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
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?
1.
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
 sports and entertainment

 telecommunications

 health and beauty

 home appliances

 home supplies

 industrial supplies

 lights and lighting

 luggage, bags and cases

 minerals, metals and

materials
office supplies
packaging and paper
printing and publishing
security and protection
textile and leather products
timepieces
jewelry and eyewear
toys
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
 1995
 Commercialized China’s
internet
 1997
 Explored International trade
online
 1999
 Hangzhou, China
 Online marketplace
 Global enterprise community
 Part of the Alibaba Group
 Revenue Generated by:
 Marketing & Promotion

Fees charged to member
companies
 Revenue sharing with third
party service providers
 Premium member services
offered at a fee
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

Co-founder
President & CEO

 1995 site launched
 Revenue Generated by:
 Advertising


Banner ads
Skyscraper & side tile ads
 1997 became a realized
 Product sales
business venture
 2008 launched 2.0 version
allowing members to
customize for individual
needs
 Service & Marketing
options
 Member service fees
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
 10,000 projects
completed monthly
 91% of clients are repeat
clients
 May 2001 – July 2004
 20,202 projects for bid
from 7,907 clients
 Clients from 59 countries
 263,572 bids from 31,024





providers
Providers from 70
countries
Average bid ~$130
Median bid ~$50
Average number of bids
per project ~13
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
 CEO
 Bachelors in Computer
Science
 1998
 Offices in Tampa Florida
 Revenue Generated by:
 Percentage commission
of each completed
project



15% taken from the coder
Pays transaction fees
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

File weekly status
4) Receive and approve work
reports
5) Rate the coder

Send product to buyer
Receive payment
5) Rate the buyer
4)
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
2005
48
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.
2003
49
B2B is worth
TRILLIONS
of revenue dollars annually!
Shouldn’t YOU benefit
from using this
marketplace?
50
09Q2 China Internet Economics Market Size Reached 16.76 Billion Yuan. August 19, 2009.
http://www.marketreportchina.com/market/article/content/3376/200908/207627.html (accessed October 19, 2009).
http://www.farms.com/farmspages/aboutfarms/tabid/188/default.aspx.
"2007 E-Commerce." U.S. Census Bureau E-Stats. May 28, 2009. http://www.census.gov/estats (accessed September 26, 2009).
alibabawtory.com.
http://www.alibaba.com/trade/servlet/page/help/new_to_alibaba/alibaba_user_guide/alibaba_user_guide?showtour=on.
Connell Company Description. http://www.hoovers.com/connell-company/--ID_40099--/free-co-profile.xhtml.
Corporate History. http://www.farms.com/ContentPage/CorporateHistory/tablid/232/Default.aspx.
Definition and Concept of Electronic Commerce . October 27, 2003. http://www.4th-media.net/overview/concepts.php (accessed
October 14, 2009).
E-Markets Company Description. http://www.hoovers.com/e-markets/--ID_60073--/free-co-profile.xhtml.
Gallaghar, Terry. "The War for E-Commerce Talent." Consulting to Management 11, no. 01 (May 2000): 45-46.
Gefen, and Carmel. "Offshoring at an Online Programming Marketplace." Digital Planet, 2008.
Genfen, David, and Erran. "Is the World Really Flat? A look at offshoring at an onlie programming marketplace." MIS Quarterly.
Globalsources.com. http://www.globalsources.com.
"Part 1: An E-commerce Overview: You Will Be Graded on This." In E-Commerce for Dummies, by Don Jones, Mark D. Scott and
Richard Villars, 10. New York: Hungry Minds Inc, 2001.
Kwan, Savio. Alibaba's Story. 2004.
http://www.unctadxi.org/.../Alibaba_WSIS_presentation_22_May_08_v3.ppt.
Laseter, Tim, and Christopher Capers. E-Marketplace Survival Strategies. October 11, 2002.
Loewen, Jacoline. B2B E-Commerce. Edited by Strategy International.
http://www.strategyinternational.com/b2b_loewen.htm (accessed September 26, 2009).
Maclean, Susan. "The cash crop is online." October 04, 2007.
http://news.therecord.com/article/250904.
Meet China.net. http://www.meetchina.net.
Probert, Robert L., Yanping Chen, Behrad Ghazizadeh, D. Paul Sims, and Maurus Cappa. "Formal verification and validation for
e-commerce: theory and best practices." Information and Software
Technology (Elsevier) 45 (2003): 763-777.
Reijers, Hajo A., and Monique H. Jansen-Vullers. "Better Processes = Better E-commerce." Quality
Progress 38, no. 3 (March 2005): 57-63.
Tassabehji, Rana, James Wallace, and Nelarine Cornelius. "E-technology and the emergent eenvironment: Implications for organizational form and function." The Journal of High Technology
Management Research (Elseiver) 18 (2007): 15-30.
The Definition of E-Commerce. http://www.businesstown.com/internet/ecomm-definition.asp (accessed September 26, 2009).
Watts, Steve. "Corporate Strategy: Best Practice - Online shopping." ProQuest. Jun/Jul 2008. (accessed October 20, 2009).
We Deliver Your Audience. http://www.agpromote.com.
Weathers, Danny, Subhash Sharma, and Stacy L. Wood. "Effects of online communication practices on consumer perceptions of
performance uncertainty for search and experience goods." Journal of
Retailing (Elseiver) 83, no. 4 (2007): 393-401.
Wikipedia. http://www.wikipedia.alibaba.com.
www.internetb2blist.com/business/farmscom_330256.
http://www.internetb2blist.com/business/farmscom_330256.html.
www.miit.gov.cn.
http://www.miit.gov.cn/n11293472/n11293877/n11301602/n12222003/n12238789/12244609.html.
www.rentacoder.com. http://www.rentacoder.com/RentACoder/misc/About/default.asp.
XE - The World's Favorite Currency Exchange Site. http://www.xe.com/ (accessed October 19, 2009).
Zeng, Ming. Insead - Alibaba.
http://www.pinggu.org/bbs/viewthread.php?tid=486627&highlight=alibab, 2001.