The Internet presents a wealth of opportunities to streamline international trade. According to a new Report from Forrester Research, Inc. (Nasdaq: FORR), global online exports will surge to $1.4 trillion in 2004 — with cross-border eMarketplace trade surpassing $400 billion. However, cross-border trade will not flow equally among nations, resulting in an emerging split between countries that actively export and import using the Net and those that do not.
“While B2B eCommerce is accelerating throughout the US, most businesses don’t operate in domestic-only supply chains,” said Matthew R. Sanders, analyst at Forrester Research. “Online trade will expand globally as firms use the Net to attack inefficiencies in today’s international trade practices.”
Forrester projects that Western Europe will lead all regions with $692 billion in global online exports in 2004, driven by Germany’s $144 billion in online cross-border sales. In that same time frame, North America will see more than 23% of its exports move online, led by the US with $210 billion in cross-border eCommerce. Asia-Pacific, fueled by $57 billion in Japanese online exports, will reach $219 billion in four years.
According to Forrester, global eMarketplace trade will reach $408 billion in 2004. Petrochemical exports will propel Western Europe to $215 billion. Denmark and Norway will lead the region — with each sending more than 10% of their international sales via these venues. While sales through eMarketplaces within Canada and the US will reach $1.5 trillion in 2004, only 7% of these online sales will flow across borders. Asia-Pacific exports through online markets will reach $50 billion, driven by sales to North American firms.
As online cross-border sales grow to $1.4 trillion over the next four years, a split among countries will emerge, based on their adoption of the Net for imports and exports. As a result, countries will fall into one of two categories: eBusiness extroverts or eBusiness introverts. Nineteen countries — the eBusiness extroverts — will dominate online international trade. Led by Canada, Norway, and Denmark, these extroverts will represent more than 80% of online imports and exports.
Although the Net will impact countries in different ways, Forrester believes that national policies remain critically important. “eBusiness introverts shouldn’t just give up. They can accelerate their eBusiness positioning by adjusting policies and targeting technology infrastructure investments,” said Bruce D. Temkin, research director at Forrester Research.
eMarketplace trade will ultimately disrupt many of today’s global trading patterns. To determine the impact of this shift on different countries, Forrester created the eMarketplace Export Index (eMEI), defined as “the potential for export gains from the growth of global eMarketplace trade.” Countries with an above-average eMEI, like Canada, the US, and Belgium/Luxembourg, will see the expansion of their collective online exports hit hypergrowth in 2001. On the other hand, the adoption of online exports in nations with a below-average eMEI, like China, Hong Kong, and Japan, won’t hit hypergrowth until 2003.
For the Report “Sizing Global Online Exports,” Forrester interviewed 50 eMarketplaces that have plans to recruit international participants. US eMarketplaces expect 44% of their volume to come from abroad by 2002. In addition to this primary research, Forrester modeled the eCommerce adoption in more than 18,000 trade pairings among 48 countries.