Predictions for the Next Ten Years

B2B 2010 — B2B in Emerging Markets

By Mark Morley
Director of Automotive and High Tech Industry Marketing

Emerging markets can really be categorised into two groups.  The first group are the so-called BRIC countries, which have been developing quickly in recent years, consisting of Brazil, Russia, India and China.  Other markets that have emerged along with the BRICs include Poland, Romania, Slovakia and others in Eastern Europe. Many of these countries have seen significant foreign direct investment from western companies seeking access to a highly-skilled and low-cost workforce. In the case of China and India, foreign corporations have been keen to also get access to the large and lucrative domestic market. BRIC and Eastern European countries do have a basic communications infrastructure in place today.  However, the telecommunications services are unreliable and subject to regular outages. 

The second group of countries consists of the newer emerging markets in the Middle East, North Africa and South East Asia.  Many of these newer emerging markets have no terrestrial communications infrastructure in place at all.   To obtain foreign direct investment the second group of companies will have to install new communication networks.  Numerous projects are underway at the moment to introduce high speed fiber optic cables to key commercial and manufacturing centers throughout Africa and the Middle East.

B2B adoption in all the emerging markets has been relatively slow.   There are numerous root causes for the B2B e-Commerce technology adoption, most of which are common across both groups of emerging markets.  Examples include the relatively poor power and communications infrastructure; desire to develop new, local B2B standards; and finding skilled personnel to manage the B2B environments. 

During the next decade emerging markets will experience an increase in B2B e–Commerce usage due for three primary reasons.

Firstly, the use of mobile computing platforms has seen exponential growth in recent years.  For example, many of the younger populations of China and India are driving high adoption levels.  In Africa and the Middle East, the poor fixed line communication networks have led to the development of high speed wireless networks around the most populated regions.  Advances in mobile phone technology and built-in wireless data cards for PCs are driving widespread adoption of mobile computing. Wireless data cards allow their employees to work remotely whilst away from the office. If wireless data cards, especially the USB based cards, see wider adoption in 2010, then I would see this leading to far greater levels of B2B adoption.

Secondly, for the demand for B2B e–Commerce within emerging markets will lead to a growth in the use of cloud computing or SaaS based B2B platforms. Historically, countries such as China have been reliant on western expertise for the implementation and management of complex B2B environments. Local companies in emerging markets often lack the qualified IT personnel to manage B2B environments. In the coming years, more companies, especially some of the smaller, more technologically-advanced manufacturers will being to adopt cloud computing and SaaS-based B2B applications. As these B2B applications are hosted by a third party, possibly a western based B2B software or services vendor, it means that companies based in the emerging markets can take advantage of industry leading B2B and supply chain management applications. The main benefit of this is that smaller companies won’t require dedicated staff to install and manage their B2B infrastructure on an ongoing basis.

Thirdly, the use of XML based document standards in 2010 is likely to grow much faster in emerging markets than in other countries around the world. There have been a couple of false starts with regards to XML adoption levels in China. For example and in a 2007 survey by the Odette automotive industry association found that many companies would continue to use a hybrid of western EDIFACT and home grown XML based EDI document standards. The influx of western companies into these regions in recent years is helping to educate these businesses of the importance of using standards to exchange B2B related documents.  As companies get a better understanding of the use of the EDIFACT standards and how EDI documents are structured, I would expect more XML document standards to be created.  These countries typically have thousands of very bright university graduates who will be able to develop new XML based document standards with ease. Combined with the growth in the use of hosted or internet based B2B standards I believe that 2010 will start to see an increased level of interest in developing new internet based XML standards for B2B document exchange.

So in summary, in 2010 improved internet access and use of mobile computing platforms will see greater use of cloud or SaaS based B2B applications, which in turn will see a growth in the use of XML based document standards within the emerging markets around the world.