Forum Archive Index - February 2001

["Ben Dutton" <bendutton@sharechat.co.nz>]

Hi Graeme,

 

Good to hear from you, I thought I'd make a couple of comments on your post below...

 

If, as you say, the "marketing whizz kids" are saying "business to business (B2B) there is the next growth area" they are a bit behind the times and perhaps should get with the program a bit :-)

 

I do agree that the B2C bubble has burst - that happened in March/April last year when most of the B2C stocks imploded.  B2B stocks were not marked down as much at that time (they suffered later), but the B2B sector of the Internet economy is still undergoing a massive shakedown. 

 

While the potential B2B market is huge (dwarfing B2C) it's still early days yet and investors should think carefully about investing in companies that are solely dependant on a B2B concepts for revenue.

 

I remember reading venture capital newsletters during the first half of 2000 that detailed countless B2B fundings - most of those marketplaces will go out of business (or have already) soon - there's simply too much competition.

 

Actually, the latest Unlimited magazine has a great article on B2B in New Zealand.  I'll try and get a copy of it for ShareChat.

 

But I digress, we are talking about B2C here, after all. 

 

I've always been bullish about B2C - long-term forum members will remember me defending Amazon.com etc. over a year ago.

 

And my views have, for the most part, not changed - I still think that the B2C sector will be a future success for retailing - however B2C has been given a horrible name by the sickeningly wasteful business plans and practises of many companies. 

 

Even Amazon.com has made some extraordinarily foolish moves in the market, and, as for sites like Pets.com and Garden.com....how they could burn through hundreds of millions of dollars in such a short while is anyone's guess (lots of cool launch parties and Super Bowl ads among other things, I suppose...:-)

 

So Graeme, I think that you are right being wary about companies in the sector, but you shouldn't write the sector off completely, as many investors and commentators have.

 

B2C will still be a growth area, just not as fast as what was originally predicted.  Internet uptake is slowing, and many consumers are still not using the web for their purchases (there are a whole lot of reasons for this).

 

Also, as Colin pointed out, bandwith is perhaps one of the biggest impediments to B2C taking off - it simply takes to long for many webpages to download, and frustrating potential customers is not normally the best way to make sales.

 

Hang in there and keep on following the sector.  The next five years is gong to be interesting indeed.

 

Best Regards

 

Ben Dutton

 

 

----- Original Message -----

From: Graeme Martin

To: sharechat@sharechat.co.nz

Sent: Thursday, February 01, 2001 9:15 AM

Subject: [sharechat] E-Tailing and net use

Share chatters

 

There are lies and statistics - in the Christchurch Press an article "

Sega considering dumping dreamcast" p17 it quotes 40% of Americans, 25% of Canadians are happy to purchase online, only 12% of Australians are."

 

On page 18 the article "Sending e-mail dominates net use"  John Naughton says that only "4 or 5% regularly engage in online banking or shopping."

 

I go to my local Tertiary Educational Institution and I still get bombarded that E-tailing 

is the best thing - the real growth sector.  Have the marketing whizz kids got it wrong - has the business to consumer website bubble burst?  They very quickly tell me "Are, but what about business to business (B2B) there is the next growth area."

 

I am very wary now about buying into E-commerce related technology stocks.  Too many are chasing too small a section of the retail section of the market.  Am I a modern luddite?

 

Graeme Martin