What is an e-market or electronic market place?
E-Market is Electronic markets (or electronic marketplaces) are information systems (IS) which are used by multiple separate organizational entities within one or among multiple tiers in economic value chains. In analogy to the market concept which can be viewed from a macroeconomic (describing relationships among actors in an economic systems, e.g. a monopoly) as well as from a micro economic (describing different allocation mechanisms, e.g. public auctions of telephone frequencies) perspective, electronic markets denote networked forms of business with many possible configurations:
First, the topology of electronic markets may be centralized or decentralized in nature. Centralized electronic markets are hubs which often provide services to their participants. Decentralized settings involve sequential relationships within value chains which often are found when electronic messages are exchanged directly between businesses (electronic data interchange, EDI).
Second, the services provided by electronic markets may serve infrastructural or allocation purposes. Among the infrastructure services are routing, messaging, identification and partner directories whereas allocation services enable pricing process which in turn may be static or dynamic in nature. Typical implementations are catalogs, exchanges and auctions.
Third, the relationships of actors involved in electronic markets may be stable or atomistic in nature. The former usually refers to classical supply chains where business collaborate during a longer period of time. In the latter case, the transaction partners are only stable for a single transaction. This is usually to be found in auction and other exchange settings.
This leads to two definitions: In a narrow sense Electronic Markets are mainly conceived as allocation platforms with dynamic price discovery mechanisms involving atomistic relationships. Popular examples originate from the financial and energy industries. In a broader sense, price discovery is not critical for electronic markets. This covers all forms of electronic collaboration between organizations and consumer as well as vice versa.
company websites that serve communication and transaction purposes electronic purchasing systems on EDI-basis as well as based on catalogs systems that support the configuration of products, such as car configurations automated download of product information based on the scan of an article number activation of an emergency chain based on the monitoring of heart frequency social networks that link consumers, such as recommendation communities.
Impacts on business efficiency
Electronic markets are attributed important impacts on business efficiencies. From an industry perspective, transaction cost economics were used to illustrate the relationship between electronic markets and electronic hierarchies. While the former are in line with the narrow electronic markets definition, the latter are also included in the broader definition. This may be explained since in reality electronic markets have emerged as platforms which combine several modes of governance or types of coordination mechanisms. These “all-in-one-markets” link the possibility of competitive bidding for price discovery with the advantages of a predictable relationship to encourage relationship specific investments (non-contractible issues) and functionalities for closer collaboration. This perspective shows that it is important to distinguish between the market platform itself which creates an infrastructure between multiple parties and the coordination mechanisms operated on this platform which might be market-like or hierarchical in nature.
Types of e-market place?
There are many different types of e-marketplace based on a range of business models. They can be broadly divided into categories based on the way in which they are operated.
An independent e-marketplace is usually a business-to-business online platform operated by a third party which is open to buyers or sellers in a particular industry. By registering on an independent e-marketplace, you can access classified ads or requests for quotations or bids in your industry sector. There will typically be some form of payment required to participate.
A buyer-oriented e-marketplace is normally run by a consortium of buyers in order to establish an efficient purchasing environment. If you are looking to purchase, participating in this sort of e-marketplace can help you lower your administrative costs and achieve the best price from suppliers. As a supplier you can use a buyer-oriented e-marketplace to advertise your catalogue to a pool of relevant customers who are looking to buy.
Also known as a supplier directory, this marketplace is set up and operated by a number of suppliers who are seeking to establish an efficient sales channel via the internet to a large number of buyers. They are usually searchable by the product or service being offered.
Supplier directories benefit buyers by providing information about suppliers for markets and regions they may not be familiar with. Sellers can use these types of marketplace to increase their visibility to potential buyers and to get leads.
Vertical and horizontal e-marketplaces
Vertical e-marketplaces provide online access to businesses vertically up and down every segment of a particular industry sector such as automotive, chemical, construction or textiles. Buying or selling using a vertical e-marketplace for your industry sector can increase your operating efficiency and help to decrease supply chain costs, inventories and procurement-cycle time.
A horizontal e-marketplace connects buyers and sellers across different industries or regions. You can use a horizontal e-marketplace to purchase indirect products such as office equipment or stationery.