B2B e-commerce shows tremendous growth rate due to internet`s usage as a common protocol. Since the most evident reason for firms to participate B2B exchange is its ability to forming critical mass and resulting economies of scale, independent agents ...
B2B e-commerce shows tremendous growth rate due to internet`s usage as a common protocol. Since the most evident reason for firms to participate B2B exchange is its ability to forming critical mass and resulting economies of scale, independent agents perform market-maker`s role as they have technological standard of internet exchange. Recently, however, B2B exchanges(or e-market place) operated by independent agents have serious performance problem. The author finds reason for this downturn from the emergence of hybrid market formed by alliances of small number of firms. In fact, from the perspective of the transaction economics theory, there is not much incentive to set up hybrid market. But the emergence of hybrid market reflects the fact that firms start to use internet to such strategic purposes of customer relationship management, vertical integration and supply chain management.