Electronic Marketplaces: the View from Canada* Electronic Marketplaces: the View from Canada

This paper provides a first view of electronic marketplaces in Canada. It begins by reviewing the relevant literature and then goes on to present preliminary evidence from a continuing study. Forty electronic marketplaces are identified and characterized in terms of scope, type, establishment and location. Twenty-nine are Canadian-owned or operated and 11 have either US or international ownership, but significant Canadian company participation. The findings are discussed and a number of conclusions drawn that seem to hold for Canada and may apply in other countries with small and open economies. Introduction In the late 1990s and early 2000, many companies formed or joined electronic marketplaces (e-Ms). Although many e-Ms have failed to become economically viable or have ceased operations, others are still being formed, suggesting that innovation regarding electronic market mechanisms is still in its early stages. For several reasons, this paper looks at e-Ms from a Canadian perspective. First, since almost all of the discussion on e-Ms has focused on the situation in the US, additional viewpoints are needed to gauge the implications of e-Ms for small, open economies, such as Canada. Second, the US is by far and away Canada’s main trading partner and changes in economic conditions or business behaviour in that country usually have repercussions in Canada. The projected shift to e-Ms in the US is such a major development. Third, it is important for Canadian companies to appreciate opportunities that may exist via e-Ms in the broader international arena. This paper is a first effort to understand the scope and extent of electronic market usage in a small, open economy, that of Canada. It begins with a brief description of developments in e-Ms and then reviews relevant theoretical literature. Attention then turns to the Canadian experience. Patterns of e-M establishment in Canada are summarized and the paper concludes with some comments on the implications of eMs for Canada. Electronic Marketplace Developments A large number of forecasts have been made in recent years about the extent to which B2B trade will move online and the share that will be accounted for by e-Ms. In the US, a report by Jupiter Communications estimates that online B2B trade will amount to $6 trillion by 2005, or 42% of total B2B non-service spending. At present, direct channels dominate online B2B trade.