More sophisticated online service, often linked to a payment system, created virtual marketplaces in sectors such as textiles, electronics, auto parts, even energy and bandwidth trading. while these players had less potential for growth, and were sometimes just extensions of existing offline businesses, they represented the transactional revenue streams that Alibaba was eager to tap. Alibaba managers did not expect online transactional for another 18-24 months, and instead expected other revenue streams to sustain the firm. Players such as Bexcom.com and Portportals.com focused on the technology-backed service that vertical exchanges were trying to integrate into their sites. Alibaba managers knew that the way in which the transactional and logistics market developed would seriously affect the viability of revenue model of vertical exchanges.
Most of China's B2B exchanges were run by third parties, outside of the supply chains they helped to facilitate. However, the sophisticated buyer-driven procurement sites created bymultinational companies had a strong hold on the major Chinese suppliers and were beginning to open up to smaller suppliers. Joint ventures were being initiated to expand the buyer-driven market into a profitable sector.
analysts doubted the buyer-driven market's ability to capture enough volume to viably compete with third party exchanges. Their sophisticated software system were a deterrent on the supplier side and a lack of openness was a deterrent on the buyer side. At the same time, buyer-driven ventures had attracted the attention of antitrust bodies around the world.
Finally, a market shakeout among B2B firms was expected to prompt a wave of mergers, bankruptcies, and downsizing as too many players courted the same fickle e-customers.