Hub Sites Will Drive E-Commerce

Hub sites, also known as “virtual malls,” “intermediaries,” and “digital middlemen,” will increase in size, number, and marketing clout over the next several years, according to the eCommerce B2B Report ^TM by eMarketer.

By the year 2002, eMarketer predicts, hub sites will act as a funnel for $18.8 billion, or 40 percent, of total consumer e-commerce spending. Currently, 15 percent of total consumer online sales are captured by hub sites, the report stated.

“This is not the age of dis-intermediation, but of hyper-intermediation,” said eMarketer’s Geoff Ramsey. “Aggregators add value to the online purchasing experience by offering unprecedented levels of customer choice, service, and convenience. They also inject a layer of trust in an otherwise new and scary environment.”

According to eMarketer’s report, while the amount of revenue captured within the hub environment will balloon from $1.1 billion in 1998 to more than $18 billion in the year 2002, referral fees and commissions earned by hubs will, as a percentage of the total, shrink from an average of 8 percent in 1998 to 4.9 percent by 2002.

“The key dynamic with hub sites is momentum,” Ramsey said. “Once the aggregator gathers a critical mass of buyers, sellers, and other participants in the supply and delivery chain, more and more of these players will flock there because that’s where the action is.”