The Evolution of an Electronic Trading Community: The Case of the Electrical and Electronics Industry of Southeast Asia

We examine the evolution of an electronic trading community over the Internet on the basis of the case study of two B2B (business-to-business) exchange operators for direct materials in the electrical and electronics industry of Southeast Asia. We identify three distinguishable stages in the transformation of the third party electronic trading community. We also observe that there are two types of online trading community formation at different stages of the third party community evolution: Buyer-driven community formation and supplier-driven community formation. In the end, however, some buyers left the third party community to build their own private electronic trading communities by developing their own in-house systems. In this study, we explain the evolution of the third party community and propose a framework of buyers' community movement. The buyer's decision whether to move to the private community or to remain in the third party community should be made based on what the company expects from the B2B exchange system.