Half of the electronic marketplace providers in Asia will be out of business in the next 12 months, according to Internet consulting company Gartner CMO Asia Pacific. The failure of those e-marketplace companies would take place against the backdrop of an Asian market that would be worth an estimated US$1 trillion by 2004, the Telecoms Infotech Forum was told yesterday. Gartner research director Lane Leskela said: 'There is going to be a 50 per cent failure rate amongst the Asian e-marketplaces.' Mr Leskela said the companies that would take advantage of the growing business-to-business market would already be successfully selling products offline. The application service provider (ASP) model of business-to-business e-marketplace, the favoured approach for Asian start-ups, was a 'complete fantasy', he said. 'What will work is vertical private collaboration between buyers and sellers. Horizontal, public platforms - like the ASPs - will not work.' A successful e-marketplace would integrate services for collaboration, relationships and integration of business processes in order to help reduce costs in the value chain. 'It is extremely difficult to manage that,' Mr Leskela said. 'But look at how companies in Asia are modifying their back-end to be more efficient. 'It is going to be companies like [exporter] Li & Fung that will be successful.' One Hong Kong-based executive of a United States software house who attended the forum said: 'I think a lot of the ASPs and business-oriented portals that are in existence now will have a difficult time in the market going forward, because their model does not work. 'The major problem is that their offerings are often too shallow in focus and don't offer the very specific services - often linked to specific product lines - that most companies want.'