Improving the e-Commerce Guarantee System for Reinforcing the Efficiency of Purchasing in SMEs : A Case Study on a Guarantee Insurance Based eMarketplace

eNtoB, an MRO e-commerce company, launched Ubinova in 2007, a unique B2B e-marketplace selling raw materials to SMEs with e-Biz guaranty insurance of Seoul Guarantee Insurance. But Ubinova got into big trouble in 2008 due mainly to the surge of customer bankruptcy. This study analysed Ubinova business to find out two most critical problems of the service, which were loss of demand aggregation and adverse selection. The author analysed the causes and consequences of the problems and studied some ways to overcome those problems. Specifically, using a theoretical model on the development path of e-market the author searched for the long-term directions to follow to improve the business performance. Also through comparing the private company initiated Ubinova service with the public institute initiated e-commerce guarantee service of Korea Credit Guarantee Fund, the government sponsored fund, the author evaluated the value and the meaning of Ubinova. The author concluded that the e-commerce guarantee service of Korea Credit Guarantee Fund had only focused on the financial support to the SMEs and caused little improvement of SMEs' competitiveness by failing to save cost of purchase. The study suggests to introduce a new policy to induce the cost saving of purchase by combining the guarantee fund application and registering the standardized purchase items.