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The eMarket Services project

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What is e-business?

E-business is a general term that means that the business is done by communication from one computer to another, and usually through the internet.

E-business definition:A collaborative business and trade development process conducted electronically within a company and between business partners.

It refers to any kind of information exchange, service and transactions, undertaken through ICT-enabled networks.

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Why use e-business?

Electronic business (e-business) is increasing

and can be an interesting alternative or supplementto "normal" business that is done with direct contact between the buyer and seller

– especially for companies that export and therefore do business over a long distance.

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A B2B Electronic marketplace

Business to Business (B2B) or Business to Government (B2G)

Open to several buyers and sellers

Does not itself sell or buy goods or services

Must have at least one trading function

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Purchasing processes

Companies use a more complex buying process than consumers

E-marketplaces support the purchasing process used by companies

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Why use e-marketplaces?

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Results from using e-marketplaces for international business

A study conducted by eMarket Services among SME’s that use e-marketplaces to do international business shows that:

Only 5% use e-marketplaces for international business

However among those that DO:

64% shows increased international sales

74% see increased economic results

86% want to continue using e-marketplaces for international sales

Source: eMarket Services (http://tinyurl.com/yg7cv7s )

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Advantages of using e-marketplaces

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Source: case studies interview - eMarketServices

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Were the advantages realised?

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Source: case studies interview - eMarketServices

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What are e-marketplaces?

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Types of e-marketplaces

E-marketplaces can be categorized according to many attributes:

• Buyer or Seller centric

• Horizontal or vertical

• Closed or open

• Regional or global

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Buyer-centric

On a buyer-centric e-Marketplace, the e-Marketplace implements software that supports the procurement process.

The catalogue contains information from a set of suppliers and aggregates these into a single internal catalogue that makes it easier to find and compare the products offered.

Quadrem: Buyer-centric

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Advantages of buyer-centric

Tight control over the procurement software, catalogue data and processes

Highly customised solution to meet the buying organisation's needs

Procurement solutions can be fully integrated into the buying organisation's financial management system to automate the procurement process

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Advantages of buyer-centric

For buyer:

• Offer the most procurement functionality

• Lead to fast and easy product search and selection.

• Access to multiple suppliers' offerings

• Can usually do price comparisons.

For suppliers

• The costs of participating in these systems are generally low

• There are no transaction fees

• Require little investment to participate.

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Disadvantages of buyer-centric

A closed purchasing environment, allowing suppliers to trade only with the central buying organisation.

Higher system maintenance costs for the buyer, but generally catalogue maintenance (updating items, prices and availability) can be done by sellers, with the updated data provided to the buyer.

Issues can arise as to the currency of data, stock availability etc, when suppliers do not have direct control over items listed in the buyer's catalogue.

High up-front investment for the buying organisation.

Suppliers wishing to move to on-line trading may need to accommodate a number of different systems used by their customers, increasing costs and complicating content management.

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Seller-centric e-marketplaces

On the seller-centric e-Marketplace, the suppliers present themselves and their product catalogue.

The buyers browse the catalogues, make requests and place orders.

Mercato

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Advantages of seller-centric

For buyers

• Low investment cost

• Some sites are aggregated into virtual e-malls to reduce the need to search many different sites

For suppliers

• Optimal in terms of control, cost, maintenance and functionality, but their customers need to know where to find them so their use may be limited.

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Disadvantages of seller-centric

Suppliers' sites provide only limited support for the buyer's purchasing process, typically only the ability to browse catalogues and place orders.

Buyers lose control over catalogue data.

Support for pre-arranged contracts may be limited.

Buyers must access each supplying organisation's system individually, and only one supplier's catalogue can be accessed at a time.

Buyers must learn to use multiple supplier systems and manage multiple access right details (e.g. user-name and password).

Buyers must know where to find the site.

Integration into financial management systems at the buyer's end may be very difficult.

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Vertical e-Marketplaces

A Vertical e-Marketplace addresses the needs of a particular industry, such as the chemical industry.

It links buyers and their suppliers and often have other industry related services, such as industry news and newsletters, information about commodity pricing and may even host industry specific events.

Vertical e-marketplace: Fordaq

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Horizontal e-Marketplaces

The Horizontal e-Marketplaces covers a wide range of industries, and are mostly trading MRO (Material, Repair and Operations) products, as opposed to strategic products that are used in the production.

A horizontal e-Marketplace will focus on a set of trading functions (such as catalogues or auctions) or the needs or companies in a particular region and attempt to offer the best function or the most complete coverage of that regions needs.

Horizontal e-marketplace: Gophatdat

Horizontal e-marketplace: Elance

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Closed and open e-Marketplaces

Some e-Marketplaces are closed and require an invitation to join.

Usually this invitation is given by the buyer and extended to its suppliers.

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Regional and global e-Marketplaces

Many products cannot easily be sold to any region.

Many public procurement sites have a regional focus

Some e-Marketplaces also have a focus on a small region to help develop the suppliers and producers of that region.

Regional e-marketplaces are only available in the language of the region

Regional e-marketplace

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Trading functions

In order to promote business, the e-Marketplace needs to have at least one Trading Function:

• Online directories

• Catalogue

• Classified ads

• Online order

• Request for Quotation/Proposal/Bid (RFQ, RFP, RFB)

• Auctions

• Reverse auctions

• System integration

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Elements of supply management

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Online directories

Online directories are databases of companies.

Buyers can find new suppliers and suppliers can get leads.

Buyers can search by products or services, by region or by company.

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Catalogue

A catalogue is list of products and services offered by the sellers.

Some catalogues list product information on a general level, others are very detailed.

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Classified ads

Classified ads display offers of specific products for sale or wanted by a buyer.

The ads are sorted by the type of product, brand or company.

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Online order

"Online order" is when an order can be placed online for the articles listed for sale in a catalogue or classified ad.

Orders to various sellers can in this way be placed directly on an e-Marketplace.

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Request for Quotation/Proposal/Bid (RFQ, RFP, RFB)

"Requests for Quotation/Proposal or Bid" are usually an on-line form where the seller or buyer sends a request to sell or buy a product.

The RFQ/RFP/RFB function can be used to request a price or proposal on a product

The request is typically sent to the trading partners by email to be answered.

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Auctions

In an auction, a specific product or a specific quantity of products is being placed for sale.

The auction starts and ends at a pre-set time. Buyers can then submit bids during that period of time.

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Reverse auctions

"Reverse auctions" are also called sourcing auctions or buyers' auctions, help buyers to find the cheapest supplier for a contract.

Within the auction the potential suppliers submit offers, lowering the selling price for each submitted bid.

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What is eMarket Services?

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Are the companies using e-business?

http://www.ecommerce.ac.uk - Commerce in Welsh SMEs: The State of the Nation Report 2003/2004

54% 37% 7%

Only 7% of the SMEs use advanced e-business solutions like e-marketplaces

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eMarket Services – The portal

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eMarket Services

eMarket Services is funded and operated by the trade promotion organisations of Canada, Norway, Spain and Mexico.

The eMarket Services is a non profit project and serves to help our companies to expand their business.

Our mission is to make it easier for companies to use e-marketplaces to find new customers and suppliers for their international business.

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eMarket Services – News

eMarket Services publishes monthly newsletters

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Knowledge: The Handbook

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The Handbook on how to use e-marketplaces is available in English, Spanish and Norwegian

eMarket Services produced the training course on how to use e-marketplaces for online export for the International Trade Centre (ITC)

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The directory – all e-marketplaces

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The directory – agriculture e-markets

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The directory – e-marketplace details

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For more information

Please visit: www.eMarketServices.com