E-whiz urges B2B speed

By RICHARD BRADDELL

Speed counts and the early mover's advantage could prove critical to success for an increasing number of business-to-business electronic markets and exchanges.

The electronic commerce director of North American foods giant Kraft, David Hutchings, says early positioning by exchanges is vital and they must not only create liquidity by having multiple suppliers, but also by connecting with other exchanges.

Kraft is one of the foundation investors in Transora, an exchange which was developed by 54 leading US consumer companies at a meeting in New York last March and is expected to go live soon.

To date, it has attracted more than $US238 million ($560 million) in equity and is now looking to the Asia Pacific region for more investors. It is likely to establish a regional office in Singapore.

Operating from an Ariba platform, IBM and i2 Technologies, Transora will use open technologies, enabling any supplier or purchaser to join.

Speaking at the EAN conference in Wellington, Mr Hutchings said exchanges such as Transora would bring suppliers and buyers online to an extent that had eluded electronic data interchange methods that were common before the advent of the internet.

He expected 75 per cent of a total B2B market of $US20.9 trillion in 2010 would be conducted through e-markets. But while he believed the number of e-marketplaces would grow to between 6000 and 10,000, he expected that number would collapse back to possibly two or three.

While Transora was initially conceived as a B2B procurement exchange, it was now looking to offer a wider range of transactions, processing and logistics.

It would earn revenue from subscription and transaction fees and possibly from providing back-end facilities to users. Mr Hutchings said four or five pricing models were likely.