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Vision
is Reality
By Michael Alan Hamlin
May 27, 2002
When BayanTrade conducted its first
year anniversary conference last year, it framed the meeting with
the title, "Where Vision Becomes Reality." BayanTrade's
second year anniversary rolls around next month. This year's conference
is entitled, "Vision is Reality." That claim will come
as a surprise to many who have dismissed the once high-flying promise
of e-commerce in the wake of the two-year-long implosion of the
great dot-com circus.
The vast majority of firms that tried to hitch their
fortunes to the dot-com hoopla are long gone. But while they were
disappearing, e-commerce marched on. And this time not because of
orgiastic investors, but because e-commerce enhances competitive
advantage by lowering all kinds of costs and contributes to enhanced
revenues in part because products arrive on time and in the right
quantities.
Globally, an Accenture report forecasts overall business-to-business
(B2B) spending to rocket ten-fold to US$5.582 billion in 2005 from
US$558 million in 2000. This is on the back of similar growth in
business buyers. In particular, small business buyers are likely
to reach 0.37 million in 2004 from 0.04 million in 2000. In the
same period, the number of large business buyers is seen to climb
to 1.33 billion from 0.13 million. That's quite a jump.
That this is happening shows up in BayanTrade's own
recent results (Full Disclosure: BayanTrade is a client of mine.).
For example, value pass through in the first four months of the
year exceeded P2.5 billion, and is equivalent to 45 percent of value
pass through for the whole of last year. Growth in e-bidding - online
auctions - is particularly impressive. In the first quarter of 2002,
the number of bids awarded increased 350 percent - from 33 to 116
- compared to the first quarter of 2001, according to BayanTrade
president and CEO Carol E. Carreon. Value awarded as a result of
successful e-Bidding events increased 480 percent from P250 million
in the first quarter of 2001 to P1.2 billion in the first quarter
of 2002.
The company also saw substantial growth in e-Catalog
purchasing, a process by which buyers purchase materials and supplies
that suppliers list in electronic catalogues. Purchase orders increased
over 900 percent from 1,126 to 10,561 quarter-to-quarter. Over 200
buyers have joined BayanTrade, and the e-marketplace now boasts
over 400 sellers. If present trends hold, the company expects to
realize P10 billion in value pass through for the year.
BayanTrade's success is due, in my view, to a number
of reasons. First, it has constantly tweaked its business model
and organizational strategy. Unlike many e-marketplaces, BayanTrade
focused initially on its fast-growing e-Bidding service because
it can be quickly implemented, dramatically shows the benefits of
e-commerce, and provides instant gratification. Strategically, the
company is growing other services, such as e-procurement and content
development.
Second, BayanTrade was also quick to integrate vertically,
developing e-marketplaces customized to specific industries, including
the construction, electronics, and power sectors. Third, it has
carefully monitored its pricing and revenue structure, fine tuning
it to provide opportunity for sellers and savings for buyers. Fourth,
BayanTrade has consistently developed new value-added services,
such as ERP integration. Fifth, the company has moved aggressively
to expand its community beyond the affiliates of the founding consortium
and their buyers.
Aside from the business model, the company has also
worked hard to communicate what it is doing and the results it is
getting to key constituencies. Those constituencies include buyers
and sellers and potential buyers and sellers, but also media, government,
and other e-marketplaces. As a result, BayanTrade has been acknowledged
to be one of the fastest growing e-marketplaces in the world, and
it's already received a couple of prestigious awards, including
the Intelligent 20 Award and the CIO Asia 100 Award, both regional.
This year's anniversary conference - on June 19, same
as last year - will coincide the Management Association of the Philippines'
(MAP) international conference, which BayanTrade is co-presenting
as part of its anniversary celebration. It's ambitious, but appropriate,
that BayanTrade will be involved in two high profile meetings on
its second birthday. BayanTrade's conference, like the MAP conference,
features some impressive speakers.
First, Robert Kaplan - who will also keynote the MAP
conference - will speak during lunch. Kaplan is the Harvard Business
School professor principally responsible for The Balanced Scorecard
approach to making and evaluating strategy. Also speaking is Sandy
Kemper, a true e-commerce pioneer. Kemper is the founder and CEO
of eScout, an operator of more than 100 e-marketplaces with combined
buyers exceeding 100,000. He's also the chairman of the Global Trading
Web, an association of e-marketplaces worldwide.
Department of Trade & Industry secretary Manuel
A. Roxas II will also keynote a panel on e-Gobyerno. The panel,
which will include speakers from government and the private sector,
will examine the issues involved in making government procurement
transparent, efficient, and scrupulously fair. In all, 30 speakers
and panelists will address participants in three plenary and six
breakout sessions.
Whether you're convinced or not that vision has become
reality, this is going to be a great conference, and a wonderful
anniversary celebration for a company that does the Philippines
proud.
(Michael Alan Hamlin is the managing director of consultancy
TeamAsia and the author of three books on Asian economies and companies.
His latest book is Marketing Asian Places, of which he is co-author.
His e-mail address is mahamlin@teamasia.com)
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