E-marketplaces are designed to create win-win situations for one and all. Yet the idea of a completely open trading platform has turned a lot of potential players off. One of the major European e-marketplaces, Efoodmanager.com, says its clients have insisted on private marketplaces. Bernice Hurst analyses the Efoodmanager offering.
In any industry, harnessing the Internet to introduce buyers to sellers who might otherwise not get together can never be bad. As Björn Hegner, Director e-Marketing at efoodmanager.com says, “the biggest value we offer to new members is that they can see instantly who offers what – and at what prices.”
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In what has rapidly become a very crowded marketplace, those who are migrating from being wholly open trading places to offering the choice of participating in either public or private platforms, are looking more likely to survive.
Hegner points out that although it was not their original intention, “we have been asked by more and more companies to design their own trading places where they can build relationships between buyers and sellers rather than standing exposed in an open area.” While the basic concept for online auctions and exchanges was precisely one of openness, it is now being fine-tuned in order to sort the serious players from the window-shoppers.
Nicolas von der Schulenburg, Investment Manager at 3i, believes efoodmanager “will become the default e-commerce solution provider for the European food industry.” Using enfinity software from its strategic partner, Intershop, enables efoodmanager to offer packages unique to the industry. The companies are developing innovative b2b applications jointly and separately as well as providing bilateral support in consulting, acquisition and sales. “Together,” says Intershop founder and CEO Stephan Schambach, “the food business can achieve considerable savings in cost and time.”
efoodmanager intends to be “Europe’s number one e-marketplace for the food industry…seamlessly integrating all possible value-added services into the online trading process.” The product range covers fresh products, convenience and finished goods. The service range includes logistics, financial services and industry-related information. There are currently 1500 registered users from across Europe, representing manufacturers, retailers and wholesalers.
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Founded in January 2000, six months later efoodmanager launched its platform, designed to focus on the procurement needs of supermarkets chains, food e-
tailers, producers and bulk buyers in Germany, France, UK and Spain. It claims to be the first pan-European one-stop-trading shop for the entire food industry. Recently, in keeping with its plan to improve efficiency and software, an additional €15m was raised as investment capital from a consortium led by 3i. The funding will be used for technology development and to further expand existing operations.
One thing which helped efoodmanager’s credibility was bringing in Joel Oberman as Chief Executive Officer. Oberman’s experience as European Regional Director for Kellogg, and earlier global and European management roles with PepsiCo, Campbell Soup and Häagen-Dazs, added weight to the original team. Jan Stenger, co-founder and Chief Strategy Officer at efoodmanager explained that “Joel brings exceptional experience to the board in delivering high value to customers, employees and shareholders within the worldwide food industry.”
Open and scaleable
In addition to the open trading platforms set up initially, efoodmanager now develops, specifies, implements and runs extranets, b2b marketplaces and auctions, positioning itself as the leading e-commerce solution provider for the European food industry. One key player taking up this service is markant.net whose extranet will go live in Autumn 2001. Henry Taubald, Managing Director of Markant Handels und Service GmbH, described the system as “extremely open and scaleable. It allows all existing IT solutions to be integrated and the entire purchasing process to be optimised.”
Setting up private company sites will provide an important revenue stream. Hegner maintains that this side of the business is being developed in response to clients’ requests. “They are coming to us for e-commerce solutions, not just as an open marketplace. We have the skills to build whole systems, dedicated to individual company requirements.”
Other obvious advantages offered by online trading exchanges are finding quick ways to shift stock that needs to go urgently, finding the best supplier or price for something that you need to purchase and finding the widest number of quotes to compare. All for minimal cost, never moving from the office, in the shortest imaginable period of time.
Inevitably, this is an idea that has occurred to many people and, as a result, there has been a huge amount of competition. B2Bbusiness.net cites no fewer than 89 food- and beverage-related exchanges. Some are sector-specific, others are aimed at the hospitality industry and still others concentrate on equipment and supplies.
Agribuys staying plural
Just as inevitably, the number actively trading is gradually being whittled down. Bill Kuckuck, Senior Vice President of Agribuys, believes that “being-sector specific is perceived with mixed reactions. Some people prefer to deal with specialists in their own niche area but, commercially speaking, those exchanges trading in a broad range of products are proving more successful.”
The cost implications, and the intense competition, are not necessarily deterring participants. All 1500 of efoodmanager’s registered users were advised, from the outset, that trading would be free for the first year only. From May 2001 subscriptions will be introduced, based on ‘one package for all.’
“In this way,” says Hegner, “confidentiality can be assured. There won’t be any commission or further fees to pay for trading and efoodmanager will have no involvement in individual negotiations or transactions.”
The emphasis on confidentiality is crucial to the business’ integrity, according to Hegner. From the time companies enquire about participating, their references and finances are checked. There is even a verification process to ensure that the particular individual representing the company actually works for them.
A list of variables for customers to check, for example documentation and background information regarding product definitions and traceability, is also provided in order to pre-empt problems and complaints. Every assistance is given to ensure that the right questions are asked in advance of transaction.
Although the quality of individual products cannot be guaranteed, company checks and tracking of complaints goes a long way to ensuring that problems are identified and dealt with. “If we cannot be trusted by our clients, then our business will not grow,” declares Hegner.
Empowering members to conduct business transactions more easily than ever before is efoodmanager’s avowed goal. Whether done in a public forum or through a system of private exchanges, they are on track to providing a full portfolio of services and choices to the industry.
By Bernice Hurst, just-food.com correspondent
