E-MARKETPLACES: Wipro Sees an Opportunity

Post B2C dot-com bust, when the hype was directed at the B2B space, new

economy believers and entrepreneurs undertook the shift and drew business and

revenue models around the new "could-be-profitable" ventures. The

brick-and-mortar companies watched the phenomenon with considerable concern–the

rate at which start-ups were burgeoning was bewildering. The gravest and most

immediate concern was that start-ups were affecting their traditional business

models by setting up e-marketplaces.

A few months down the line, it looks like the Darwinian instincts will

prevail–the brick-and-mortar heavyweights have decided to enter the fray and

set up their own e-market places. And it’s a global phenomenon now. Among the

first mover was the US automotive segment with Ford, GM, and Chrysler setting up

such portals. Others followed.

The potential for B2B e-marketplace is huge and companies are realizing the

same. According to AMR Research, by the end of 2000 about 20,000 companies were

projected to buy products over such trading exchanges worldwide. The numbers are

estimated to jump to 7.5 million companies within the next three years. In

anticipation of the trend being replicated in India, local brick-and-mortar

companies are also contemplating the launch of e-marketplaces.

Wipro’s foray

In India, Wipro has taken a lead by launching its neutral B2B IT portal–01markets.com.

Realizing a huge market potential for IT-specific products and services and

Wipro’s own extensive domain knowledge in the segment, it is positioning

itself as the first mover into the IT e-marketplace domain. Speaking about the

inception of 01markets, Mythili Ramesh, GM, marketing and services, 01markets,

says, "We got the idea in July 99 after realizing that Wipro had a high

domain knowledge which could be explored to the fullest." She adds,

"We felt we were in a good position to avail of this opportunity, given our

background of more than 20 years in the IT industry, domain expertise, technical

knowledge, customer base, process knowledge and a strong brand name."

Agrees Pradeep Kapoor, CEO, Godrej Infotech, "01markets.com has started in

a small way and is gradually strengthening its positioning over a period of

time."

Key components

The company is looking at four key components in its e-market business

strategy–procurement, market-making, content and support.

Like any other e-marketplace, Wipro’s 01markets will also provide

procurement, auctions and support. Though there is not much of a difference with

other IT-specific portals like ITnation.com, 01markets is working on features to

facilitate online and offline purchasing by organizations, by allowing them to

integrate a special requisition process with the site. Other services that the

portal provides, again without much differentiation, are auctions and a reverse

auction facility with market-making services.

These services enable organizations to buy large volumes at competitive

prices through reverse auctions, along with buying advice on comparison of

different products and models through its expertise. Its business associates

include the who’s who of the IT industry like Compaq, IBM, Intel, APC,

Hewlett-Packard, Cisco, Microsoft and TVS Electronics.

However, the big differentiator for a brick-and-mortar company like Wipro is

its huge network of 120 locations and support in terms of after-sales and other

services. The entire post-sales mechanism is supported through its network of

logistics agencies and service providers. There’s also an 8x8 call-center

support to take care of customers during critical periods. The first level of

services will be provided by its call center. Subsequently, engineers will be

available for round-the-clock service over the phone. If physical assistance is

required, the call center coordinates for a service provider to do the needful.

Wipro intends to leverage these services to towards a competitive edge.

Another distinct feature that 01markets is trying to achieve is centered on

its content offerings. At present, the content centers are IT news, technical

information and e-business centers. But the thing that can be of immense help to

CIOs and CEOs will be the e-business center, containing best of case studies and

technical white papers. The technical white papers related to products will be

useful for CIOs and CEOs to evaluate different products. 01markets hopes to

bring in the CIO and CTO to its site and then convince them of buying there.

Wipro can build its own repository with its years of offline experience and this

could something that others would find hard to replicate.

Not to miss the fast-growing SOHO market, Wipro is going the Dell way for its

online brand "NetGenie". The user will get to choose a technically

workable configuration suited to his requirements through a high degree of

interactivity offered at the Web site.

Feasibility

Can all this work for Wipro? The bigger question is whether e-marketplaces

have a promising future, irrespective of a pedigree. The task before the players

is to bring maturity to the Indian market.

Avers Satish Parchure, MD, US Interactive, "The Indian market is not yet

mature and it will take 12—18 months for it to develop from its embryonic

stage, and the business to be full-fledged from these exchanges." Every new

way of doing business calls for a change in the mindset of businessmen. Parchure

opines, "The other issue that needs to be addressed is that of the mindset,

and traditional businesses at the moment are not very open about placing their

bids through these exchanges, especially if their competitor has also procured

from the same exchange. They prefer to place their procurement needs on an

intranet and address their needs accordingly." Then of course, are the

oft-repeated issues of security and privacy. Can Indian e-market players build

confidence among users and build long-term association with their clients?

A DQ report with inputs from Venkatesh

Ganesh in Mumbai