SESAMI.COM: Focus on E-market Value-adds

"Unlike the Asia-Pacific verticals targeted at consumer goods, health care, chemicals, construction and electronics, the Indian operation will focus on automotive, telecom and chemicals" –Seetoh Hon Chew MD, Sesami.com, IndiaAn
IDC survey has estimated the e-commerce market at $2.4 billion by 2004. Gartner
is much more optimistic and places global e-commerce at $7.7 billion by the same
year. Another IDC survey of 10,673 global companies showed that 65% had their
Web sites but only 30% could actually do business.

All these figures speak one word–opportunity. There is a
huge potential for any company trying to cater to the enablement market. But
when even a non-IT company like Singapore Telecom (SingTel)–through its
subsidiary, Sesami.com–decides to provide e-enablement services, the potential
of this market can well be gauged. Singapore-based Sesami.com was established in
September 1999 with SingTel holding about 89% in the company. The Overseas Union
Bank holds 10% while the balance is held by Eastman Chemicals. Sesami formed a
JV with HDFC group for its Indian venture launched in mid-2000. The Indian
partner holds 40%, while Sesami holds the balance in the $4 million venture.

Business model

Currently the company provides a gamut of services including
e-procurement, auction services and Internet market maker solutions for setting
up industry portals or one’s own tailor-made e-marketplace. Other revenue
components include maintenance revenue, hosting and content management fees.
Comments Poh Mui Hoon, MD, Sesami.com, "Our business model is based on
ground realities and not on the dot-com hype."

However, in the coming years, it expects to earn a major
chunk of revenues as transaction and subscription fees from its trading portal
and other vertical portals.

As part of its strategy in the Asia-Pacific market, the
company intends to focus on five key vertical marketplaces–consumer goods,
health care, chemicals, construction and electronics–and build portals around
them. The company has planned e-communities for these five verticals along with
the partners and members in the respective segments. The first of these portals,
ChemX, catering to the chemical industry, is up and running and others are being
planned. The company’s tie-up with US-based Eastman Chemicals has helped it
gain expertise in chemicals and it intends to move on to similar models for its
other target segments.

The revenue model being one of the usual concerns of any
dot-com, Sesami has strengthened itself with multiple streams of revenue.

India a key market

In India, Sesami will earn revenues by implementing its e-biz
portfolio of solutions. However, unlike the five verticals that the company
intends to target in the Asia-Pacific market, here Sesami wants to cater to
three key vertical segments–automotive, chemicals and telecom. According to
Seetoh Hon Chew, MD, Sesami.com, India, "Looking at the maturity of the
Indian market, we think that these segments will give us ample opportunity to
grow."

Within four months of its launch, the company has already
completed a chemical e-marketplace for its first customer, MegaVisa. Besides,
the company is implementing another solution for its JV partner–HDFC Bank. But
the real meat for Sesami.com in India is the huge customer base HDFC can provide
for the company. In addition to this, it intends to leverage on its SingTel
connection. SingTel has already made substantial investments in the Bharti group
and Sesami is in talks with Bharti for a telecom portal. Seetoh adds, "We
intend to leverage our SingTel parentage for some big clients in the
country." The company has important plans of bringing core development to
India. India would also be the choice for setting up a regional operation hub
for south Asia. Another plan, which depends on the market response in India, is
to set up data centers in the country. The company expects as much as 25% of its
overall business from India in the next 3—4 years.

The difference

With 1,300 active partners and business transacted worth Singapore $550 million per month, Sesami is positioning its trading portal Sesami.net as a key differentiator in its e-enablement offeringUnlike
other e-business solution providers whose roles end after providing the
solution, Sesami goes a step further. It is positioning itself as a complete
end-to-end service infrastructure provider and aims to become the ‘thought to
finish’ solution-cum infrastructure provider. Going beyond just solutions,
Sesami will provide other value-added services like logistics, data hosting,
content management and payments. For example, its tie-up with HDFC bank and
TradeCard helps Sesami in providing payment and financial services, and trade
financing arrangement for its customers. Its alliance with BDP enables a total
logistics solution for its customers and Sesami.net customers. Similarly, for
content management it will utilize its association with Standard & Poors and
ZDNet Asia. Hoon comments, "If you look at the competitive scenario, none
of the other players have an end-to-end offering in the sense that we are both
solution providers and operators of the infrastructure." Adds Seetoh,
"With Sesami we are just one brand, we have the content, we are the SI, the
solutions–all in one place."

Another key aspect is the access it provides to Sesami.net,
its own Asia-Pacific trading portal. Currently the portal has about 1,300
trading partners like SingTel, Dell, Epson and HP across Asia-Pacific, and it
processes goods worth Singapore $550 million per month. Apart from the portal
specific to Asia-Pacific, the company has tied up with Commerce One’s global
trading Web, a network of interoperable portals across the world. This will give
its partners and members a global reach. Hoon comments, "The global trading
Web gives our members and partners access to about 33 market places." The
company is in talks with another company that will give it access to
e-marketplaces, like Ariba.

High aims

The company aims to be among the top three B2B portals in
Asia. This could be possible given its association with SingTel, and the doors
it can open to Sesami.net. The company has completed an e-procurement project
for SingTel. With the Eastman Chemicals tie-up, it has already set off in one of
its five key target segments–chemicals. The company intends to move into other
areas on a similar partnership model. The value addition the company is
providing in terms of logistics, content management, data centers, a ready
Asia-Pacific trading portal in Sesami.net and connectivity to global
e-marketplaces, could well give it the needed edge.

YOGRAJ VARMA
in Singapore

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