Reality Check Needed For E-Marketplaces - Trade NZ

Trade NZ Believes Reality Check Needed For E-Marketplaces

Media release 9 May 2001

TRADE NEW ZEALAND BELIEVES REALITY CHECK NEEDED FOR E-MARKETPLACES

New Zealand exporters need to be aware of both the risks and opportunities in the wide range of global e-marketplaces, says Trade New Zealand General Manager Corporate Services Arama Kukutai.

E-marketplaces take many ownership forms and vary in supply arrangements and transactional fees - which makes joining an e-marketplace not just a technology issue but a business decision, says Mr Kukutai.

Trade New Zealand sees it has a role to facilitate the entry of New Zealand exporters into overseas e-marketplaces.

"Our core competence has always been to be the experts on markets. E-marketplaces are no different. The issue here is that the e-business space has been over-hyped. Our mission is to reduce the hype," says Mr Kukutai.

As an example of the volatility of the e-market space, Mr Kukutai says he detailed two high-profile e-markets Trade New Zealand had investigated last year at a presentation to a marine industry conference last month. "Despite significant resources being dedicated to the launch of these organisations, and a lot of noise in the market, one has already gone bust, and the other is looking decidedly shaky," says Mr Kukutai.

"When you're having to contend with a range of e-marketplaces with different fee structures on offer, with a limited ability to check out who is behind the market and what credibility they have, you face considerable risk," says Mr Kukutai. "It's important to place your investment in a way that maximises your returns over a period of time."

The food and beverage industry is one area where Trade New Zealand is working with consortium partners to identify e-marketplaces offering opportunities for exporters into Australia.

"The food and beverage industry is one of the major areas of export strength in New Zealand," says Mr Kukutai. "Even in a mature industry like that we believe there are opportunities for niche marketers as well as major operators." The food and beverage industry is a natural early adopter of digital marketplaces, because of its traditional reliance on markets, says E-business Development Manager for consortium partner Telstra Saturn, Don Guthrie.

"The marketplace model is proven in food and beverage trading," says Mr Guthrie.

US-based research company Gartner Group identifies 1,400 e-marketplaces around the world, and says this number is growing rapidly. However, Gartner expects that only about 300 of these will survive long-term.

"One of the challenges for exporters is determining where and when to get involved," says Trade New Zealand's Mr Kukutai. "We are working with our consortium partners to identify and verify the marketplace opportunities that are real for exporters today."

A prominent e-market in Australia is CorProcure.com.au, which is backed by Australian supermarket giant Coles Myer, along with 14 of Australia's largest multinational companies.

"This shows that major food buyers are making a commitment to e-markets to manage their supply relationships," says Mr Kukutai. "While success is not a given, the scale of the commitment means this initiative deserves serious consideration by New Zealand suppliers," he says.

Trade New Zealand's consortium partners bring a wealth of experience in e-business to the New Zealand export industry. They are led by KPMG Consulting and include Telstra Saturn, Microsoft and Cisco Systems.

"Our consortium partners are already involved in about 100 marketplaces around the world," says Mr Kukutai. "They have particular expertise in the operation and development of marketplaces. Our own expertise is a pragmatic understanding of trade."

For more information: Arama Kukutai General Manager Corporate Services Trade New Zealand Tel 09 915 4200

Distributed by Tracey Palmer, Trade New Zealand, Communications, tel 09 915 4223 or 021 498 155

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