E-business - what's in store for you?

Unfortunately for many of the dot.coms and the paper industry, that vision has not materialized. There are now far fewer public marketplaces serving paper buyers and sellers then there were just a few weeks ago. There are many reasons for this industry-wide shake out, including:

• customers' reluctance to change their buying and selling relationships/habits

• paper companies' decision to launch private portals

• not enough value-added, truly useful news and information or other business resources being offered on the "transaction-oriented" websites

• not enough capital to keep the sites up when sales do not instantly materialize and venture capital starts running out.

We could go on and on listing the reasons why some public marketplaces have failed, but the bottom line is that the role of e-business in the paper industry has dramatically changed. Some of the surviving transaction model public marketplaces are now aiming to be "technology enablers" for private portals run by paper companies. In the meantime, more and more private portals are forming partnerships to offer transactions online, as well as a variety of information resources and business tools.

These private portals offer one-to-one relationships between suppliers and buyers, as well as other benefits. These can include maintaining closer relationships with customers, allowing sales forces to focus on customer service rather than order taking, or offering XML-based open standard technology. In many ways, these private portals are building on the customer bases and relationships that the paper companies have been developing for years.

As they continue to evolve, public portals are providing a platform for diverse buyers and sellers to congregate and communicate, allowing for substantial value creation, as well as making the following benefits available to all:

• aggregation and exchange of real-time, industry-wide information on products, services and trends, which can lead to better buying decisions

• ability to leverage robust technology across many buyers and sellers, allowing for broad participation

• new sales channels and customer base

• variety of value-added services and ASP technologies

• pricing visibility both globally and regionally.

Virtual stores

The one thing that all the surviving public and private portals will have in common is that they will serve as virtual "stores" where customers can shop for specialized resources and services. Despite the recent dot.com shake out, e-commerce is here to stay in the paper industry. Research clearly indicates that by next year 71% of business buyers and sellers will try online marketplaces and the value of transactions will soar to $1.4 trillion by 2004. Although 95% of paper industry managers currently use the internet to look mainly for information, the primary role of the internet will shift from an information source to an actual marketplace over the next couple of years. In fact, we expect that approximately 25% of pulp and paper industry revenues could transact through both private and public portals by the end of a five-year period.

This translates into a lot of "shopping" and "window browsing" at these virtual stores. But what is really going to make e-commerce soar is the creation of a virtual community "shopping mall" where customers can shop at a variety of these private and public stores for a vast array of products and services. As a result, e-business players in the pulp and paper industry are quickly moving beyond simply matching buyers with sellers, and community and content have become the drivers for liquidity in e-marketplaces.

E-commerce platforms need to give users direct access to an extended universe of customers and suppliers to buy from and sell to, as well as a robust suite of products and services that provide useful information and business tools.

The newest e-commerce model - the one that should last - no longer limits its purpose to serving a single niche. It focuses on creating true e-marketplaces with multiple functions, where there is an emphasis on value-added content and the ability to unify fragmented industries - like pulp and paper - by providing the customer with "a one-stop shop" for everything they need to conduct business.

So we are left with the question, where do the dot.coms fit into the future of the paper industry? Put simply, there will not be any dot.coms as we know them today. But there will be a select group of public and private e-marketplaces that offer customers value-added products and services with just the click of a mouse.

Stories

Columns