E-bidding to grow 25-fold in 2004

Electronic-based bidding will grow 25-fold by 2004, and will be global in reach for most firms, according to a recent Forrester Research report. In the Philippines, over 1,100 companies regularly initiate or participate in online auctions through BayanTrade and that number is growing rapidly as e-Bidding evolves, according to company executives.

"e-Bidding is evolving in three ways," said BayanTrade president and COO Dante Briones. "The kinds of products and services, the buyers themselves, and the e-Bidding services we offer are all changing."

In a recent speech before participants to the Asian Procurement Conference 2002 in Singapore, Briones said that "in the beginning e-Bidding involved very simple items like office supplies and computers. Now we bid more complex items like industrial transformers and construction of large buildings and warehouses." By complex, Briones said he is referring to items which can be provided to customers with a wide range of variety in specifications, such as the construction of an entire building. The increase in complexity has been accompanied by expansion of products and services being offered and purchased through e-Bidding.

"Our e-Bidding service now offers a wide variety of commodities in categories such as construction and manufacturing components, office equipment, computers and communications accessories, consumer electronics, furniture and appliances, fuels and lubes, cleaning equipment, transportation components, clothing, safety equipment and supplies, containers and packaging materials," he added.

Briones also said that growth in the complexity and volume of commodities reflects the local acceptance of e-Bidding as a routine business process.

BayanTrade reported that e-Bidding value pass through (VPT) — the value of all e-Bidding transactions awarded — for the first three quarters of the year was 93 percent of total e-Bidding VPT for 2001. Net revenue from e-Bidding, however, doubled in the first three quarters over the same period in 2001, according to Briones. The company expects a strong fourth quarter, suggesting a substantial year-on-year increase in e-Bidding VPT and not revenue.

According to Briones, this growth reflects changes in buyer profiles as the number of buyers and sellers has increased. At present, over 1,200 suppliers regularly participate in BayanTrade’s e-Bidding events. Briones said that the acquisition of a number of Industry specific, or vertical buy-and-sell portals, has contributed to growth in e-Bidding. BayanTrade currently hosts the Semiconductor and Electronics Industries of the Philippines (SEIPI), the Construction Vertical of the Philippines (CVP) and the Asia Pacific Utilities Group (APUG) portals.

"We have also signed a Memorandum of Understanding with the Bankers Association of the Philippines (BAP) to host a financial portal," said BayanTrade vice chairman and CEO Carol Carreon. Carreon leads the company‘s efforts to recruit additional industry verticals to the e-Marketplace.

BayanTrade’s initiatives aimed at making e-Bidding simple and low cost have also been a factor in growing the number of suppliers. BayanTrade’s e-bidding director Cherokee Chamorro said the company offers free access to e-Bidding events. "Suppliers are sometimes hesitant to participate in e-Bidding events because they do not have the required Internet platform in their offices. To address this, suppliers can go to our office and use our facilities, complete with PCs and communication equipment for free."

Like products and services and buyers and sellers, Briones says that the facilities or e-Bidding services offered by BayanTrade have also seen substantial development. "We used to do just simple forward or reverse bids," he said.