ECONOMY

E-marketplaces can find domestic clients

When the first electronic marketplaces – sites set to facilitate online business-to-business transactions – were founded, some prospective investors were thinking about the huge gains offered by listed e-stocks. However, big capital gains proved elusive, the companies started hemorrhaging financially and some of the main shareholders gradually realized that investment was not worthwhile and tried to slip away as quickly as they could. Greece’s two biggest electronic marketplaces are now treading a fine line between potential success and failure, are urgently searching for clients and are in need of constant infusions of cash. Last year, CosmoOne, a company whose main shareholders are OTE, Alpha Bank, National Bank and Diinekis Informatics, posted a 2-million-euro loss. Its rival, Business Exchanges (Be), whose founding shareholders were EFG Eurobank, mobile telecommunications firm Vodafone and Internet services provider Hellas On Line (HOL) had losses of 3.4 million euros. Their turnover reflects the state of the sector: CosmoOne’s turnover in 2003 was a mere 1.8 million euros, mostly through conducting online auctions for equipment procurement for OTE. Be’s turnover, at 767,000 euros, was even lower. The company felt the impact of the failure of a subsidiary it had set up to support transactions among retailers of electric appliances and electronic equipment. Business Exchanges finally absorbed its failed subsidiary and there are rumors of its own impending absorption by SETE, a Latsis Group supply company. Be suffered from the troubles plaguing the big retailers with whom it had concluded agreements. CosmoOne did somewhat better, but some of its shareholders were less than attentive to the company’s needs and OTE was forced to supply capital in all emergencies. After all, 85 percent of the company’s turnover is due to OTE. Despite this dismal picture, analysts say that there is a place for electronic marketplaces, especially in countries like Greece where there are many companies (especially among the public utilities) that should be looking for ways to cut costs and better manage their procurement programs. Sector analysts believe that this is where the two companies’ future lies, rather than in deals with big private businesses. The latter – multinational firms, especially – have already found ways to limit the cost of procurement of raw materials or consumables and they do not need the B2B market to maximize their effectiveness. Many multinationals have set up their own electronic marketplaces connecting them with all their subsidiaries. By contrast, many public firms and state administration organizations appear unable to manage their procurement, leading to situations such as dramatic increases in the consumption of pens and paper for no apparent reason.