Putting B2B to the Test

Back to Contents of Issue: September 2000

Several companies offering business-to-business matching sites have emerged in Japan this year. ProTrade started its service in March, Mitumori.com in April, and eAnken in May. Their sites promote the outsourcing of corporate services, providing a reverse-auction system in which buyers request work and sellers bid to provide it. The sites vary in the categories of work they handle and the way they (plan to) make money.

First-mover ProTrade (www.protrade.ne.jp) handles the widest variety of categories, including IT, Web, Marketing, Sales, and Administrative. Notable features include a customized request form for each category and a seller ranking system. Since about 70 percent of the registered sellers are small companies with less than 10 employees, getting information on them has been difficult. The ranking system lets buyers see which sellers have earned a good reputation.


Phone: +81-3-5428-5560
Founded: February 2000

Phone: +81-3-5466-2678
Founded: January 2000

Phone: +81-3-3499-2399
Founded: May 2000

So far ProTrade is free, but the company isn't ruling out charging sellers to bid and then collecting a commission when the deal is closed. ProTrade has more than 900 registered sellers and 330 registered buyers. It's had more than 450 work requests, and about 120 of the deals have been settled. The most popular categories are Web-related, and the IT area as a whole makes up for about 50 percent of the requests.

Mitumori.com (www.mitumori.com) focuses almost exclusively on Internet work. "I have a lot of experience in Web site production, so I wanted to focus on what I know a lot about," says representative director Shishoh Shinoda.

The company consults sellers on how to win bids, a service for which Shinoda foresees strong demand. Another service assists buyers who aren't Net savvy enough to know whether a bid is a good deal. There's also a category in which data centers bid to provide storage space to Web outfits and request bids from construction companies to build new centers. Shinoda says the data center category will be a major source of revenue and will "probably account for about 35 percent of revenue."

Mitumori.com charges a commission, as well as a consulting fee for its additional services. It has about 750 registered sellers, 300 buyers, and 150 listed deals.

eAnken (www.layer-8.com/eanken), part of the IT portal Layer-8.com, focuses on software development and IT. It doesn't charge a commission. "If we do that, we have to take some responsibility for the deals," says business manager Goro Nakayama.

With no commissions to be cheated out of, eAnken doesn't mind getting leapfrogged by buyers and sellers, and can make all work requests freely accessible (though company info is kept confidential). This allows even nonregistered companies to make a proposal.

Instead of a commission, eAnken plans to start charging sellers for optional membership levels this fall. Each level will come with various benefits unavailable to nonmembers. Highest-level members, for example, get listed on the database feature that buyers can use to compare sellers.

Registered sellers of eAnken exceed 800, and the service has received more than 150 requests. Popular categories include Web and i-mode work.

All of these sites seem to be getting good user response, but Koji Nagatsuna, senior analyst of e-business management at GartnerGroup Japan, foresees them struggling at the outset. One of the reasons he gives is that many buyers are still not sure if the sellers can be a trusted, and vice versa. "Even though a proposal seems attractive and reasonable, some would still feel uncomfortable doing business with strangers," he says. eAnken's Nakayama concedes that many users are still wondering if these kinds of services are worth paying for, which is why he's initially setting fees at a low price point.

Nagatsuna sees branding as the key: "There may be a chance to succeed if the service itself becomes a brand, or gets backed by one. Otherwise, it's going to be tough. The mechanism of the system looks quite good, but the dynamism of the business doesn't always go with the beauty of the mechanism."

Full disclosure: Layer-8.com is part of LINC Media, also the publisher of this magazine.

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