ChemConnect as B2B Success

WSJ has a story that will warm the B2B fans (any still left): ChemConnect has survived and thrived to become “the biggest online exchange for chemical trading, with volume of $8.8 billion in 2002.”

One key to ChemConnect’s survival was speed. It was first to market, launching an Internet bulletin board in 1995. It was also the fastest and best fund-raiser among its dozens of competitors — bringing in $105 million by the time the stock-market bubble burst in 2000, compared with $50 million for its chief competitor, CheMatch.com. Mr. Beasley also realized that the only way to persuade traditional chemical companies to trade online was to allow the industry to profit from ChemConnect — so he sold about one-third of the company to more than 40 chemical companies.

ChemConnect still isn’t profitable, although it expects to break even this year. And while it is used by about 44% of the industry, many sellers wish there were more buyers online, according to a survey of 250 chemical buyers and sellers by AMR Research. “The key now is to basically be as patient as you can, but to continue to push the adoption curve,” [founder] Mr. John Beasley says.

With its hefty cash hoard, ChemConnect took the opportunity to buy competitors, including CheMatch.com and an industry-owned exchange. Mr. Beasley also recruited a seasoned chemical executive, John Robinson, to run the company as chief executive, while Mr. Beasley remained chairman.

Local Search

SearchEngineWatch writes about the potential in the SME market:

The answer, as one might expect, is revenue-or more precisely, potential revenue. When you add up the number of all the paid search advertisers in the world right now, the total is approximately 380,000. Yet, there is substantial overlap among the advertisers of the different paid search networks. (It’s rare a company that uses Google but not Overture and vice versa.) So, as a rough estimate, the figure is probably closer to 250,000 paid search advertisers on a global basis.

By contrast, the U.S. alone has about 10 million small- and medium-sized enterprises (SMEs), and there may be as many as 30 million more such businesses in developed countries around the world. In the U.S., most of those SMEs, the bulk of which have fewer than nine employees, conduct the majority of their business within 50 miles of their locations.

The model to look forward to is Citysearch which marries search and directory. “Citysearch presents a hybrid approach that combines pay-per-click advertising for local businesses, with a keyword search-driven interface over a structured local database. That provides the ease of use of search with the reliable structured data offered by Yellow Pages.”

WSJ on Arun Shourie

WSJ profiles one of the best ministers in the Indian cabinet. Shourie handles both disinvestment and IT. The article focuses on his role in the public sector units’ privatisation process.

For the first time since the end of British rule more than 50 years ago, India is redefining the government’s relationship to business. The sizzling economy of the world’s second-most-populous nation is expected to expand by at least 7% in the year ending in March. Supporters of reform give Mr. Shourie a hefty dose of credit for encouraging economic change.

Mr. Shourie’s main ally has been Prime Minister Atal Bihari Vajpayee, who has repeatedly stepped in to push the campaign forward. Mr. Shourie also has used his journalistic skills, writing opinion pieces and essays that attack what he calls India’s “timorous political class” and the “unimaginative character” of most Indian state-owned companies.

Mr. Shourie’s battles with the Indian government go back to his college days at Syracuse University in upstate New York. As a doctoral candidate in economics in the 1960s, he wrote a thesis arguing that New Delhi’s foreign-exchange controls were leading to a generation of lost growth. Intellectuals in Indira Gandhi’s socialist government branded Mr. Shourie a Western agent. With few job opportunities back home, he joined the World Bank in Washington, working as an economist for nearly a decade.

Mr. Shourie returned home in the years leading up to the collapse of Ms. Gandhi’s government in 1977 and became an editor at India’s most prominent investigative newspaper, the Indian Express. At the time, the paper’s owner was waging a crusade against the autocratic Gandhi family and India’s largest private company, Reliance Industries Ltd., which now has interests in oil and gas, telecommunications and other businesses.

Mr. Shourie’s former colleagues say he aggressively covered the so-called “Bofors Scandal,” a multimillion-dollar payoff scam involving a Swedish arms contractor and members of Rajiv Gandhi’s government, which was exposed in 1987.

Mr. Shourie left the Indian Express over differences with the owner. Over the past three decades, he’s written 17 books on everything from Islamic law to India’s defense forces, earning both admirers and critics.

In 1998, Mr. Shourie joined the upper house of parliament as a member of the Bharatiya Janata Party, the Hindu nationalist political party led by the current prime minister. Two years later, Mr. Vajpayee tapped him to become the privatization czar.

Shourie has also in the past few months streamlined the mess between the various telecom operators, with the result the India’s cellphone base of 28 million at the end of 2003 is expected to more than double this year.

Second Hand Japanese Cars in Third World

[via Vivek Padmanabhan] WSJ writes:

In Japan, quirks of the market — and the consumer — have created a glut of saleable used cars. Strict and expensive vehicle inspections in Japan discourage people from holding on to cars as they age. Moreover, there is a strong cultural aversion among the Japanese to buying almost anything second-hand.

The result: Ships filled with low-priced cars — everything from sports cars to high-mileage vehicles, damaged cars and patched up wrecks — leave Japanese ports for emerging markets. The cars end up in Africa, the Middle East, the Caribbean and Asia, accelerating motorization in areas where new cars are still beyond the reach of many consumers.

The global auto industry is waking up to the repercussions, as Japanese brands — particularly Toyota — find their way to first-time buyers. Many African cities are already teeming with Toyotas, even though very few new cars have been sold there. That’s troubling for Detroit car makers, which have been eyeing new markets to spur sales as developed nations become saturated with cars.

Wish the same thing could happen in computers – except that the Indian government has an anti-dumping duty of USD 200 per second-hand PC.