Electronic Commerce
&
Business-to-Business
Payment
November, 2003
Akiko Cho
1
Topics to be discussed
• To analyze the current and future state of B2B
electronic market place (eMP) business
• EBPP/EIPP
2
E Commerce
•
•
•
•
B2B
B2C
B2E
B2G
Business to Business
Business to Consumer
Business to Employee
Business to Government
• C2C Consumer to Consumer
3
Major Players
• ‘Sogo-Shosha’
• In-house ventures
• ventures
4
Market size
• Ecommerce: 21.6 trillion yen (2000)
55% IT related products
34% Car, Car parts
11% Others
• eMarket Place: 200 billion yen
5
B2B
• MRO(Maintenance Repair and Operation)
• Over inventory
• Multi- Product
• General purpose
6
MRO:ASKUL
• Started service in 1993
• an in-house venture of PLUS Corp.
• Office related products (13,700 products)
• 1997 spun-off
（C）ASKUL Coporation
7
eMP: 3 Model
buyer
seller
1 to N
N to 1
N to N
eMP
8
eMP: Function
• Exchange
• Catalogue
• Marketing
• Advertisement
9
eMP: Pricing(1)
Auction
Seller
buyer
Highest price
Reverse Auction
seller
buyer
Lowest price
10
eMP: Pricing(2)
Catalogue
seller
seller
buyer
buyer
11
eMP(1) – MetalSiteJapan
• Started in 2000 by several “Sogo-Shosha”
• Deals with Steel products
• Matches the demands and supplies,
and earns revenue on contract basis
• Finds difficulty in earning demand
（C）MetalSite, L.P.
12
eMP (2) - Beitsubo
• Started service in 2000, and incorporated in 2001
• Deals with Pulp and paper
• Its member can find counter party through Beitsubo
ANONYMOUSLY
• Finds difficulty in gaining enough volume of supply
（C）Beitsubo k.k.
13
Real Channel
(1)News Paper
companies
Supplier
Distributor
Distributor
(Wholesaler)
Logistics
Smaller amount
Finance
Cutting, processing
Buyer
(2)Major
publishing
companies,
Major paper
products
companies
14
Beitsubo: Reverse Auctions
BUY
Beitsubo
.
Supplier
Buyer
(2)
Wholesaler
(1)
(3)
Reverse Auction
Maker
Printing
companies
Distributor
Publishing
companies
(4)
(5)
<All transaction will be held w/o name>
(1)
Buyer: inputs type, quantity, price of paper
(2)
Suppliers check the web site.
(3)
Suppliers inputs price on the web site(The lowest price will
prevail. No cancellation)
(4)
The products will be sent to the buyer from Beitsubo
(5)
The buyer will pay directly to Beitsubo
15
Beitsubo:Catalogue(1)
SELL : inventory
Supplier
Beitsubo.com
(1)
Buyer
(2)
Wholesaler
Printing
companies
Catalogue
Publishing
companies
(3)
(4)
(5)
(1)
Supplier: send application of own products(sales fees will be
charged automatically.)
(2)
Buyer check the catalogue
(3)
Buyer send the order and negotiate the price(no cancellation will be
accepted once price and quantity are confirmed.)
(4)
Beitsubo send the products to the buyer
(5)
The buyer will pay the money directly to Beitsubo
16
Beitsubo: Catalogue(2)
SELL: Distributor
.
Beitsubo.com
Supplier
Buyer
(1)
Catalogue (2)
Hokuetsu
Paper
Mills, Ltd
’
(3)
etc
(4)
Printing
companies
Publishing
companies
(5)
(6)
(1)
Supplier inputs own products(sales fees will be charged
automatically.)
(2)
Buyer request the cost of purchase
(3)
Seller submit the cost of purchase
(4)
Buyer send the order
(5)
Beitsubo send the products to Buyer.
(6)
Buyer will pay the money to Beitsubo.
17
Why difficulties?
• Little volume of supply
• Takes time in establishing their brands
• Hardly to meet the needs for customizing
products
• Bothersome in their process
18
Beating the difficulties (1)
Shokudoraku
• Started its business in 2001
• Deals with foods and peripheral goods for small
taverns
• Utilizes the supply net for convenience stores
Supplier A
CVS A
Supply net
Supplier B
CVS B
Tavern A
（C）Ever vision, Inc.
Tavern B
19
Shokudoraku(1)
Supplier
Buyer
Shokudoraku
（１）
(2)
(3)
Catalogue
Franchise
restaurants
’
(4)
Sme
Restaurants/
bars
(5)
More than
100
companies
(6)
(1)
Supplier: send application of own products(sales price= supplier’s
price+logistic costs+payment costs+shokudoraku’s fee)
(2)
Shokudoraku updates web site (or paper-based catalogue)
(3)
Buyer check the products
(4)
Buyer send the order through internet or by fax
(5)
Shokudoraku send the products
(6)
Buyer will pay by the credit cards
20
Trends of eMP in Japan
Back to
Private eMP
Public eMP
Transforming to
Information
Provider
[ - 2002]
[Future]
21
Shokudoraku(2)
（C）Ever vision, Inc.
22
Beating the difficulties (2)
FIS group
• Started service in 1995
• Deals with fishing and aquaculture
• Provides information on the fish market worldwide
• Enjoys 500,000 members worldwide
• Earns fixed rate revenues from
the members
（C）FIS Holding, Inc.
23
Japan e-Market(1)
• 2001: eProcurement
• Catalogue, Reverse auctions
Members:
• Suppliers: 160 companies
• Buyers:10 companies
24
Japan e-Market(2)
Japan e-market
Supplier
(2)
Buyer
(1)
(3)
Reverse
Auctions
(4)
(5)
(6)
(7)
<Members only/Public>
(1)
Buyer: request for particular products
(2)
Japan e-market announce the details to suppliers.
(3)
On the specific date, supplier inputs the price.
(4)
The lowest price prevail. Can negotiate the details.
(5)
The buyer will pay the fees to Japan e-market.
(6)
Supplier: send the products to the buyer
(7)
Buyer: Payment to suppliers
25
eMP related Payment
Services
26
Trends in e-Payment Services
• Many ‘Sogo-Shousha’ have chosen to enter the
market. Bankers are late comers.
• Different background with different scheme
(differed payments, finance-hub, EBPP, credit service)
• e-Marketplaces are strategic marketing partners
- Targets eMP’s buyers/sellers
27
‘Pay-easy’
• Organized by J.A.M.P.A(Japan Multi-Payment Network
Promotion Association)
• Participants: financial institutions, utilities companies,
local government, IT vendors -1,605 institutions
• “Anytime”, “Anywhere” - pay your bill/tax through ATM,
mobile phone, PC.
•
Account Aggregation
（C）Japan Multi-Payment
Network Promotion Association
28
Risk Monster
• A spin-off of Nissho Iwai’s credit management division
(www.riskmonster.co.jp)
• Offers credit rating, suggested dealing limits, and credit
portfolio management
• Partnership with Tokyo Shoko Research, a corporate
data provider of 1.4 million companies
（C）RISCMONSTER.COM
29
EBPP/EIPP
30
Transaction Components
Supplier
Acceptance of Order
Fulfillment of Order
Past investment
in Automation
order
Settlement of the Order
Impact on collection
of A/R
cash
Source: Doculabs
31
EBPP vs. EIPP(1)
Supplier
Buyer
Supplier
Buyer
EBPP
EIPP
• Electronic Bill Presentment and Payment
• Electronic Invoice Presentment and Payment
• Weekly, monthly repot
• Both own data
• Supplier owns data
• Used for reconciliation of A/R and A/P
©Hitachi Research Institute, 2003
32
EBPP vs. EIPP(2)
EBPP
industry
Customer
Service
(Utility, Loans, Insurance)
Manufacturing, Retail
B2C
(M any custom ers w ith sam e volum e)
B2B
(B ig custom ers w ith high volum e)
Customer service
Reconciliation of A/R
Reduction of reprint
Cash Management
monthly, quarterly
(by period)
daily, weekly
(by transaction)
Driver
Frequency
EIPP
33
EIPP(1)
(1) order
(2) shipment
EIPP provider
Order
acceptance
(3)invoice
Server
(4) Confirmation
Disputes
A/R
Disputes
(7) Data of Sales
Supplier
(5) Payment
instructions
Order
(8)Data of invoices
(6) Payment Data
A/P
Buyer
Buyer’s bank
©Hitachi Research Institute, 2003
34
EIPP(2)
Buyer’s Web
C om pany
nam e
transaction
date
transaction
price
transaction
quantity
total
invoice
paym ent
date
settelem ent
date
m eans
of paym ent
status
of paym ent
A
2003.06.01
3000
2
6,000
2003.06.30 2003.06.30
transfer
done
B
2003.06.21
200
30
6,000
2003.07.02
-
-
w aiting
A
2003.06.03
500
70
35,000
2003.07.03
-
-
disputes
C
2003.05.27
433
22
9,526
2003.06.26
2003.6.24
transfer
done
A
2003.06.30
150
42
6,300
2003.07.15
2003.7.1
card
done
©Hitachi Research Institute, 2003
35
Issues to be solved
receipt
Recognition of
receipt of goods
buyer
order
payment
supplier
fulfillment
shipment
invoicing
settlement
EIPP
production
Current EIPP
36
Reference
ECOM
(Electronic Commerce Promotion Council of Japan )
http://www.ecom.or.jp/
METI (Ministry of Economy, Trade and Industry)
http://www.meti.go.jp
37