SouqAlKhaleej e-marketplace to link GCC

The Federation of GCC Chambers of Commerce has announced plans to create a regional e-marketplace, called SouqAlKhaleej.net, which will drive the GCC into the digital economy.

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By  Matthew Southwell Published  July 1, 2002

|~||~||~|The Federation of GCC Chambers of Commerce has announced plans to create a regional e-marketplace, called SouqAlKhaleej.net. Designed to drive the GCC into the digital economy and boost technology adoption among businesses, it will offer a number of online services.

“The e-marketplace will be a common market for GCC countries and will offer parallel lines of services and support — direct services to the business community and support for organisations wishing to transfer into the digital economy. We hope we can provide a unified set of services for the six countries,” says Abdullah Samhan, CEO of SouqAlKhaleej.net.

In addition to typical business-to-business (B2B) functionality, such as online purchasing & selling, the e-marketplace will offer authentification and electronic document transfer, information services and business opportunities.

“Under each one of the four major services there will a number of additional offerings. For example, under the database service we will provide hundreds of reports and under the business opportunities we have around 20 different selling, auction and reverse auction features,” explains Samhan.

To enable authentification, the federation plans to issue a digital certificate to members of each of the affiliated Chambers of Commerce. Samhan believes this will be the most popular aspect of the site. Currently, more than 70% of the Chamber of Commerce’s business comes from authenticating members.

“Every member will have the right to receive a free digital certificate and use the electronic document transfer network for free. Later on, if they want to send electronic documents, they [the members] will have to pay transfer fees,” explains Samhan.

The project is being funded through a combination of venture capital and direct investment from the as yet unnamed technology partners that are helping build the e-marketplace. Scheduled to go live in October 2002, each country’s Chamber of Commerce will start training from the beginning of September.

Although a number of the federation’s members, such as Dubai and Abu Dhabi’s Chambers of Commerce, are already developing their own portals, Samhan says the sheer size of SouqAlKhaleej.net will supersede any local offerings. “The scale and magnitude of the project is above and beyond the capacity of each chamber. They cannot do it on either the technical or financial level,” he says.

While the regional e-marketplace may offer more services than local Chambers of Commerce, it will undoubtedly face the same problems. For example, no matter how tempting the online offerings are, a huge number of businesses in the GCC lack the IT to take advantage of them. Samhan says this problem will be tackled by helpdesks within the local Chambers of Commerce.

“[Members] will be able to use these business counters to do things there and then. For example, if they are not connected to the Internet they can publish their business opportunities from there. We will not wait until every member is online because we do not want to slow the momentum we have,” he says.

Alan Livingston, CEO of Oman TradaNet (OTN), believes electronic marketplaces will not work in the Middle East as the technology jump needed for most business to get online is just too great.

“Anything other than very focused marketplaces, or those organised by a large corporation, are failing. It amazes me that people in the Middle East are still trying to perpetuate the idea that marketplaces are going to be a panacea… In terms of business process, for organisations to move from running a business with a telephone and a fax to trading electronically through a marketplace is just too complex,” says Livingston.

Furthermore, Livingston suggests that even those e-marketplaces that are already established within the Middle East only serve a specific audience. “Someone like Tejari, for example, has around 300 members out of a total marketplace of about 60,000 businesses. Those organisations that are connected will be the top ones in the UAE. This makes a marketplace elitist and disadvantages the small businesses,” he says.

OTN’s solution is to take an organisation’s current business processes and automate them through the Internet. “We are taking the information and document movement that is going through the fax machine and making that electronic. We are connecting supply chain partners together and automating that process,” explains Livingston.

For companies with the IT infrastructure, this integration is completed on an application-to-application basis, much like the Electronic Data Interchange (EDI) model. For those unable to connect at this level, OTN has created an online business centre for small-to-medium sized businesses (SMBs) where they can retrieve and send documents electronically.

Rather than using the business centre as an e-marketplace, organisations use it as a repository for the online information that they are not technologically advanced enough to house themselves.

For those businesses lacking basic Internet connection, OTN has begun training local Internet café owners to use the system. The company is also in negotiations with the Oman government to develop an Internet café franchise where owners will be provided with professional management and marketing training on TradaNet in return for a percentage of their revenues.

“SMBs that have no Internet connection will generally have extremely low volumes, so they will rarely need to visit an Internet café. To save them having to check their account regularly, OTN automatically sends a text message to their mobile phones informing them of a documents arrival. Ultimately, SMB clients will be able to access and manage their accounts via a handheld device,” comments Livingston.||**||

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