Tejari’s future in safe hands

As a consultant, Omar Hijazi helped design B2B portal Tejari’s impressive blueprint for expansion. As its new CEO he is ready to put those strategies into practice

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By  Caroline Denslow Published  September 3, 2005

|~|tejaribody.jpg|~|Omar Hijazi will be using the skills acquired from his time as a management consultant to help Tejari expand. |~|With new products and services scheduled to be laun-ched by the fourth quarter of this year, Tejari is looking at attracting a more diverse set of companies from both the local and international communities. As the e-business segment looks set for a healthy rebound, the online B2B portal is hoping to capitalise on the resurgence, with the aim of capturing a larger share of the region’s business population and establishing its name in new territories. At the helm of this plan is Omar Hijazi, Tejari’s newly appointed chief executive, who shares with IT Weekly the online marketplace’s blueprint for the future. In your new job as chief executive of Tejari, what are you planning to bring to the table? My background is e-business, which I’ve been doing for the last seven years, specifically e-business and e-commerce. A lot of what I used to do, as a management consultant, was to help companies grow. So when it comes to growth strategies and structuring companies to grow their business I have quite a lot of experience in that area. I think Tejari has done very well for itself over the last five years since it started. We have seen the ups and downs of the dotcom era, and now if you look across the world, e-commerce is resurging in Europe, the US and Asia. You have seen the investment Yahoo! made with Alibaba — US$1billion amounting to 40% of the company and 35% voting rights. That’s a testament. E-commerce is definitely something that is going to grow and is something that Tejari can continue to grow because we are right now the dominant Middle East online marketplace and we just need to take what we built — our reputation, our customer loyalty — and really grow the company. That’s what I’m here to do. How do you compare the US e-marketplace to that of the Middle East? It’s a little different. The US certainly has a higher internet penetration rate and a lot more familiarity with online services. But the Middle East is moving fast in the same direction, so I think the gap is narrowing. We have seen a lot more activity here in the region because of the growth of our clients. Some of our clients have grown their activities by around 70% with Tejari. So once they are introduced to online services and online procurement, people understand the value in it and can see why this is something that can help their business. If you are a buyer, and you do online auctioning, then you start to see how easy it is to have multiple suppliers bidding for your business and to get a much more competitive price tag, so the buyers will see savings. If you are a supplier, you will see a lot more business coming your way because when you join Tejari, you will have insight to all the auctions that are going on for your particular type of business. We even now have the capability to send an SMS message to suppliers’ phones that says, “This buyer is now looking for 10,000 PCs”. So, if you are a PC supplier, you have three days to bid, go online and put your bid and see if you can get the business. Buyers can see savings and suppliers see more business. And once you have that going in one community, then the others will start seeing the benefits as well. So I think it is just a matter of time. In the US, the market has been developed a little earlier but people here are starting to realise that there is a benefit to online marketplaces. ||**|||~||~||~|What strategies have you applied in the past that you will be introducing to Tejari? Well, the thing is, our history here has always been about bringing buyers and suppliers together, and if you look at how things are done in the US, take E-bay for example, it’s for consumers. It has done a very good job introducing consumers to online auction and online procurement. If you look at companies in the US, there are a lot of marketplaces. It’s because you can do business online, that it is secure, that it helps your business. All those things you can bring to the Middle East and work with the companies over here to introduce them to the new concept. And what we are doing very specifically in the fourth quarter is at the end of the year we will be introducing three very interesting products. One is a market-making capability. Market-making currently involves the capabilities of the companies to do profiling of who they are and putting contact information online. So once you register on Tejari you can profile your company and advertise your company whether you are a buyer or a seller on Tejari. You can then also have electronic product showrooms so suppliers can do e-exhibitions of their merchandise on Tejari to stimulate demand. We will also have a trade lead mechanism so buyers can alert others of what they are looking for, and suppliers can alert other traders of what they have to offer. It is a matter of matchmaking. You might have a buyer who is not aware of the products that are available or suppliers that are not aware of buyers who are looking for a particular product. So these market-making products will help our customers on both sides to find new business or to find new products or services that will help their own business. We are also going to introduce an e-tendering product and that is going to specifically address more complex tendering that goes on here in the region. Right now most of the auctions that happen on Tejari are what is called RFQ or request for quotation. But some of the more complex tendering activities have multiple levels of approval, more complex workflow, and large amounts of documents that need to be exchanged with different parties. That’s much more complex and right now it is being done manually. We are going to have all that shifted online. So if you are in the government, or in construction, or other businesses that require complex tendering processes, you can now do all that online in Tejari by the end of the year. We are also going to introduce a payment gateway. We are also looking by 2006 to introduce electronic billing. So all these will bring best practices from the US and Europe here into Tejari in order to roll out more customers that can interact in a much higher level. And I think this will also attract many small and medium-sized businesses (SMBs) on to Tejari. It is going to be so easy for them to register, and it is going to be easy for them to see the activity they can engage in on the marketplace. And also we have our consulting services, which are built from the experience that our people have had in serving the procurement needs of all our customers over the last five years. They have a very good knowledge base to draw from and they can then provide more procurement services to our clients. Are SMBs in the region truly aware of the benefits of trading in an online B2B portal? That’s one area where we have made good headway. Lots of our suppliers are small to medium- sized suppliers. When they get on to Tejari they see activities that they may or may not have been invited to before. They see the value of it. And I think when we get the market-making tools available that will even increase [the activities] because by then you will have messaging going back and forth to buyers and suppliers to know who is out there, who is looking for what, and who has bought new products. Sometimes there are buyers and suppliers who will get 25 bids for their business when before, back when they were using phone calls or faxes, they might have gotten fewer bids. So I think it helps that the thicker the marketplace, the more benefits it has for everybody. If you’re a buyer you will have more supplier bidding for your business, and if you are a seller you will have more buyers to go after. It doesn’t matter whether they are small or medium-sized or big suppliers or buyers. What’s important is that the more people there are on the marketplace, the better for everybody it will be. Aside from enhancing your e-procurement services, one of the key areas you are looking at is to introduce what you call supplier relationship management. One of the things that a marketplace can bring is the ability to provide information about the suppliers of a particular region, whether it is Kuwait or Jordan or here in Dubai. So, for example, if you are a very large company, you are going to have hundreds of suppliers. You have to have their contact information. You have to know whether their business license is up to date. You have to know whether there were any complaints on the supplier or whether they are in good standing with the government. You’ll have to be able to understand their particular products, what they offer, what’s up to date. With an online marketplace, you’ll have that access to their product catalogues. If you think of every big company having to do that internally, you are all betting on having about the same hundreds suppliers or thousands supplies. One of the benefits of having all the suppliers in Tejari is that these big companies can just draw the information about all these suppliers from Tejari. They’ll know whether their business license is up to date. They’ll have the right up-to-date contact information. They will know whether they are in good standing. And then when credit reporting — which is what the government is introducing — will be rolled out in Dubai, then we will also add credit reporting into our supplier management capabilities so you can actually get the suppliers’ credit report along with everything else. It’s a matter of helping our customers. We’re doing all these same things — while every company only need to just do it once in Tejari — and you’ll know that you’ll have very secure, safe and updated information on suppliers in the region. We do that for Dubai, we do that for Jordan, for Kuwait and for Lebanon. You can just log on to Tejari and have a list of all the suppliers that you need available along with their current information. ||**|||~||~||~| Do you attribute Tejari’s success mainly from the strong support of the government? What about other local marketplaces that don’t have such support? How can they become successful? I think the way the government helped Tejari is to kickstart Tejari because you need to have what is called liquidity in the marketplace. You need to have a critical mass of buyers and sellers on a marketplace to start attracting more buyers and sellers. The government is still one of our best clients. It is still very active and it is still growing with us, but now we have expanded in both private and public sectors. I think you can start a marketplace in any industry — whether it is the government, oil and gas or hospitality — as long as you first start with some critical mass. Tejari focused on government and now with our critical mass that helped us then to attract everybody else since in every industry you have an overlap between suppliers and between buyers. For example, we are doing very well in aviation, we have Emirates Airline and Oman Air — and we are going to have some new airlines coming on board as well. So once we have one industry then others want to join. They think that “OK, I will go to Tejari because all the aviation suppliers are there, my peers are there, and I know I will be able to transact very easily.” In marketplaces it is all about getting an industry group. So if you are going to start a marketplace you have to pick one, and we picked the government, and it helped us very well. They’re still a very, very significant piece of our business as well. What impact does globalisation have to Tejari’s online marketplace? Tejari does two things. One, I think is we’re helping to break down trade barriers. If you think about the European Union (EU), there’s no reason why the Middle East cannot be like the EU. For example, if you are a buyer in Kuwait, you can get suppliers here in Dubai to bid for your business. If you are a supplier in Jordan, you can bid for business in Dubai. So all of a sudden Tejari is facilitating cross border trading, and if we can be in every country in the Middle East and North Africa, then all of a sudden all this trading will start happening very easily across the entire Middle East. When it comes to breaking down trade barriers and promoting e-commerce, that’s our mission. Also, what our customers are asking us to do is to start bringing international suppliers onto Tejari. For example, if you are trying to look at electronic equipment, there’s no reason why we can-not bring in a thousand suppliers from China, who are already selling in the Middle East, to Tejari. We can bring them all online and get them to start trading with other people on Tejari. Tejari is both expanding regionally to break down trade barriers and promote e-commerce in the Middle East and North Africa, and also to bring foreign suppliers and buyers who are already trading in the region on to Tejari. So we are extending our reach geographically and we are extending our reach with our members internationally. That’s the vision.||**||

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