Market consolidation not causing concern

Bex.com's chairman expects less than five dominant players in each industry to survive the consolidation phase.
Written by Eric Ng, Contributor

Bex.com's chairman expects less than five dominant players in each industry to survive the consolidation phase.

SINGAPORE (SCMP)- Online trading exchange solutions provider Bexcom expects consolidation among its customers to pose little threat to its business in the long-term. Voon Fee Yong, chairman of the four-year-old Singapore-based company, said the anticipated consolidation of business-to-business exchanges through mergers and acquisitions would result in fewer but stronger customers.

Bexcom expects less than five dominant players to emerge in each industry segment of the business-to-business exchange market within three to five years.

Expecting up to 90 per cent of present market participants to disappear, Mr Yong said: "The way we look at our business in the next three years, we will set up many [online exchanges], but some of our customers will die or merge."

"We'll serve less exchanges, but that's okay, because what we want is volume."

The company focuses on setting up online business platforms for manufacturers of information technology products - the Asian suppliers of IT brand names such as IBM, Hewlett-Packard and Compaq. They allow a company to communicate with its offices and to manage inventories and manufacturing processes more effectively.

"Our goal is to help the top 200 companies from each Asia-Pacific country transform from a brick-and-mortar company into a hybrid business," he said.

Mr Yong said his firm offered software solutions and network management services through its data centres in Britain, the United States and across the region.

"Our offering is not a piece of software," he said. "We're more like an infrastructure provider, we aim to be the AT&T of B2B."

Bexcom had recently opened an office in Hong Kong and would soon announce a partnership with "one of the really big conglomerates", he said.

The company raised more than US$100 million in a round of investment in March, which gave it a valuation of about US$500 million, ahead of the valuation correction of global Internet companies.

Its investors include the Singapore Government, US-based computer chip giant Intel, Japanese trading group Mitsui, Singapore-based DBS Bank, Holland-based ABN Amro Bank and Taiwan's Koo Group.

It has applied for a listing on the Nasdaq market, according to sources.

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