Taking online auctions to a new level
With almost 400 corporate customers in its kitty,
MatexNet has emerged as one of the leaders in online B2B
transactions. By Neeraj Gandhi
The Internet has changed the way that we buy
and sell things. With a plethora of online auction sites in
existence, one can sit at home and buy a gadget or even sell a
commodity with a click of the mouse. With increasing levels of
transparency, one can also expect to get a good deal over the Web.
In fact even the list of items that can be bought
or sold online has expanded by leaps and bounds. Antiques, books,
cars, furniture, laptops, electronic items, sports goods, clothes;
you name it and it is available on the Web. One company has gone
beyond the usual suspects of auctioned goods and incorporated items
such as machinery, buildings, inventory and even hair, and has
managed to carve out a niche for itself. MatexNet Pvt Ltd has
emerged as a leader in B2B transactions of inventory.
Laying the foundation
Headquartered in Bengaluru, JNN Matex (now
MatexNet) was founded in 1995 by Jaganni Vasan to offer specialized
database management services to companies. However when ICF Ventures
(Mauritius) became its equity partner in 1999, it was renamed
MatexNet Pvt Ltd. Today the company works with a vision of providing
a platform that assists manufacturers, SMEs and dealers in
performing bulk B2B transactions of slow moving inventory.
The company has put together a powerful platform
for online sale of surplus and non-moving inventory, factory land,
building, plant and machinery for corporates. The company has more
than 400 corporate and 3,000 SMEs and traders across verticals like
auto, chemicals, logistics and engineering in its fold. Some of its
prominent customers include L&T-ECC, Mico, Sterlite, National
Mineral Development Corporation, EID Parry, Titan, Bharat
Electronics Ltd, Gateway Distriparks Ltd, Container Corporation of
India, State Bank of India, Akai, Tanishq, Foodworld, Sterling
Holiday Resorts and Maharaja Appliances among others.
“We have been in the forefront of B2B business for
over a decade and conduct auctions for products and services as
varied as copper, chemicals, desktops, human hair and transportation
services,” said Jaganni Vasan, Founder and Managing Director,
MatexNet P Ltd.
MatexNet today is one of India’s largest private
independent exchange companies in the B2B domain. In fact its
transactions crossed Rs 1,000 crore this year, up by almost 150
percent over the previous year’s figure of Rs 400 crore.
Unlike other portals that serve as infomediaries,
MatexNet stood out from a crowded field by shoring up with the
requisite infrastructure in terms of databases, transport services,
logistics, inspection, payment gateways, and domain knowledge to see
transactions through. With an employee base of over 125, it has
branches in Chennai, Coimbatore, Cochin, Mumbai, Hyderabad, Kolkata,
New Delhi and 21 other locations across the country.
It has been an eventful 12 years, since the
company first commenced its operations in the 1990s. At that time,
understanding and popularity of the Internet and e-commerce were
low. Still MatexNet started on its journey, carefully crafting its
way up the ladder, creating a niche for itself.
“The initial days were tough in terms of
connectivity and understanding of the Net. We started as a BBS
(Bulletin Board Service) where information was passed and
transactions were not pushed. Transactions by way of auctions took
shape in 1999. It was a steep and a patient climb with a firm belief
in emerging markets,” said Vasan. “Therefore even before the world
realized that the quiet revolution of e-commerce was taking place,
MatexNet was already providing critical support to industries to
manage their inventory and liquidate surplus stock,” he added.
Hurdles along the way
The company faced challenges in the form of
training and educating its employees as well as in creating
awareness about MatexNet and its operations. There were also issues
regarding the authenticity of such auctions, which it had to tackle.
In order to address all these concerns, it organized seminars and
even participated in a few to dispel the cloud of confusion
There has been no looking back since then. Taking
challenges in its stride, MatexNet has come a long way, winning
accolades and achieving milestones. In 2005 MatexNet was mentioned
as part of a case study on International Research by the Institute
for Development Policy and Management, University of Manchester. In
2006, the company completed a very large transaction for sale of
over a thousand machines at the Standard Motors factory site in
Chennai. This was termed one of the largest e-transactions in the
country. “ It was undoubtedly the first time that an Indian
automobile manufacturer’s plant and machinery was auctioned off
online at one shot,” said Vasan.
||Investment by ICF Ventures
||MatexNet is mentioned as a part of a
case study on International Research by the Institute for
Development Policy and Management, The University of
||Online transaction of 1,000 machines at
the Standard Motors factory site in Chennai.|
||Launched two new verticals MatexMotors,
a common B2B platform for vehicle e-trading and MatexRetail to
facilitate and deal with the slow moving, readily available
finished retail goods. |
||Online transaction value touches Rs
1,000 crore. |
Feather in its cap
The company added another feather to its cap when
it carried out an Internet auction for the sale of human hair worth
Rs 60 crore for Tirumala Tirupati Devastonam. “This unique
initiative by MatexNet has helped change the entire scenario of
trading human hair, through online auctions. Since then more temples
are recognizing the value additions behind such online bids and are
approaching MatexNet for the physical, virtual and domain
expertise,” he said.
Today the company performs its functions through
two divisions: e-Disposal and e-Procurement Division.
The e-Disposal Division is MatexNet’s core
division handling the disposal of surplus raw material, byproducts,
allied products etc for large corporates and SMEs. Inventories are
categorized and offered online to buyers through an online auction.
Prospective buyers such as channel partners, direct reseller
partners, service partners or even end-users can search through
online catalogs and bid for the items offered.
The e-Procurement division is involved in
conducting online receipt of quotes and regular reverse auctions for
procurement of inventories and services. The division has conducted
reverse auctions for materials ranging from corrugated boxes to
chemicals such as caustic soda and liquid chlorine, products such as
desktops, services such as transportation and construction.
MatexNet launched two new verticals in June 2007.
MatexMotors is a common B2B platform for vehicle e-trading and
MatexRetail facilitates and deals with slow moving, readily
available finished retail goods.
The motors division will deal with the online
sales of used motors across the country. Specializing in vehicle
e-trading, this division is engaged in bringing together the sellers
and bulk buyers of commercial vehicles, farm equipment, two-wheelers
etc from across the country on to a common platform. “We have plans
to hold negotiations with used vehicle dealers to refurbish
auctioned vehicles. In addition we will also target institutions
that are willing to purchase used vehicles,” says Vasan. The company
hopes to offer this service in 400 towns by 2008.
The retail division on the other hand will enable
manufacturing companies, wholesalers, distributors, dealers,
retailers and importers to buy or sell products in bulk across
various product categories to a wider market reaching more buyers.
The portal will enable corporate customers to make bulk purchases of
products at reasonably attractive prices. This division will provide
a platform for auctioning unsold consumer durables.
The company has laid down major expansion plans
for markets such as Nepal, Bangladesh, Sri Lanka and Singapore. To
attain this objective, MatexNet has also started building its
database and has set up a process to know more about products that
can and will benefit transactions between nations. Besides this, the
company is also in the process of launching new verticals to its
core business of Inventory Disposal Solutions.