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.

The Journey

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 surrounding it.

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.

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.

New verticals

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.

Future Plans

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.