Electronic trading networks are one area of Internet-based commerce where Asian firms are expected to dive in with enthusiasm, perhaps because the cost and competitiveness arguments are compelling.
Such networks have existed for years, as a way for large companies to communicate with their suppliers and customers, cutting down costs, paperwork and time-to-market for products.
The main drawback to these so-called electronic data interchanges (EDIs) was the infrastructure cost. Setting up the hardware to connect just two companies to an EDI could have cost as much as US$60,000 in the past, according to Gopi Gopinad, regional deputy manager for telecoms company GlobalOne.
'Fundamentally, EDI hasn't been successful because it required a closed loop,' said software maker Optika's Paul Johnson.
In addition to being prohibitively expensive for small companies, EDI offered limited flexibility because 'the buyer and seller have to use exactly the same format', he said.
With the advent of the Internet, firms such as Hong Kong-based Arena - which has been in the EDI business since 1993 - have set up Web-based networks that allow companies to exchange routine trading documents with suppliers, customers, shippers and the Hong Kong Trade and Industry Department, all without the need to install any hardware. So far, about 300 companies have signed up to use Arena's service, the company said.
