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Merger to generate wave of alliances

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Ariba's grip on low-cost sourcing activities in the mainland is expected to shake up the market

The merger of e-commerce giants Ariba and FreeMarkets could trigger a wave of industry consolidation as rivals vie for a share of the market for automating the purchase and sale of supplies and services in the mainland.

Industry experts said rivals of the two companies, including foreign and mainland-based vendors of enterprise resource planning (ERP) software, would have to strengthen their product lines through mergers and acquisitions.

Missing out on such deals could hurt these vendors' ability to tap into the burgeoning market for low-cost sourcing of products and services from the mainland.

'At FreeMarkets, we are already serving some of the world's largest makers of personal computers, television sets and wireless phones in China,' said Daryl Rolley, senior vice-president of international operations at FreeMarkets Asia.

'These big customers have responded positively to our merger with Ariba.'

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