Business | General
'Online business is transparent'
Tejari.com's chief executive highlights how companies can use e-procurement.
- By Nadia Saleem, Staff Reporter
- Published: 23:44 August 28, 2008
- Omar Hijazi says e-commerce growth potential in the Middle East is unlimited, especially with increasing emphasis on corporate governance.
- Image Credit: Supplied picture
Dubai: Tejari.com, a pioneer online marketplace in the region, seeks to become the world's largest business-to-business online portal, said Omar Hijazi, chief executive of Tejari.com, who has taken the company to new heights since taking control in 2005.
Tejari.com recently ventured into the Chinese market as part of its plan to become a global entity.
Several online e-commerce initiatives and ventures were launched under his leadership that brought global recognition to the six-year-old company.
Hijazi also sits on the Board of Directors of Dubai World.
With over 20 years of experience in the information and communication technology (ICT) industry, Hijazi speaks to Gulf News about the online portal sector.
Gulf News: How has Tejari evolved since its inception?
Omar Hijazi: We were founded in the year 2000 by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Tejari's established mission was to promote trade and e-procurement for Dubai and create an efficient, open and transparent procurement platform where buyers and sellers can meet for companies here.
We first started out being a provider of online procurement services to the government of Dubai and then expanded into the private sector. We have taken what we built in terms of technology, platform and services, and spread out into the Middle East.
Today, we're in 15 countries, from the Middle East to North Africa, and South Asia as well as in China, where we have ten offices and 100 people.
The idea of taking a homegrown innovation from Dubai and then promoting it around the world, materialised over the last eight years or so.
The initial missions have been fulfilled. We started out with the Ruler's Court of 14 government departments and now we have 190,000 businesses as members from across the world.
In the beginning, were businesses reluctant to conduct e-commerce? What were the challenges?
Absolutely. There are a few challenges, the first being that of technology and infrastructure challenges. This has slowly mitigated over time, because internet penetration in Dubai has increased. More companies now have IT structure. But even as we expand globally, into Bangladesh, we still have to do very simple capacity building.
We have to get companies connected. We have to train them on the basics. We have an e-readiness training course, which prepares companies to be part of the digital commerce. More of the companies do procurement online. So they need to know where to find tenders, get engaged in reverse auction, where the buyers would want them to submit competitive bids on their procurement requirements.
Web presence
Even today, statistics say that two out of three businesses go to Google before making a decision.
If they don't have a web presence, they're doing something wrong, so we also teach them how to put up a showroom online and get them e-ready for this new business environment. Those are the big hurdles.
The other one is in getting people to accept a very open and transparent environment, because with our e-procurement system, that is really important. Everything is recorded, from tender specifications, to buyer's bids. For some people, this completely transparent and recorded environment can be a little intimidating. But it is a strong anti-corruption tool and many of our clients have embraced it.
The Dubai Health Authority for example, have almost all of their procurement done online. The RTA bid a Dh1.9 billion auction online. They wanted it to be completely transparent.
Transparency
In Kuwait, one of the largest construction company in the region has done 40,000 auctions and 80 per cent of them were done online. In Pakistan, the Marriot Intercontinental hotel chain implemented Tejari and they saved millions and eliminated huge amounts of corruption in their environment. These are examples of companies who have fully embraced it.
When it comes to this region of Middle East and broader region of South-east Asia and China, having a very transparent, all electronic platform, can be a little intimidating sometimes.
The final challenge is the legal environment. Electronic transactions are as valid as paper transactions. In Jordan, there is a law that government procurement regulations say that you have to open the documents received for a tender in a room with a glass window.
We figured out a way to do the exact same thing electronically, by putting sealed bids and having higher authority open them, while everything is logged. So we finally got the law to accept e-procurement. Sometimes even the law is not favourable, so we come in and get the law changed.
Was there a time when you saw e-commerce suddenly pick up?
It's been gradual, no big spurt. As people get more familiar with it in a business context and also personal content. As people start using the internet in a personal way, with Facebook, YouTube, Yahoo and Google, then they get more acclimated online business.
We've seen very healthy growth in our region. I expect to see it accelerate even more. It's about business opportunity. For a buyer, that want to be able to do thing more efficiently and more cost effectively.
Procurement
Many companies are going public, now all of a sudden profit is very visible. One of the areas you get to squeeze out profit is on procurement. A lot of your spend goes out the door, and it directly affects your profit. If you can get global bids for all your procurement within a short period of time, this is not only faster but can save a lot of money.
We tell business about this whole different economy out there that they can participate it. People will realise more and more how efficient that is. This concept of how powerful online tools can be is increasingly becoming popular.
To what extent can e-commerce grow in the Middle East?
It is unlimited. To me, every company should be doing this. It's even more important now with all this talk about corporate governance. Transparency International tracks a country's level of corruption and transparency. UAE in 2007, was ranked 34, it dropped a couple of points. And now Qatar is the only Middle Easters country that is ranked higher that UAE at 32. Even Transparency International acknowledges that one of the biggest area of vulnerability for corruption is procurement.
We will be running seminars on transparency and good corporate governance to provide the education and opportunity to learn more.
Does business come in as much as it goes out of the UAE with cross-border transactions?
We're still more dominant in the UAE. China is only about five months old. Eventually, the international part of the business will be 80 per cent and the UAE will be 20 per cent. Once China becomes fully active, it is going to be a huge market, same with Saudi Arabia. We're doing everything we can to promote cross-border connections, whether it is expanding our geographic reach or facilitating delegations while working with the Dubai Chamber of Commerce, to capitalise on what Dubai can offer.
Delegations from Kazakhstan and Koreans come to talk and do business in Dubai, even though it has nothing to do with Dubai.
Thanks to Emirates Airlines, Dubai has one of the broadest reach in the entire developing world. Even the World Bank now relies on Dubai to connect them to all these developing countries.
This creates more opportunities as a global hub for Dubai that we capitalise on for trading and using our transparent platform. It is going to be a bright future for us.
Why is Tejari going global now?
It has always been our mission to take something we had in Dubai and promote it to the world. We've done this in a franchise model.
Our mission is to try and get to as many locations as we can in the emerging world and to introduce them to electronic procurement as a way of doing business and also connect them to Dubai.
How do you pick which countries to focus on?
It is a combination of opportunity and where we see the biggest trading synergy with Dubai. China was a strategic move for us because it has become Dubai's number one trading partner. India is also a strategic country for us and we are looking to open up there in this year, given that it is the second largest trading partner of Dubai. Then we have the other large economies, which are the brick economies of Brazil and Russia and they are our targets as well.
And of course we are still a Middle Eastern company so this region has always been a priority for us and we have covered most of it.
What would you like to see Tejari become?
To be the number one B2B marketplace in the world. The Fortune 500 companies are dominated by the west, but even today ten per cent of them come from the emerging markets.
There are companies like Emaar, who are now becoming the dominant real estate development firm. Emirates Airlines went from 20 to 30 to 75 and DP World is the third largest port operator in the world. Dubai is now unleashing global brands. So there is no reason why Tejari cannot be the number one B2B marketplace in the world.
Share this article
More from Business General
More from Business
Popular in Business
-
General
Precious jump
Gold prices at new high as India's central bank buys $6.7b worth of gold
Business Editor's choice
-
UAE companies in full force at WTM
Seventy-eight participants are from Dubai and 50 from Abu Dhabi
-
DIFC committed to high standards
Ensures an efficient process to serve the business community
-
Sweet life in the Middle East
A sweet look at the confectionary industry in the UAE and Middle East
