Dotcom Marketing in India
Details
Themes: Internet companies
Period : 1990-2001
Organization : Equus Advertising, Hungama.com
Pub Date : 2002
Countries : USA
Industry : Information Technology (Electronic Commerce)
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Case Code : ITSY008
Case Length : 09 Pages
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The software not only helped SciQuest cut the order-processing costs by 50%, but also significantly reduced the problems the company faced due to the increasing number of customers. The company now began considering introducing various features in the B2B e-marketplace to provide value-added services to its customers. One such initiative was the launch of an online auction facility in early 2000. The technology for this purpose was supplied by Lotus Domino15 and Lotus Notes16. The auction facility helped customers to submit bids for used and refurbished laboratory equipment. Using Lotus Notes, SciQuest could send, an e-mail response, confirming receipt of a bid by the customer. Items for bid were posted to the web site with the help of Lotus Domino. By the end of 2000, SciQuest shifted the auction functions to WebSphere Commerce Suite, since it supported Java and XML17. Skowron said, "We'll be able to integrate front-end auction transactions with back-end distribution systems." The FutureSciQuest attempted to position itself as a vendor neutral partner for both buyers and suppliers. |
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It secured over 100 enterprise customers and contracts with 850 suppliers around the world by March 2001. The company had more than 1.5 million stock-keeping units, ranging from reagent and antibodies and latex gloves costing 50 cents, to high-end, $20,000 spectrometers. About 300 transactions were handled through the exchange each day, involving approximately 700 orders to suppliers. SciQuest had the capability to customize its marketplace and integrate it with its customers' enterprise systems, internal inventory systems and libraries. The company's catalogue had increased to one million products in 2000 and its services had received the approval of major global product suppliers and research organizations, including Dow Chemicals, Du Pont pharmaceuticals, Glaxo Wellcome, Merck and Monsanto.
SciQuest derived its revenues through commissions from auctions & e-commerce transactions and from advertising and sale of information on its site. The increase in SciQuest's revenues from $0.48 million in 1998 to $3.88 million in 1999 and $51.7 million in 2000, was largely attributed to the establishment of the e-marketplace, since 90% of the revenues was generated through e-commerce transactions. Though SciQuest benefited from its relationships with large buyers and suppliers through transaction volumes, it found itself working on very thin margins. This was reflected in its bottomline, with the company consistently posting net losses during the 1998-2001 period. While the net loss was $4.22 million in 1998, it increased to $84.35 million in 2000. For 2001, while revenues declined almost 55%, the loss remained almost the same, at $82.84 million.
According to analysts, SciQuest's losses were expected to go up further in the future as spending on sales and marketing, content development, technology and operating infrastructure increased. The global slowdown in the infotech business in the early years of the 21st century, coupled with the fact that SciQuest’s business model was new and unproven, did not augur well for the company.
15] Lotus Domino offers integrated application services such as security, workflow and content management. Its built-in connection services provide access to leading relational databases, transaction systems and ERP applications.
16] Lotus Notes is an integrated, web-like environment providing quicker access to and better management of many types of information including Domino and Internet-based e-mail, calendar of appointments, personal contacts, web pages, news groups and intranet applications.
17] Extensible Markup Language is a specification developed by the W3C. XML is a pared-down version of SGML, designed especially for Web documents. It allows designers to create their own customized tags, enabling the definition, transmission, validation, and interpretation of data between applications and between organizations.