Auckland medical and scientific supplies company Biolab Scientific is building a $10 million-dollar online marketplace.
Its plans were revealed at last week's e-commerce summit in Auckland.
The marketplace builds on Biolab’s 18-month-old in-house online direct selling project, Biolab Direct, and may eventually become Biolab’s single interface with customers and suppliers, says e-business general manager, Catherine Calarco.
“Biolab Direct is a sell-side model and has become the prototype for the marketplace,” Calarco says. The marketplace will be powered by exchange software giant Ariba and may later link with other Ariba exchanges around the world, she says.
Biolab Direct will not disappear at this stage. “We see value in having both; they are different projects. But I do expect there to be a decision at some point to see which one to go forward with, and if the shareholders decide to stop funding Biolab Direct we can use the marketplace as our single interface.”
Biolab Direct, hosted at Biolab’s Albany head office through www.biolab.co.nz, has 3000 registered users across Australasia with more than 55,000 scientific, laboratory, research and health products for sale. More than 10% to 15% of Biolab’s business is transacted through the site, valued at several million dollars a year.
Biolab’s marketplace will not only include medical and laboratory supplies but will also offer engineering, stationary, computing and travel products. It will pilot with a group of five customers including AgResearch and five suppliers including office supplies company Corporate Express next month. The marketplace is intended to go live in February 2001.
Calarco says it will launch with suppliers and customers on both sides of the Tasman and soon move into Asia, capitalising on its owners’ connections. Biolab Scientific is wholly-owned by Salmond Smith Biolab, in turn owned by the wealthy Tiong family in Malaysia. Together with its sister company Selby-Biolab in Australia it claims to have the largest scientific distribution network in Australasia. The Tiongs have invested over $600 million in local companies including the Neil Engineering Group, Click Clack, NZ Salmon and a forestry company.
Biolab expects to spend up to $10 million on the initiative over the next year or two with funding from both the local company and Asian shareholders. The project will be set up as separate company with a number of other equity partners yet to be announced. Biolab has been considering the marketplace since January with Calarco, the mastermind behind the Biolab Direct project, working full time on it since May. She outlined her plans publicly for the first time in a workshop at the e-commerce summit.
Arthur Andersen consultants have begun working on the infrastructure. The project is to be hosted by Telecom, using esolutions’ web hosting service and security package Safecom. The exchange will run on Ariba’s newest marketplace product and will launch with online catalogues and transaction abilities. Services such as auctions will be added later.
Biolab’s marketplace comes as, internationally, several marketplaces are struggling to get off the ground and Australia’s corProcure is reported to have faced teething problems. Calarco says Biolab Direct’s experience with logistics and online customer relationships and Ariba’s successful exchanges - including Chemdex and health marketplace Neoforma - led the company to believe the exchange was in good stead.
Biolab's project has beaten a competing health project by Cap Gemini Ernst & Young and esolutions, also based on Ariba, to market.