Philip Morris provides an industry Oasis

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Philip Morris World Trade has reported a successful take-up for its business-to-business ordering application and information system,"OASIS", developed late last year.

The system enables the company's duty-free direct customers to order Philip Morris tobacco products online with a secured access using the latest technology. Live since the beginning of 2000, this supplier-centric initiative is being extended to the World Travel Retail Division of Kraft Foods Switzerland confectionery products.

Philip Morris World Trade said its online trading record to date is good proof of the concept's feasibility.

Philip Morris World Trade manager information systems Michel Regamey explained the progress of the project to travelretailworld.com: "The majority of our key business partners, based throughout the world, use the online platform and account for over 70% of our monthly volume. The real time update of order information (quantity, price, and delivery details) is one of many benefits delivered which is highly valued by our business partners."

Regamey confirmed that the company may extend the concept to other suppliers. "At Cannes we had many discussions with both retailers and suppliers of the duty-free market as to whether the industry should develop an online exchange", he said.

"Everybody would like to develop the e-commerce marketplace and we believe that an independent and neutral exchange should be the way forward".

TRW comment: The marketplace for B2B exchange sites has developed rapidly over the past 24 months with launches such as dfbexchange.com and others including TobaccoConnect and eSkye (for the drinks industry) helping create a crowded and confusing picture for travel retailers. One expert, Forrester Research, predicts e-marketplaces in all sectors will undergo massive consolidation in the next three years leaving less than 200 global players. The primary value of trading hubs has to come from supply chain efficiencies such as reducing inventory and information sharing-rather than reinforcing vested interests. Travel-retail buyers will certainly move into net markets but those with a distinct value proposition and a neutral, vertical market structure are most likely to succeed.