Contractors could make savings of up to 15% through buying building materials online, according to Seamus Rodgers, general manager, Tejari Marketplace Operations.
Around 600 construction companies in the UAE, as well as in Qatar and Kuwait, are currently using Tejari’s system to trade online. The company’s software allows buyers to bring the price of building products down through online auctions.
“A buyer will put a requirement online for a certain type of product and give a starting price,” said Rodgers.
“Suppliers are then alerted to the auction, so they can bid online. A buyer can run the auction over a matter of hours, or longer, to get the price he wants. The prices are forced down through the suppliers’ bidding – that’s where you get the saving.”
Using the internet to buy materials also gives buyers access to a wider net of suppliers as well as increases transparency when it comes to audited transactions.
“Every flick of the button can be audited, so the days of unethical practices are gone because the buyer and his managers can see everything that’s going on,” added Rodgers.
Despite attracting a large number of traders to buy and sell online, there is still some way to go before construction companies in the region fully embrace e-procurement, said Rodgers.
“As with any evolution of a technology, there’s a good degree of education that is needed, and this is something we put a lot of time and effort into. We have the ‘design academy’ within the organisation and part of its role is procurement awareness activities to help overcome the reluctance to internet trading.”
Over $1.3 billion worth of business was transacted through Tejari in 2006. The government sector accounted for 60% of the value of transactions through Tejari, with 40% from the private sector.
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