Nestlé and Danone create joint Internet market

Business-to-business electronic commerce is taking off in Europe. The Swiss-based food giant, Nestlé, and its French competitor, Danone, are joining forces to create the first European electronic market place for procurement in the consumer goods sector.

Business-to-business electronic commerce is taking off in Europe. The Swiss-based food giant, Nestlé, and its French competitor, Danone, are joining forces to create the first European electronic market place for procurement in the consumer goods sector.

In a joint statement, the two groups said the platform “will enhance the efficiency of logistics while at the same time reducing procurement costs for businesses producing, distributing and selling consumer goods.”

Nestlé and Danone said the initiative would help cut supply costs through automated processing of orders and sales.

“Buyers and suppliers will be able to place orders on catalogue offers, call for bids and participate in auctions,” the groups said. “They will also have access to sourcing services for raw materials and packaging, as well as capital goods and services.”

The two rivals believe that besides simplifying procedures, the new market will lead to big price cuts.

“Participants will benefit from a more efficient market and lower costs through higher transaction efficiency and simplified procedures,” according to the companies.

The move had been expected, and is seen as a strong sign of the take-off of business-to business electronic commerce on the Internet. So far, most Internet based e-commerce has been consumer oriented.

In the United States, the Grocery Manufacturers of America association said last Thursday that 50 food, beverage and consumer product makers were planning a similar electronic market place, linking all participants in the industry’s supply chain.

The new European platform, called CPGmarket.com, is scheduled to go on-line in July, according to Nestlé and Danone, and other companies will be asked to join the founding partners.

They said the market place would be based on the mySAP.com e-business platform developed by German company SAP.

swissinfo with agencies