That e word

Europe's label converting market has been slower to embrace the benefits of B2B e-commerce than its North American counterpart. This is partly a reflection of its more conservative business profile, and partly because of its highly fragmented nature: Most European label converters are small, locally/regionally focused companies. However, in today's buyer-driven marketplace, cost reduction is essential for profitability, and e-commerce has proven it can deliver real savings.

EDI, the oldest and least flexible e-platform, remains the mainstay of e-commerce in Europe, but label industry suppliers are exploring newer avenues, including the fast-growing Internet-based networks. Using a common technology platform, they facilitate access to a wide range of information, sales, purchasing, logistics, and payment transactions.

While there are many “public” B2B exchanges run by industry consortia and fee-based for participants, “private” exchanges are being operated by leading suppliers to facilitate their own customers' transactional needs.

Retail consortia and other end-user alliances also are creating private exchanges to manage their purchasing via on-line tendering and auctions. Examples are Wal-Mart's LabelLink, effective in Europe as well as the US, and Transora, run by a group of influential purchasers that include Kraft, Procter & Gamble, Unilever, and Nestlé.

Label converters remain suspicious, however, of the security and confidentiality of such private exchanges. As a result, FINAT and EPSMA are currently developing an industry-wide XML data exchange standard that should guarantee absolute security.

Once established, this may help disperse the “big brother” image of e-commerce in the eyes of the converters — and encourage them to use it to enhance their buying power.

AWA Alexander Watson Assoc. is an international market research consultant company for the converting and packaging industries.

Subscribe to PFFC's EClips Newsletter