Lecture on Steel E-Commerce in the Middle East 
 

Types of B2B commerce

Different modes are used:
Some sites are seller oriented, example a steel mill, selling online to its clients.
A number of steel mills sell their stock lots already by auction online.

Others are buyer oriented, example Saudi ARAMCO Saudi buying through their own portal, or UAE government bodies buying through the portal Tejari.

Then there are the independent B2B portals, which offer a common market place, to buyers and sellers.
Some ask a fixed fee per year, others ask commission on each transaction

Some E-commerce advantages, & why to be there?

No business hours - you promote or offer your products on line 24 hours.
Cheap communications.
No printed catalogues, you update continuously what you want to buy or sell on line.
You can find updated inventory for available products in the market.
For a buyer, it promises lower procurement costs and lower prices of goods.
For a seller, it offers access to al larger market, faster time to market, and lower sales costs.
It protects your company against competitors. If you are not there, your competitors will be.

The Market

With 7.54 million users, the Middle East takes only a 1.52% share of the 500 million Internet users in the world.
Late start, poor infrastructure and high prices in some areas, or insufficient means or education in the less developed countries, are some of the reasons for the low use.

Nowadays most governments in the Middle East realize the importance, and promote computer and Internet use, by investment in infrastructure, E- government, and early E-learning at school.

Looking at Scandinavia and USA, where internet usage is above 50%, Middle East has still some way to go.

The numbers are quickly growing however with double digits every year.
In 2001, the UAE is with 33% users of its population, already amongst the 20 highest in the statistics of Internet users worldwide.
Well performing countries like U.A.E., Lebanon benefited from good service and competitive prices.
Recently Morocco and Tunisia have invested heavily in their Internet services, and countries like Algeria and Libya are catching up.

Trade online

In 2002 the total world trade through Internet is estimated to be 2,293.5 billion US$. This is expected to grow to 12,837.3 billion US$ by 2006.

Arab trade in 2001 exceeded 250 billion US$, out of which 400 million US$ online sales were carried out online in B2B and B2C. A substantial portion of this online business is through banking.

Projections for Arab trade online are 3 billion US$ for 2003.

Global steel business is estimated at roughly 100 billion US$ per year.

Global e commerce holds the promise of tremendous growth, and new opportunities for business to expand their markets!

It is now to decide if you want to be part of this!

Online sales for B2B and B2C stood at 1.17 billion US$ in the Middle East in 2000. Projections are 7.21 billion US$ for 2003.

It is now to decide, if you want to be part of this!

Web Positioning 

Around 80 per cent of the web's estimated 500 million users, rely on top search engines - like Yahoo, Google, MSN, AOL, Lycos and AltaVista, to find the information they want.

They log in on one of these search engines, and surf further, mostly to the companies they find on the first results page.

Next time you perform a routine web search, look carefully at your top 10 results.
Most users still naively believe the search engine they search on, has simply trawled the web, for the best possible matches.
But most likely, the sites listed high in the rankings will have paid for this privilege.
They do this through a straight pay-for-placement listing, or they use a search engine optimization specialist.

For a search on MSN for “middle east steel” there are 183,016 search results. MEsteel comes no1.

An example of a paid listing on Netscape: 43 results for “Qatar steel”- MEsteel comes on top.

MEsteel gets listed both as paid and normal, on top, for an AOL search on “Saudi steel”

On a “kuwait steel” search on Google, you see a clear example of pay per click, as well as a normal search result, which is gained by metatags and keywords.

Your company may spend lots of money on developing a professionally - designed site, filled with useful information on your company.
But often, flashy pages are incompatible with what search engines look for.
You might find it very difficult to be listed high.
You need to understand what the search engine "spiders" that trawl the web, are looking for.

To really optimize your site, it is important to understand that search engines do 2 basic things: Index text and follow links.
So you need:
-effective use of meta-data (hidden text in your website)
-a good understanding of the words and phrases people will look for
-simplicity of website coding and design.

Each search engine looks for different things: key words, external links, number of hits, so it is important to:
-constantly tailor your site.
-resubmit monthly to the search engines.

Since advertising revenues alone, were not sufficient, to support many dot com companies, search engines applied 3 different strategies to make money:

Search engine such as All the Web, Inktomi, AltaVista, and Google use an automated robot, or spider, to crawl web pages.

They added a paid inclusion option to submit your website, for which they guarantee to include your site and to crawl your site frequently.

Pay Per Click engines rank Web sites by the highest bidder, for a certain word or expression.

In other words, if you bid 25 cents for the keyword "Saudi steel", your account will be charged 25 cents each time somebody clicks on your listing.

Overture remains the king of all Pay Per Click engines.
They also buy visibility and share a large percentage of the “click-through” income with their partners Yahoo, Ask Jeeves, Alta Vista, Netscape and MSN.

Also Google and Looksmart recently introduced their own new pay-per-click systems.

Before, you could submit your site to Yahoo for free.
Now you have to pay $299 to be reviewed in seven days guaranteed.


MEsteel members do not have to worry about these costly and time-consuming procedures. They are automatically included in MEsteel search results.

STEEL E-commerce 

In steel business, as a buyer or a seller, your market is no longer your city or country but the whole globe.
To have more efficient dealings with your present suppliers and to be able to service your customers in a better manner, E-commerce is the answer of today.
Most analysts agree that E-commerce, will affect steel's entire value chain, from the procurement of raw materials to the production of steel to the buying and selling of products on the worldwide Web.
Pricing will become more transparent, and steel companies will be able to reduce staff, inventories and overall costs.

While the steel industry is slowly but steadily embracing e-commerce, there is no consensus about what form it should take.
Some see great promise in the neutral business-to-business exchanges.
Others say private e-commerce sites set up by individual steelmakers are the way to go. Most likely it will continue to be a combination of the two.

-Some neutral sites started too ambitious, with large budgets, and had to close down fast, like Steelscreen, or GSX more recently.
-Others like E-steel, shifted to supply of technology, for steel purchasing, to companies like FORD.
-We at MEsteel, believe a regional independent portal, gives the best answer to the market needs.
Buyers don't want to be restricted in their supplier base and sellers want to reach the broadest possible market.
At the same time MEsteel aims to serve the whole chain, from mills, over stockists, to final steel users, in a limited region where people can transact with each other easily.