Business Standard- 30 October 2002
Trade through barter gaining currency
Want to save cash? Barter. Corporate barter
is gaining importance in recent times as most companies
are looking to do business without involving cash.
The Indian barter exchange industry which is estimated
to be approximately Rs 60 crore within a short span
of two years, is expected to explode to about Rs 500-700
crore by March 2005, with competition increasing and
players in the industry making a conscious effort to
expand this industry. Net4Barter is one such company
which is moving aggressively in this space.
Barter is the simplest way of doing business: It consists
of exchanging goods and services without using money
and has grown to cover complex transactions that involve
trading every conceivable type of asset involving often
a number of businesses in multi-way trades.
Companies participating in corporate barter range from
mom and pop stores to large multinationals. In fact,
this is a market where a mom and pop store might do
business with a multinational.
Net4Barter, which is considered to be India’s
first corporate barter (trade exchange) company with
a turnover of Rs 11.5 crore, has projected a turnover
of approximately Rs 36 crore for the current financial
year ending March 2003 and the revenue on this turnover
is projected at Rs 2.7 crore.
Rakesh Bhatnagar, chief executive officer and main promoter
of Net4Barter, is confident of achieving the targets,
said, “The corporates today are getting more aware
of the barter system. Well, one very good reason is
cash flow, a challenge for most of us at one time or
another. Through barter, you can obtain services or
goods you need, without depleting your cash.”
“The exchange can be product for product, product
for service, service for service or a combination of
goods and services. An additional benefit derived from
bartering is that the company you are exchanging with
will often recommend your product/ service to their
clients, giving you free advertising. Large corporates
often use bartering to liquidate surplus inventory,”
he added.
Net4Barter has clients such as Hindustan Times,
Hyatt, India Today, Radisson Hotel, Philips India, Baush
& Laumb, Kellogs, UTV to name a few.
On revenue stream, Net4Barter charges a fee of 10 per
cent of the transaction value. Net4Barter earns more
money through trading in products and services in lieu
of margins.
For instance, if a supplier may offer a product for
Rs 100 and Net4Barter may market the same at Rs 125,
earning Rs 25 on the sale as profit.
Net4Barter in the last one and half years has transacted
over Rs 13 crore worth of products and services, across
range of industries. Presently, it is averaging Rs 4
crore worth of transactions per month.
The company has several plans on the anvil. To begin
with, it intends to expand its domestic operations by
extending reach to possible commercial cities and towns.
According to Bhatnagar, active presence across India
would ensure higher conversions in members as well as
significant increase in turnover
