SingTel CEO bullish on B2B

SingTel CEO Lee Hsien Yang is optimistic about B2B in Asia

By Kristie Lu Stout
CNN.com Writer

HONG KONG -- SingaporeTelecom chief executive Lee Hsien Yang remains a confident supporter of business-to-business e-commerce in Asia, despite weakening market conditions.

Lee sang the praises of e-commerce efficiencies to celebrate the Sesami.com and Asia2B merger Wednesday night during a visit to Hong Kong.

SingTel, which has an 89 percent stake in Sesami.com, will have a 44.5 percent controlling stake in the new entity.

Lee told CNN.com that even in a fragmented market with many small players, "We are the most credible one and have the best transaction volume to date."

Lee anticipates that after the merger, combined turnover will hit $320 million a month from trades generated by 1300 participating companies including Swire Group, Singapore Airlines and SingTel.

"Why get involved in B2B? SingTel has procurement needs of our own. This is a way to gain efficiencies for ourselves by putting ourselves on the platform," says Lee.

Lee rejects the notion that the downturn in the dotcom sector and general market malaise would compromise the success of SingTel's investment.

"There is a difference between a company founded by entrepreneurs and Sesami. Sesami is started by sizable entities. It is well funded and capable."

Singtel's e-commerce partner Asia2b is an e-commerce consortium including Hong Kong blue chips Swire Group, Jardine Matheson Group, and Sun Hung Kai Properties -- companies that represent 20 percent of Hong Kong's GDP.

The new company would have a combined paid-up capital of $72 million and cash of more than $42 million.

Merger a natural consequence

Analysts says the merger was a natural consequence of two geographically close online marketplaces sharing the same technology platform and competing for limited turf.

The deal also sets the stage for consolidation in the struggling business-to-business Internet sector in Asia.

Lee forecasts more Asian B2B consolidation during the next year as Sesami will be eyeing acquisition targets in Korea and Japan.

Industry watchers say the merged entity will have to navigate a difficult market as the growth of e-commerce transactions in Asia had been slower than previously predicted.

"There is a general downturn. But what they've done is positive," says Merrill Lynch head of Internet research Matei Mihalca.

"It's what you need to do right now. Provide services first and get transactions later."

SingTel beats profit forecasts
January 30, 2001
SingTel leads Asia B2B consolidation
January 31, 2001

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