The e-procurement contract comes with a whopping cost of RM250 million to build and is currently into the stage of basic implementation of the data center.
To date, there are already 28,000 Malaysian suppliers and 3,500 government agencies registered with Commercedotcom's data center. The system is targetted to go live on October 6, 2000.
In an exclusive interview with CNET Malaysia, George Gan, president and CEO, Commercedotcom said this project is part of the government's annual procurement budget of RM10 billion.
the Multimedia Super Corridor (MSC)-status company had identified four revenue streams to bring the dollars in.
The first would come from a subscription fee of RM150 per year to the government once the project goes online. Currently, suppliers are charged RM250 a year to register.
The key revenue stream where 90 percent of the company's revenue is expected to come from would be the 0.8 percent charge on each transaction conducted.
"We are imposing this charge on transactions with value of up to RM1.2 million. If the transaction value goes higher than RM1.2 million, there is no additional percentage charged. Also, we will start charging only if companies have secured a contract from the intended government body," said Gan.
Commercedotcom will also be giving free upload of up to ten product catalogues once the supplier registers. For each additional catalogue, the company will charge RM50 per catalogue.
The company also expects revenue to come from its hosting services.
Once the project is rolled out successfully towards the end of this year, Gan is confident of taking on the world next.
"We believe e-commerce is not a passing fad. This project will be profitable if e-commerce is a reality. If it's all hype and if we fail, then e-commerce has failed," said Gan.
He admitted, however, that there are currently a lot of hype surrounding the e-commerce market.
"Many people still do not truly understand about e-commerce, thus, the hype. It is most naive to think of e-commerce only as a way to sell Malaysia products to the world in lightning speed. Business-to-business (B2B) had to first be about lowering the cost of doing business," said Gan.
"For example, a transaction of RM1.2 million at a charge fee of 0.8 percent would only be RM9,600. Under the conventional and traditional business structure, it would have cost a company 30 percent to 40 percent of the RM1.2 million to complete their fulfillment commitments," he said.
Couple of things, added Gan, need to happen in order for e-business to be successful--to build a world class system and to create a critical mass.
"Companies also need to have deep pockets and be patient to ride through the gestation period. This period may be two or even five years depending on the creativity of the company," said Gan.
He also advised new start-up companies to cautiously apply business model from the US here as both countries are culturally different with a very different level of Internet penetration rate.
Commercedotcom is located at a 20,000 square feet office at Cyberjaya and has 150 staff.
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