C. G-S: We have integrated logistics at a global level. So a buyer can go to our Website and see samples of potential fabrics, order online and receive a sample via TNT (a courier service) in 24 hours anywhere in the world. The TextileSolutions marketplace was officially launched in March 2000. It has currently more than 200 applicants, and 261 signed members, of which 137 are suppliers. The first transactions on the marketplace commenced in late April.

Q: What is the added value that TextileSolutions offers compared to the long-established, if very conservative, system of textile buying and supplies?

C. G-S: It gives a lot of added value to an unknown company, a supplier of textiles, for example, to have a one-stop portal like TextileSolutions to post its products and have a site where queries can be dealt with 24 hours a day, especially since the company does not need to be technology-wise. It only needs access to the Internet and TNT. TextileSolutions’ market place offers suppliers a complement to traditional market channels, being more efficient and less costly than agents, fairs or a sales forces. TextileSolutions also provides new and current customers with an efficient search and ordering tool that reduces costs for all parties. With more than 60,000 sellers in Europe alone, it is difficult for any buyer to get a good overview.

The main advantages of our approach are:

1. Increased market transparency: suppliers get access to new markets as well as new customers in old markets. Customers are offered a global market overview, enabling them to compare offers efficiently. Search by products also enable customers to locate suppliers of particular fabrics.
2. Reduced transaction costs: Through an online and standardized ordering process the cost for each transaction is reduced -- administrative work is streamlined. By offering "one stop shopping", 24 hours a day, 365 days a year, you create a more efficient transaction process. Decreased dependence on industry fairs and agent availability means shorter lead times.
3. Information database: with the increasing number of customers, you can build up an extensive database containing both supplier and buyer information.

Q: How do you operate?

C. G-S: Essentially, we offer ourselves as a transaction intermediary. Companies sign up with us for an association fee -- less than it would cost to build their own Website, and pay a small percentage of any deals completed through TextileSolutions (again, much less than a credit card charge). At the moment we deal only with wholesale buyers and sellers of fabrics. Retailing and the sale of garments is too complex, but we are considering going into industrial and medical textiles. TextileSolutions’ business model is based on revenue streams initially coming from commission and subscription fees. When the number of members has reached critical mass, services from the Internet portal will also generate revenues. In addition there will be income in the form of kickbacks from 3rd party service providers.

TextileSolutions is initially targeting fabrics for sports, leisure and work wears. Growth in sports and leisurewear has been very strong, as sports brands have moved into fashion (i.e. Adidas, Nike) and fashion brands have moved into sports (i.e. Polo Ralph Lauren). Europe and USA represent 78% of the total retail value in the sports segment.

This segment includes textiles that are well suited for Web-interfaced purchasing. Additionally, buyers and suppliers generally have a higher degree of technology maturity and innovation adoption, compared to other more conservative segments.

Q: How much e-competency does a company need to create in order to participate?

C. G-S: Not much, but we also train suppliers in what they need to know, building their Website for them if necessary, photographing their fabric samples and putting them online. One major return for them is that they get to do business with buyers who receive credit rankings from Dun and Bradstreet, i.e. the buyer has credit worthiness, which we publish. And we ensure that suppliers are really there to trade. You cannot sign up with TextileSolutions unless you can prove you are already in the business.

We have 45 people at a global level in eight offices around the world. By the end of 2000,TextileSolutions will have operations in nine countries We are not just a Website. There has to be a direct contact. The textile industry is very conservative and it is very difficult to get people to change their trusted habits. That is normal. So we put a lot of effort in helping them change.

Q: But now you have set up the structure of support, is it easy to get companies to understand what you have to offer?

C.G-S: Yes and no. The buyers see that we can make the business easier, more cost-effective and less time-consuming. But very few companies deal with the whole world, especially in the fashion industry. As for suppliers, in Hong Kong, South Korea and Thailand, entrepreneurs see immediately the advantages e-commerce can give them. In our experience, the developing countries are more adaptable to the advantages of using a collaboration tool based on B2B. They see us as a gateway to open their market. It is attractive and the cost is minimal to gain exposure at a global level and to a market that was very difficult to reach before.

There is also great interest among buyers to get into better contact with developing countries. Marketplaces like TextileSolutions breaks down the geographical boundaries and information flows more easily.

Q: With an emphasis on the logistics.

C. G-S: Right. We are not trying to put ourselves between buyers and suppliers in the negotiations for the final contract. That is worked out between them in the usual commercial way.

Q: Where do you go from here?

C. G-S: We are concentrating, as a first step, on textiles for apparel. We are still working on bulk supply logistics. As you are probably aware, courier services cover the world only for something that has to go by air. There is no single bulk logistics company. The major shipping companies work through contractors. We want eventually to set up a system that could guarantee delivery in two weeks.

We see great potential for other revenue streams, for example, personalized advertising, where suppliers pay for customer information and expose their offers directly to their customers. This service is currently only available through TextileSolutions’ marketplace.

When market volume has increased, there will be a possibility to generate trend reports. Having factual aggregated information, on what designers are interested in and what colours they purchase, is very important for other designers, suppliers and trend magazines. This information is presently unavailable and has been valued highly by the user group.