A dozen top retailers revealed plans to build a worldwide business-to-business marketplace that could rival the recently announced exchange backed by Sears Roebuck and Co. and Carrefour Supermarche SA, a major French retailer ("Sears And French Retailer Team For Online Exchange," InformationWeek, March 6, 2000).

Also, six leading auto suppliers are exploring opportunities to develop their own Internet supply chain, which could compete with--or work with--a marketplace planned by the Big Three automakers. "They all want a piece of the action," says Steven Kafka, an analyst with Forrester Research.

These two exchanges represent big chunks of their respective markets. The auto suppliers have a combined purchasing power of around $500 billion, according to Eric Kintz, head of the U.S. E-commerce practice for Roland Berger LLC, a global strategy consulting firm.

The new WorldWide Retail Exchange will facilitate trading among 12 retailers that have more than 100,000 suppliers, partners, and distributors and earn some $321 billion annually. Participants in the retail exchange include Albertson's, CVS, Kmart, Safeway, Target, and Walgreens in the United States; Auchan and Casino in France; Royal Ahold in the Netherlands; and Kingfisher, Marks & Spencer, and Tesco in the United Kingdom.

The retail group is investing $100 million in the exchange and expects to see savings "rapidly exceed initial costs," a CVS spokesman says. Other retailers are welcome to join the exchange, which is scheduled to go live by midyear.

Of course, other retailers could also opt to work with Sears, Carrefour, German retailer Metro AG, and U.K. retailer J Sainsbury, which are building GlobalNetXchange. The four companies account for about $140 billion in annual purchases from suppliers, partners, and distributors.

The CVS spokesman says there are no competitive issues with the Sears-Carrefour effort. "We looked at that and felt we had more in common with the group of retailers in this exchange," he says.

In the auto industry, the decision by DaimlerChrysler, Ford, and General Motors to build an exchange to buy auto parts, raw materials, and components posed a challenge to their suppliers. To figure out how best to protect their own interests, the auto suppliers are beginning a months-long study into online supply-chain options. The participants--which include Dana, Delphi Automotive Systems, Eaton, Motorola, TRW, and Valeo--say anything they do will be complementary to other industry initiatives under way.

Like the automakers, the suppliers want to squeeze inefficiencies out of their supply chains to reduce procurement costs from $100 to $10 for a single order.

Dana, for example, wants to reduce the number of suppliers it uses, which tops 86,000. Within four years, it wants to cut $1 billion out of the $8 billion it spends on supplies annually, a spokesman says.

If the suppliers set up their own exchange, it could challenge the automakers' ability to streamline their own procurement process. However, if the groups tie their exchanges together, it could produce an extended supply chain that would include everything needed to make and assemble an automobile.

Forrester's Kafka says both the auto suppliers and the retailers are stepping out on their own in order to reap any potential profits earned from industrywide exchanges.

Several other E-marketplaces were unveiled last week. Bank of America Corp. inked a deal with Ariba Inc. to develop an exchange for Bank of America's customers as well as a suite of business-to-business financial services. The marketplace, to be operated by a newly formed subsidiary called Banc of America Marketplace LLC, initially will focus on the bank's 2 million business customers and will provide access to the bank's preferred suppliers at negotiated contract prices.

IQ4hire Inc. says it will open an exchange for the research and procurement of IT services on May 1. It initially will provide Siebel Systems Inc. and Oracle customers with the resources needed to hire related services providers. As

the marketplace matures, IQ4hire will increase its resource base to accommodate buyers of services for additional E-business applications, such as E-procurement, as well as customer-relationship management and enterprise resource planning applications.