Continuing our interview spree, I got a chance to be a part of a networking night organized by BBX India, a primer organization which deals in facilitating cashless business transactions amongst its clients. BBX India is a licensed startup of BBX Australia, which was founded by Mr. Michael Touma in 1993. BBX is currently operational in 8 countries world wide with their expansion plans to have Mexico, Kuwait, Singapore, Malaysia, Japan, Iran & Portugal under their business portfolio.
Michael Touma, CEO-BBX with me at the networking night in N.Delhi.
I could draw a short compilation of question and answers from Michael and Anup, who is the chief of sales and marketing in India.
What was the theme behind ‘BBX’ and what is ‘BBX India’ all about?
Business Barter eXchange (BBX) is a public listed company (ASX) offering global payment platform. It’s the only public listed company in Asia Pacific region & a handful in the world. It works as a platform between the businesses where they can trade using their own G&S as a currency to purchase other business G & S, thus a cashless economy in itself.
BBX INDIA is the pioneer of retail barter in INDIA facilitating the SMEs to trade cashless & thus creating a barter economy.
Theme is reciprocal trading platform to help businesses to complement barter trading to their existing cash cycle within their business to reach to their maximum potential & capitalize on the under utilized capacities of any business. Barter by far is the best medium to fight with recession as well where in economy cash is depleting, sales are dropping, dead stock & inventories are very hard to liquidate & creating huge losses, cash competition is very stiff.
Whose brainchild is BBX?
BBX was founded by Mr. Michael Touma in 1993. We have got the licence to start this venture in INDIA, Sri Lanka and NEPAL. Our technology support partner is BBX Australia and we have tied up with ‘Net4barter’ (pioneers of corporate barter in India), thus providing our new joining members an array of bartering options with small, medium & corporate level businesses.
How do you and Michael Touma go along? Does he have stakes at BBX India?
Michael is our associated partner (on revenue sharing basis) and BBX Australia is our technology support partner.
How many people do you have here at BBX India and what are their roles?
Amar: Co-founder & CEO.
Anup: Co-founder, C.O.O and Chief Business Development.
Rohin: Co-founder, Chief of Administration and Trade co-ordination.
What I could understand being here at the networking night is that BBX monetizes itself with a small 10% fee per transaction from the client. Does BBX pay its employees too in terms of kind and cash both?
Our revenue model includes –
Marketing fee:
It’s a membership based community where we initially give an Interest free line of credit to all joining member from Trade Rupees Rs 30,000 to 7.5lac (which enables the members to start purchasing cashless from the network before even giving their own G or S to the other businesses)
Performance based Service Fee:
12% in cash on sales of each transaction
2.2% in barter value on sale of each transaction
Administration fee:
For maintaining the accounts, International web directory listings, proving each member an account manager,
For stats, BBX Australia stats include over Au$ 181Million revenue from just 5000 members, out of which 70% were actively trading member. It’s a volume based business. On each transaction, a fees is generated for BBX INDIA.
What are the steps you take to brand/market yourselves in a country like India where this concept is still not very wide spread?
FYI, 40% of all transactions happening in the world are on barter (counter trading). In India alone 15-20% of the overall transactions are based on barter. People in India still know barter only at the corporate level. However, with our initiative of making the system sophisticated for even the small & medium scale businesses to barter has changed the definition & benefits of barter in Indian businesses.
We are in talking terms with bollywood & cricket legends to be our brand ambassadors in India. Apart from this, we already have major print media on our client list (Indian express, Financial express). Online marketing, Outdoor hoardings across India,Franchise promotions, Word of mouth, Referral programs, Licensee programs, members growing the exchange program, etc. are few other ways to get the name out.
How do you manage the logistics of your business and how do you provide the assurance of service by a small client?
We are a 3rd party administrator between the buyer & seller, logistic may be a problem for corporate barter companies, not for us. We have a card system where member can freely use the card to avail facilities. The biggest assurance to small clients is we have given them an Interest free limit that means right from Day-1 they they can make purchases within that limit & we are not charging any Interest to them, and only when we send them a new business to pay using their G or S they pay us our service fee.
One thing that impressed me about BBX was – it’s different! But have you impressed any of the fortune-500 companies to become your client, you being global yourselves?
Praval, you would be amazed to know if you do some more research that all these major companies IBM, Reliance, TCS etc have all done barter deals but they are mostly one of in nature , such as IBM doing a $40million barter deal for sponsorship by not paying in cash but by proving their Software etc.(the deal is done the association is over)
We are not a one off deal platform; we are basically a platform & are expanding our network on a daily basis to provide more & more cashless trading options to all members. We rather are focusing more on small & medium scale businesses to have the right mix of the transactions happening within our network, but yes we have also done one off deals with fortune companies as well.
Are we going to see a rebirth of similar barter services at large in India or you do not find this to be everyone’s cup of coffee?
There are few barter service companies in INDIA but I’ve found them to be very regional specific because of the lack of technology & mode of operations. Frankly speaking we would love to have a competition, because that would help us as well in lot many ways (Barter would be known to the unknowns & we would could save our bucks on advertising!). Competition shall make it easy for us to cross promote our BBX cards to their network members to provide them more options to do cashless trading with, its just like having AMEX & also a Visa card .
What is BBX India doing these days and what is next on your agenda with a new year just around the corner?
BBX INDIA is very aggressive in its business development plans to expand our network. We are busy with franchise formation, where in 2 are almost finalized. We shall be starting “Price2clear’very soon- An online superstore for barter transactions.
A few things which we have on our list for the next year:
- BBX barter trade nights.
- BBX get together’s..
- BBX barter auction nights.
- BBX Auction portal Real estate: Cashless properties portal listing.
- BBX Money: Barter Trade Loans.
- International bartering.
What would be your final words for our readers?
Think ‘BBX’ before cash!
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{ 3 comments… read them below or add one }
Good One!
feels gr8 !!!! gud effort keep it up!!!!:)
Great interview, very clear and concise.