Anyone for eTea?

1999-10-15

Few examples than this one offer a clearer impression of how the Web can change the way the World does business. According to Bloomberg, a site is to be launched early next year which enables tea producers in Africa and Asia to trade tea with UK-based tea companies.

The tea market in the UK has both consolidated and dwindled since its heyday. 40 years ago, tea auctions dealt with up to 150,000 tons of tea per year whereas last year a mere 24,000 tons were sold. The reasons for this are mainly to do with tea auctions moving to producer countries, such as Kenya. The result has been that only the bigger players (who can set up bases abroad) still remain in the game, with smaller companies having to work through the two remaining UK-based tea brokers.

The Internet looks set to change all of this. An online auction would enable tea producing companies, large and small, to work directly with smaller companies in the UK. Intermediaries would be required only to manage the auctions (hence the site) and for shipping, meaning that the costs of working through such players as brokers would be greatly reduced. It is no surprise that the company intending to set up the site is a brokerage company, Thompson Lloyd and Ewart Ltd. The company intends to run the business in parallel with its brokerage.

Using the Internet as a transport mechanism, online trading would enable costs to be reduced and savings to be passed on to producers and customers alike. In fact, what is happening is a return to the more traditional modes of trade, with small traders dealing directly rather than relying on the few companies that remain since “value” became the catchword and consolidation the practice. The Internet is the great leveller, reducing the costs of both entry and ongoing business, allowing large and small to compete on the same playing field.

What is more, the Internet is global. Tea trading has occurred in the UK because it always has, but this no longer needs to be so. Suppliers to tea-drinking markets around the world will be able to profit from the global accessibility of online trade in a way not possible before. Who knows – they might even start drinking it in Boston.

(First published 15 October 1999)