Barter the Aussie way

RETAIL: First retail barter service to enter India in Feb' 08.

Bartercard, the Australian trade exchange that claims to be the leading exchange in the world, will start retail barter operations in India through an Indian subsidiary in February 2008.

Rakesh Thapar, Indian licence holder for Bartercard, reveals that the company has signed on Steve Waugh and Ricky Ponting as brand ambassadors and is currently putting its franchisee network in place.

Professionals and small to medium businesses, who have an average trade volume (ATV) of Rs 1 lakh a month, will be Bartercard's target in India, and it has set itself a target of 3,500 members in its first year of operation. The company will spend Rs 10 crore on marketing and brand-building.

So how does retail barter work? Like any credit or debit card transaction , except that it is an entirely cashless transaction, says Rakesh Bhatnagar, CEO, Net4barter, one of the largest trade exchanges in India.

Bartercard would extend an interest-free trade line of credit to a member after conducting a credit-check, and he/she can use it to pay for goods and services that he avails of, simply swiping his Bartercard to record the transaction.

He would, in turn, pay for them with his services or goods. The benefit "" he gets to save cash on his balance sheet. If it takes-off, this will be India's first retail barter service.

None of the leading trade exchanges in the country are in a hurry to enter retail barter. Bhatnagar says it'll take at least 18 months before the Indian market is ready for retail barter.

Harish Pillai, CEO of Essel Group's Intrex India seconds Bhatnagar. But if retail barter is yet to take off, barter at the corporate level seems to be working.

Increasingly consumer durables, automobiles, real-estate, FMCG and industrial products companies are also looking at deals, not just for trade schemes but also for core business areas like the sourcing of raw materials.

For instance, Intrex recently helped a power tools company convert Rs 700 crore of excess inventory into media space, machine spares, etc.

For instance, Intrex recently helped a power tools company convert Rs 700 crore of excess inventory into media space, machine spares, etc.