MICE Affairs Media Group, Special Feature, 13 August 2023
MICE is the talk of the town these days, basis the growth this particular segment has registered in Indian MICE industry. Organizations who were doing business between 30-40 Crores in a financial year are aiming at 200 crores plus.
With the growth in business the buyers are adopting new practices too. One of them being the e-bidding process to select right vendors for MICE services. But is it worth? Is it really serving the purpose? Allow me to put my point here through this column…
Generally, the objective of the E bid or reverse auction is to bring efficiency, bring transparency, cost efficiency and time saving.
But does it really serve the purpose when it comes to complex large scale mice movements & ultimately who is the ultimate winner at the end? Is it corporate, Mice Service provider, DMCs or someone else?
While speaking with few MICE professionals, they have shared interesting insights into current practices followed by many mice service providers to get into the top slots of E-bid. As per them, It is only & only by underquoting heavily at the time of bidding, particularly when the volume of business is large & corporate spend is pretty decent.
At the time of bidding, in most cases, no blockings of services are made apart from one or two small components that too in rare cases. (This differentiates services from commodities/Goods). Generally, highly Volatile elements like airlines are heavily underquoted & land elements are little less underquoted as volatility is not that high when it comes to land services A condition is always put by service providers “ air seats are subject to availability & airfare is subject to change”.
As they know it really well, that finalization of such complex events is a time consuming process and no corporate is going to pay advance immediately and agent would have enough time to play gimmicks once he get into the top slot of L1 & L2. His only objective at the time of bidding is to get into the top slot. Generally, such agents are those who are highly desperate and are not known in market for their services and are always ready to do anything & everything to grab the businesses.
Agents know well that a corporate who is spending 10-20 crores on its channel partners, would certainly be looking for a return on investment and he would not mind spending a few crores more later to achieve this objective. Therefore, agent’s primary objective is to first grab the top slot by underquoting and than begins the real game and corporate has no option but to play in his hands as corporate too would not want to spoil the entire MICE Project just because of 8-10% more spend. And finally, he agrees to spend this amount willingly or unwillingly. At this point, entire e- bidding/reverse auction activity and its objective of cost saving & time saving etc go for a toss, as he would be spending much more than what realistic guys had quoted them at the time of E-bidding.
E-biddings are definitely a powerful tool for products but services through e-bidding can be definitely challenging.
What do you think on this process? Do you face the same challenge while e bidding? Or do you think these views are biased basis one didn’t have enough risk-taking abilities to grab a deal? Or it’s a fair process in other businesses, then why not MICE? Let me know via email to [email protected]
PS: Above views are basis the conversations with top MICE players from India. If you have a different view, we would like to hear your perspective too. So get in touch with the team to hear your side of story too.