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B-to-b at center of WebVan, HomeGrocer merger

Published on .

Foster City, Calif.--WebVan Group's $1.2 billion acquisition of HomeGrocer.com, announced Monday, has b-to-b implications. WebVan's value proposition is a recrafting of the grocery industry supply chain, focusing on highly automated, centralized warehouses versus the complex distribution systems grocery chains depend on today. A deal with HomeGrocer gives that b-to-b business model an extra chance of success. The deal also gives the two companiesÏwhich can fairly be described as struggling start-ups todayÏa boost with suppliers, enabling them to improve already healthy margins by 50%, thanks to increased buying power, said WebVan CEO George Shaheen.
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