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Let's Lose the Prefix
Soon enough, all commerce will be e-commerce
By ERIC ELLIS
November 25, 1999
Web posted at 4 a.m. Hong Kong time, 3 p.m. EDT
Seen enough of Internet and e-commerce hype? Brace yourself because you ain't seen nuthin' yet!
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A report from Internet research specialists International Data Corp. has calculated that the Asian online population will rocket almost fivefold by the end of 2004. (That should make for a lot of fascinating dinner party conversations in the years ahead.)
And if that number didn't grab your attention, salivate at this one--the amount of money generated by e-commerce will blossom to $87.5 billion region-wide from a current $2.2 billion. And that excludes Japan.
According to Penang Netpreneur Chan Hong Saik, who runs B2B Internet solutions group Ebx.com, numbers like that mean that the term "e-commerce" will soon be redundant. "When we are using the Net, we will simply be engaged in commerce because e-commerce will then be normal," he says.
IDC's research does tend to concentrate the mind. Simple economics suggests that the 40-fold increase in, er, e-commerce does not mean that Asia's struggling economies will grow by the same. To achieve that sort of number means massive migration online from shop-front or factory-door commerce.
In Asia, that theoretically means that some companies--some big slow-moving ones--will go out of business and people will lose jobs. As we've seen vividly in the U.S., the Internet lessens the barrier to business entry and the increased competition will squeeze out those who are slow to adapt.
That's important anywhere but arguably more so in a trade- and manufacturing-oriented economy such as Asia's. Why use the services of a trading company like Jardine Matheson, the ultimate middleman, when the Net means you can buy direct and cheaper from the maker? And unless he or she is your best friend, why go with your existing component supplier when the Net can find you a cheaper one?
But before you start shorting the stocks of stodgy old companies slow to the Net, consider that it will be some time--a long time--before e-commerce really pays off across Asia.
The IDC reckons that China's online population will be 33 million by the end of 2004, some 35% of the region's wired population. That's a lot of users but IDC's regional analyst Peter Hitchen rightly points out that places like China and India remain relatively poor alongside longer-standing but smaller Net populations in Hong Kong, Singapore, Japan and Australia.
He says China's online spending will reach just $221.7 million by the end of next year. Despite its massive population, that's just 4% of the region's total anticipated spend. India, which will breach the billion mark some time early next century, ranks even less.
If nothing else, IDC's material underlines the enormous potential that exists for B2B Net use, the unfashionable business-to-business end of the market where community is less important than efficiency and delivery.
In places that don't or can't spend, big numbers don't mean as much when it comes to the mass consumer Net. All of which reminds me of that saying that Brazilians use to describe their country: it's got a lot of potential. And always will have.
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