E-commerce not purely a US phenomenon

Growing Internet use will lead to booming electronic commerce revenue outside the US in this year's fourth quarter and worldwide e-commerce revenue in the quarter, which marks the all-important Christmas shopping, is expected to grow 85.5 per cent to $US19.5 billion from $US10.53 billion in the fourth quarter of 1999, according to research released recently by Gartner Group.

Japan's e-commerce spending will grow 184.8 per cent from the year earlier quarter, to $US1.31 billion from $US480 million, with the country's share of global spending jumping to 6.7 per cent from just 4.4 per cent a year earlier. Revenue in the rest of the Asia/Pacific region will increase 90.5 per cent over the 1999 quarter and Europe's e-commerce spending will increase 96.4 per cent, Gartner said.

The booming growth in all these markets will outstrip the increase in North America, where fourth-quarter e-commerce revenue is projected to grow 69.9 per cent to $US10.72 billion from $US6.31 billion in last year's fourth quarter.

Growth will be even greater in the rest of the world outside these main regions, with an expected increase of 189.9 per cent. These other markets will see a total of $US520 million in revenue, up from just $US180 million a year earlier. Collectively they will make up 2.7 per cent of global e-commerce spending, up from 1.7 per cent in the same period last year.

E-government far short of potential

Researchers at Brown University in the United States recently conducted the first nationwide content analysis of state and federal government Web sites during which they determined that government at all levels is not making full and effective use of commonly available information technology.

The researchers rated sites on whether they gave citizens clear information about contacting government offices, offered online services like vehicle registration or searchable records, provided high-quality access for citizens with disabilities or limited English, and had policies to protect security and privacy.

The respondents were enthusiastic in their support of e-government initiatives. They are convinced that information technology can improve the delivery of services to citizens, make government more efficient, and reduce operating costs. Eighty-six per cent of respondents said e-government has improved service delivery, 83 per cent said it has made government more efficient, and 64 per cent said it has reduced government costs.

Non-PC Internet devices spread

Media Matrix has found that 7.4 million US households in July 2000 owned non-PC digital devices. This included cellular phones, personal digital assistants (PDAs) and pagers, that receive data from the Internet and other digital networks such as short messaging systems (SMS). This represents a 12 per cent increase, or 48 per cent annualised growth, from April 2000 when 6.6 million households reported owning non-PC digital devices.

Handheld devices are expanding access to the Internet and other data services. Almost 1.4 million, or about 20 per cent, of the households that own these devices, do not own a PC. Moreover, between April and June 2000, ownership of these non-PC devices grew twice as fast among households without PCs than households with PCs. The largest growth in non-PC households is in wireless phones.

Commodity buyers will turn to online exchangesWith the advent of online markets, commodity buyers increasingly will use e-marketplaces to control the costs of their raw materials. A report from Forrester Research determines that while most commodity e-marketplaces can't yet muster the volume required to create NASDAQ-like exchanges, information flowing from these venues will empower purchasing managers to attack their supply chain costs.

Buyers will increasingly use e-marketplaces to attack costs in a variety of ways. Initially, they'll intensify the competition for their existing contracts. As pricing indexes emerge, firms will adopt shorter-term, flexible contracts and use financial products like swaps and options to control volatile prices.

Forrester concludes that raw materials purchasers will use online venues to exert increasing control over upstream suppliers by expanding their online buying through four stages:

Intensify competition

Unbundle supply chains

Transition to spot markets

Manage price volatility

Heavy demand for supply chain services

With the Internet quickly becoming a global channel for business-to-business integration, opportunity for providers of supply chain services is booming. According to IDC, revenues in the worldwide market will explode from $US25 billion in 1999 to almost $US140 billion in 2004.

Organisations that want to stay competitive in the digital economy have turned to their supply chain as a source not only of short-term financial improvements but also long-term competitive advantage in terms of cutting-edge business integration and delivery models. This need to overhaul the supply chain is making them seek the assistance of supply chain service providers, and these types of projects will drive growth in the industry for the next few years.

In addition to being larger, the supply chain services market will significantly change in many other ways over the next few years. The projects will become increasingly complex, the number of technology solutions and media available will multiply, the competition will intensify, and clients will have higher expectations. According to IDC, these changes will force vendors to enhance their supply chain service portfolios to deliver a full range of solutions. Another offshoot will be more alliances with software vendors who deliver Internet-enabled supply chain management products and other e-Business applications.

Online retail sales could double

With only 73 online shopping days left in this year's holiday buying season, estimates are beginning to emerge that there will be a dramatic increase in online retail sales during the fourth quarter.

The latest forecast by Gomaz Advisors estimates that online retail sales during the fourth-quarter holiday season will reach $US11.4 billion, more than double the $US5.2 billion in sales reported by the Department of Commerce during the same period last year. The firm said several thousand retailers representing the entire business-to-consumer industry were included in the survey.

This year's growth will be driven by an increase in the number of people who view the Internet as a valuable shopping tool and a greater focus on cross-channel marketing by traditional brick-and-mortar companies, according to the Gomaz forecast. In addition, increased revenue could also result from what Gomaz says is a move by companies to conduct less online marketing to attract new customers and more targeting marketing for existing customers.

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