The World is a small Place

Internet access may vary greatly from country to country, but consumers around the globe reveal strikingly similar practices, plans and perspectives when it comes to the burgeoning new online medium, according to the 2000 American Express Global Internet Survey. The survey revealed that almost half (46 per cent) of all consumers polled are embracing the convenience and global reach of the Internet for a variety of activities -- from communication and research to shopping and banking -- with many more expecting to join the ranks of Web surfers in the coming months. At the same time, however, the findings highlight that Web-related issues making headlines in the US media -- privacy, security and service quality -- are also being voiced as strong concerns, by many consumers around the globe.

Internet penetration and availability varies widely from country to country. At least three out of five people in the United States (66 per cent), Canada (60 per cent) and Australia (60 per cent) reported access. In contrast, only about one-third of consumers in Argentina (35 per cent), Great Britain (35 per cent), Brazil (32 per cent) and Japan (27 per cent) are online today. Sweden tops the ten nations with nearly three-quarters (74 per cent) of the population already surfing the Web.

Electronic commerce in New Zealand

The New Zealand Ministry of Economic Development in August 2000 commissioned a survey by BRC Marketing and Social Research covering New Zealand business use of the Internet to provide background information for the government's e-commerce strategy. The survey indicated that New Zealand's small to medium businesses are ahead of their Australian counterparts in exploiting the potential of the Internet. More than two thirds (68 per cent) of businesses are using e-mail and one third have their own domain name and/or Web site. Only seven per cent indicated that they do not use computers at all. Almost all businesses with 20 or more staff (94 per cent) are connected to the Internet and 68 per cent have their own domain name or Web site.

The survey indicates that, although New Zealand businesses are well prepared, they have yet to come to grips with the implications of e-commerce. While two-thirds of businesses claim to be engaged in some type of e-commerce with other organisations already, only about one in 10 have integrated this activity with their internal business systems.

E-commerce is seen as being important for information gathering, developing the customer base and maintain competitiveness. However, despite the global reach of electronic commerce, only a minority of businesses cite growing exports as being a major benefit.

Insight on the Australian Internet economyCompanies looking to increase their revenues from e-commerce sales should target individuals who are currently not buying on the Web, according to IDC Australia. The researcher predicts that by the end of this year only 30 per cent of those who go online will purchase a good or service, but that percentage will swell to 50 per cent by 2004.

Not only is the number of Web purchasers growing, so is the size of the average transaction. According to IDC, this robust growth will translate into a whopping $US37.4 billion being spent on Internet commerce by the end of 2004 in Australia. This increased likelihood and value of Internet spending will be driven by the growing number of Australians using the Internet, greater availability of products and services offered by a proliferation of local vendors, and improved buyer confidence in security.

According to IDC, in 2001 competition in a number of e-commerce sectors will heat up as established Internet retailers attempt to grow and consolidate their leading positions, new players jockey for a share of the market, and several bricks-and-mortar retail powerhouses move online. In particular the Internet enterprises of bricks-and-mortar companies, with their established customer base and large marketing and advertising budgets, are considered a promising force to drive online traffic.

CEO sentiment for e-business strong

CEOs continue to be optimistic about the impact the Internet will have on their businesses, according to survey of more than 260 of Australia's top chief executives. More than 65 per cent of those surveyed expect e-business to begin contributing more significantly to their business within the next three years. In addition, over half expect the Internet to deliver significant cost savings within the same time-frame. However, despite their underlying optimism about their Net investment, the CEOs surveyed indicate they held clear concerns that some of their e-business efforts might ultimately prove misdirected and that they had not yet seen substantial benefits.

These are some of the core findings of the firs of a quarterly survey of Australian chief executives commissioned by Australia's leading Internet integration company XT3 and conducted by Canberra-based independent consultancy, Classical Economic Analysis.

CEOs were very clear about their objectives and some had established appropriate structures and alliances to achieve their goals, but some had not. Nevertheless, there is overwhelming evidence that CEOs see long-term future in the Internet and that competitive pressures are driving their on-going investment regardless of current levels of return. There is no question that CEOs are feeling competitive pressure to invest in the Internet and that, ultimately, they believe that investment will deliver significant returns.

It was interesting to note that thee was no single approach being taken by Australian companies to maximise their investment. Almost 60 per cent of companies had nominated an e-business champion. Nevertheless, most of the key players within the companies remained involved in major decisions. Not surprisingly, the survey found that larger companies were more focused on deriving revenue and cost reductions from their Internet investment, while smaller companies were moving more slowly, possibly reflecting their limited resources.

Broadband needs support

Australia continues to prove itself as a rapidly maturing, advanced online market evidenced by the wide range of next-generation access services emerging across the country. From broadband access via cable, DSL, and satellite to emerging forms of mobile access, the next generation access market is taking shape. Companies in this space include foreign, domestic and established companies as well as start-up telecommunications and media firms.

Broadband access payers must offer competitive pricing and enhanced utilitarian functions. Mobile access payers must leverage short messaging services (SMS) to introduce consumers to wireless access protocol (WAP) and offer products and services that focus on utility and timely information. Content and commerce players must enter into smart strategic alliances that maximise distribution and marketing opportunities while not committing to or looking in a single service provider technology or platform.

A recent Jupiter Consumer Survey in Australia found that demand for entertainment programming and TV-like content on the PC is limited. Convergent opportunities will revolve around providers leveraging multimedia to enhance utility applications on the PC as well as using interactivity to enhance traditional TV programming.

Australian to benefit from regional IT Outsourcing Opportunities in the Asia/Pacific (excluding Japan) IT outsourcing services market are exploding. IDC expects the market to skyrocket from $US4.8 billion in 1999 to $US10.3 billion by 2004 as more companies turn to outside help to control their network and desktop systems so they can focus on core competencies. IS outsourcing and custom application development were the two largest outsourcing categories in 1999. However, application outsourcing and network infrastructure management services will have the highest growth rates in the region for the next five years among all outsourcing service categories. Australia and New Zealand represented the largest proportion (53 per cent and 14 per cent respectively) of regional outsourcing spending in 1999.

According to IDC, an increasing number of vendors will try to capitalise on this changing paradigm, and competition will be fierce because it is difficult to differentiate offerings in this market. Timely and insightful market intelligence will be critical for Australian service providers wanting to exploit this growing opportunity.

Outsourcing spending will continue to increase in Asia/Pacific as companies struggle to restructure themselves around e-business and compete in the internet economy, simultaneously contending with economic factors such as globalisation, privatisation, deregulation and technological innovations. The long tradition and expertise of Australian service providers in providing clients with innovation, client focused and cost effective outsourcing services will need to be adapted to the Asia/Pacific region to ensure significant opportunities for revenue growth comments IDC.

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