E-Primers for the Information Age

Preface

• Many countries in the Asia-Pacific region are working to prepare for globalization and the information/communication revolution
• Decision-makers and regular people alike see the importance of making their societies competitive in the information economy
• The e-ASEAN Task Force and UNDP-APDIP believe countries can meet the challenges of the information age through information/communication technologies
• With these technologies countries can develop economically, politically, and socially
• E-primers on the information economy, society, and polity can aid policy makers
• The e-primers aim to provide a clear understanding of the terminology, definitions, trends and issues of the information age
• E-primers consist of examples, lessons, and practices to help with crafting policies and strategies
• The following titles are e-primers: The Information Age, Nets Webs and infrastructure, e-Commerce and e-Business; Regulatory Issues, e-Government, ICT and education; Biotechnology
• E-primers are available online: www.eprimers.org and www.apdip.net.
• UNDP-APDIP wants to create an ICT-enabling environment via advocacy and policy reform in the Asia-Pacific region
• The e-ASEAN Task Force is an ICT initiative of the 10-member Association of Southeast Asian Nations.

Introduction

• E-commerce and e-business are now a part of business strategy and are an economic catalyst
• ICTs have revolutionized relationships within organizations and businesses
• ICT enables productivity, encourages customer participation, mass customization and also reduces costs
• Traditional markets vs electronic marketplaces are narrowing, and strategic positioning and utilizing the necessary human capital skills is key
• E-commerce, combined with strategy and policy, allows small and medium enterprises to compete with larger businesses
• Developing countries receive increased access to the global marketplace
• Developing countries are participating in e-commerce as buyers and sellers
• Relatively underdeveloped information infrastructure must be improved to facilitate e-commerce growth

Policy Intervention Areas for E-commerce Growth

• High Internet access costs (connection, service, communication)
• Limited availability of credit cards and nationwide systems
• Underdeveloped transportation infrastructure
• Network security and safeguards
• Lack of skilled human resources/IT workforce
• Content restrictions on national security affecting information services sectors
• Cross-border issues such as transaction recognition in ASEAN countries, certification services, and customs
• A shift to a capital intensive solution is not apparent due to low labor costs

Internet commerce as a tool for developing countries

• Internet commerce is a powerful economic tool for developing countries
• Small and medium firms appear to negligibly use the internet for commerce
• Better SME business is promised, and sustainable economic development, via e-commerce
• Realization is based on strong political will, good governance, and private sector support with an effective policy framework.

Concepts and Definitions

• Electronic commerce: a range of online business activities for products/services or any business transaction where parties interact electronically instead of physically
• E-commerce commonly refers to buying/selling via the Internet, or any transaction involving ownership transfer of goods or services through a computer network
• E-commerce is the utilization of electronic communications and digital information processing tech for business transactions to transform relationships to make value
• In 2000 International Data Corp. tallied global e-commerce at $350.38 billion, with projections to climb to $3.14 trillion by 2004
• The IDC predicts Asia's share in worldwide e-commerce revenue will jump from 5% in 2000 to 10% in 2004
• Asia-Pacific e-commerce revenues are projected to balloon from $76.8 billion by year-end of 2001 to $338.5 billion by 2004

E-commerce vs e-business

• E-commerce and e-business are distinct
• E-commerce means using ICT in inter-business transactions between firms or business-to-consumer transactions between firms and individuals
• E-business means using ICT to enhance the business, such as any process conducted over a computer network
• E-business is “the transformation of an organization's processes to deliver additional customer value through application of new economy tech, philosophies & computing”
• Three primary processes enhanced in e-business are production, customer-focused and internal management

Production Processes

• Procurement, replenishment of stocks, electronic links with suppliers, processing of payments and production control processes

Customer Focused Processes

• Promotion and marketing, selling over the Internet, processing of customer orders/payments, and customer support

Internal Management Processes

• Employee services, training, video conferencing and recruiting, internal information sharing
• The processes improve sales force productivity and communications for internal business information is made more efficient.
• The Internet economy is broader than e-commerce and e-business because it includes them
• The Internet economy pertains to all economic activities using electronic networks as medium for commerce and purchasing app services like enabling hardware/software
• The Internet economy has 3 segments: physical Infrastructure, business Infrastructure, and commerce.
• The Center for Research and Electronic Commerce at the University of Texas has a framework for seeing how the Internet economy works in four layers including intermediaries

Types of E-commerce

• Business-to-business (B2B), business-to-consumer (B2C), business-to-government (B2G), consumer-to-consumer (C2C), and mobile commerce (m-commerce) are all types of e-commerce
• B2B e-commerce is between companies which comprise 80% of e-commerce activity
• B2B segment components include logistics (transport, distribution, warehousing), application service providers, Web hosts, security & customer care, auction solutions software and content management software
• E-markets are websites where buyers and sellers interact and transact
• Common B2B models are IBM, Hewlett Packard, Cisco and Dell.
• Common B2B applications include supplier management, inventory and distribution, channel management and payment management

B2B E-commerce Projections

• eMarketer projects the share of B2B e-commerce in total global e-commerce will jump from ~79% in 2000 to 87% in 2004
• B2C decline to ~13% of e-commerce in 2004
• B2B revenue are expected to exceed $300 billion by 2004 in the Asia-Pacific region The projected size of B2B e-commerce includes:
• $1,600.8 Billion, North America
• $ 300.6 Billion, Asia/pacific Rim
• $ 797.3 Billion, Europe
• Transaction costs: Significant cost reductions through B2B e-commerce includes; search costs when looking for information about prices, products, suppliers.
• Effort, time, and money savings are more efficient using the Internet than traditional communication methods.

SME access to global markets

• B2B e-markets allows suppliers and buyers to interact directly, eliminating the need for intermediaries or distributors
• New variations of new intermediaries can be also considered e-markets, because they come between suppliers and customers
• E-markets and other benefits to increase transparency because a large amount of buyers/sellers reveals market price+transaction processing and are readily accessible information to members of the community
• Buyers also has more buying time and it expands to multiple borders with better pricing
• B2B e-markets aggregated to create competitive prices with traditional economies of scale

B2C E-commerce

• Commerce from companies to consumers.
• Customers collect information, purchase goods (tangible like books) or Information goods (software, eBooks) and receiving products over electronic networks.
• The earliest form of e-commerce that is traced to online retail for business
• Business models are online retailing such as Amazon, Drugstore, Barnes&Noble and examples of info goods are E-Trade, Travelocity.
• Most applications in Purchasing, Personal Finance management with online tools etc.

B2C E-commerce Projections

• Estimates from eMarketer predict the increase of B2C e-commerce revenues to reach from $59.7 billion to $428.1 billion (an increase $368.4B) by 2004
• Online retail transactions make up a significant % of the online market
• Asia Pacific revenues registering modest figures increase to $8.2B by 2001 and doubling figures of 2002 under 10% of global sales
• Reduces transaction Cost by price comparisons and barriers reduced by cost of maintaining a web site instead of installation for brick and mortar firms

B2G type or e-commerce (business to government)

• Uses the internet with public sector
• Public procurement, licensing procedures and ops
• First, public sector assumes pilot role and second, largest need is procurement system

C2C or Consumer to Consumer type ecommerce (between private individuals / customers)

• Characterized by increasing electronic markets + online auctions in vertical indutries/firms/businesses
• Includes auctions like eBAy, peer to peer systems for file sharing (Napster Model) file exchanging and directory classified ads like the interactive EXcite or EWanted.

M-commerce (mobile commerce)

• Buying/selling of products/services with wireless technology and Handheld devices (cellulars and PDA), in Japan
• Fastest growing methods with choice for digital commerce- will surpass wireline commerce in Asia Pacific region (More mobile owners online than personal computers)
• Industries affected, Financial or mobile banking- brokerage services (stock trading, sports traffic all delivered thru devices).

Forces fueling E-commerce

• Economic Forces One of the benefits of e-commerce are economic efficiency resulting from costs Reduction in communications
• Lower cost tech infrastructure + transaction and sharing advertising costs
• Integration either eternal or intternal and connecting suppliers, customers, clients into one common medium known as the internet Mass Customization and Network Production

Mass Customization

• Car manufacturing e-commerce company with online orders to design a custom vehicle within days

How E-Commerce helps Consumer

• By creating influence through the manufacturing and choices that consumer can control and processes in C2B transitions

Business and E-Commerce relationships

• The creation of Vertical linear relationships towards end to end relationships and integrated into new relationship models.

How E-Commerce Links the players

• Facilitates organizations networks which improves supply chain and improves effectiveness.
• Product flow, Information flow with credit terms.
• Some can allow data inside or outside of a company thru external methods and allowing improvements for market and costs.

Characteristics of an E-Business Model

A must have: - A shared digital framework/infrastructure that will give way for participants to create and allow network scales/scopes - A model for chains/operations with supplies - Management model for partnerships or business teams - Regulatory and social systems to protect ecommerce and incentivize

E-Commerce applications (issues or prospects)

• Various types such as E-Banking, E-Tailing, and Online Publishing

Buying and Paying Online

Existing practices in developing countries include - A traditional payment method such as cash / bank payment methods

• E-Payment includes online or encrypted credit card etc for banking or online consumers

Banking and E-commerce methods used:

Consumer, banks, direct deposits that banks allow with clearing houses etc

What is E-Payments system?

System for exchanging electronic funding between buyer/ seller, via digital financial system Eps is big since developing nations lacks this in that, they rely on cash systems Underdeveloped countries must fix Legal infrastructure and agreements, etc for security Little to no consumers can buy due to small market Explicit agreement or the presence of the customers for verification

What is confidence level of the EPPS

Cash payment of the method is the preferred, not only account of security but also anonymity (used for non payment or non disclosure and etc). Security lacks also, due to framework for ruling fraud and legal limits for credit cards EPs requirements (Protection safety for keeping records) and legal framework needed to help scheme for nations

E-Banking or electronic banking:

Electronic or mature based products in the markets for consumers. Electronic bill payments and stored value cards etc China uses Credit card but most is with cash/delivery, however emerging for banking and cyber activity

Status of Banking for developing countries

Early stages

• Broad review for these banks
• Phillipines uses large bank systems to pioneer ATM and network banking
• Singapore offers lots of online bank sites with broad range of proprietary products
• Malaysia bank offers the most banking services for consumers, however, 30-40,s did admit personal contact helps Access to high products is a concern

Trends

• Increase for banking
• User of bank
  • Leads are 38% Rejectors
• Aversive to internet

E-Tailing

Electronic retailing on internet Trends for increasing growth by Jupiter company, increase web based materials as a result and store based profitability will vary And Retail Forward states, multi channel exists.

Online publishing

Process to do all combined with software to print text etc (Brochure Books magazines

Advantages include

• Low costs and time/ resources and outreach- this also enhances information Problems and challenges can include managing and public policies

Telecoms pricing

• Aims to give fair access for telecommunications Telecom service qualities
• Open Access, flexible access to interconnect /inter operable with digital bandwidth