A New Era for E-Commerce – The Power of Information, The Promise of Connection.

Ravi S SharmaSchool of Communication and Information

rsharma@pmail.ntu.edu.sg

NanyangNanyangTechnological University

Executive Summary

Electronic commerce is a phenomenon that is dramatically changing the way in which people live, learn, and communicate with one another. How people will benefit from e-commerce and how policy issues can affect the growth of e-commerce and the costs as well as the benefits that are associated with electronic commerce is the subject of this talk.

E-Commerce Re-visited

Access to distributed, secure, multimedia content and secure transactions

Mobility of users, ubiquity of devices and applications Pervasive platform and services There is a strong link between telecoms infrastructure,

internet use, electronic financial instruments and e-commerce E-commerce = transacting over public info-comms networks;

ranges from browsing web catalogs, to e-mail / ICQ enquiries, secure ordering and payment clearance, to supply chain management and after sales support.

Connectivity is the ability to securely transmit information between electronic devices at different locations.

E-COMMERCE SNAPSHOTS

In 1997, e-business grew from an IBM advertising campaign to a catchy metophor that expressed a way of doing business.

Amazon.com is now profitable, selling 2.5 million (10 x its nearest bricks-and-motar competitor!) products to its 100 million (?) customers at the fraction of industry norms for time/cost.

Dell, Toyota, eBay, Cisco are other success stories, as are SQ, DBS and CabLink.

And some not-so-successful ones … Levi’s e-tailing (1998) and Hershey’s Halloween rollout (1999) … eToys (2000)

Clorox estimates that the cost of ordering from its suppliers has dropped from $100 to $15 through supply chain management.

E-COMMERCE BUSINESS MODELS

MODEL FUNCTION EXAMPLESE-retailer Use the Internet to sell

directly to customersAmazon.com, expedia.com

Clicks & Bricks Use both the Internet and physical stores to sell to customers

Barnes & Noble

Mustafa’s

Financial Services Provide services such as payment clearance and brokerage

Visa, MasterCard, AmEx

E-auction Run auctions to secure highest bidder

eBay, Freemarkets

E-marketplace Provide information and commercial transactions for specific industry verticals

Ariba, Commerce One, TradeNet, LawNet

Content Aggregator Serve as a portal for many types of information and users

Yahoo, Lycos

Content Provider Provide online content Rediff.com, china.com

Managed Hosting Services

Provide outsourced services for e-commerce

IBM, HP, EDS

TELECOMS TRENDS

The growth of the mobile Internet is a precursor to “anytime, anyplace” access to information, communication and transaction…

… resulting in a basket of multimedia telematics applications over a converged platform.

Emerging Applications and Services

Multimedia content: including graphics, video clips, music, locator services, games and directories formatted especially for mobile handsets.

Multimedia Messaging: Any combination of photos, video clips, audio clips, graphics or text can be sent to another mobile handset, PC or other device. "Mobile broadcasting“ of media (such as news) to many terminals simultaneously is similar to cell broadcasting for SMS.

Internet/Extranet Access: Mobile access to e-mail, rich web content, corporate network resources etc.

Instant Messaging: "real-time" text-based messaging via the Internet. Location Based Services: LBS could allow subscribers to locate the

nearest restaurant, fuel station or shop of their choice. Rich Voice: Two-way real-time enhanced voice, video and other forms of

data. Presence – enabling a caller to see if a contact is available or "on-line" to receive calls or messages – will promote even greater usage of voice telephony. .. Eg. "Push-to-Talk“ over Cellular, ICQ, MSN, IVR solutions.

BACKED BY A SOLID BUSINESS MODEL?

Challenges to Pervasive E-Commerce

Availability of affordable end-systems Open architectures and access Revenue sharing business models Move away from point-to-point communications to

user communities (eg. e-government, schools-on-the-net, tele-medicine and EPR, …)

The Media-Market Lag

Lessons from the ITU on why this is so …

It takes longer than you think The media and the market follow different cycles Convergence cannibalizes existing cash cows First movers often get burnt fingers Standards and technologies are key in promoting

convergence and inter-operability

THE DIGITAL DIVIDE IN ASIA

"The term "digital divide" refers to the gap between individuals, households, businesses and geographic areas at different socio-economic levels with regard to their opportunities to access information and communication technologies (ICTs) and their use of the Internet. It reflects differences among and within countries, and raises a number of questions. Where does it occur and why? What are its causes? How can it be measured? What are the relevant parameters? How wide is it? Where is it most critical? What are its effects likely to be in the short term? In the longer term? What needs to be done to alleviate it? These questions have only recently been raised, and it is not possible, as yet, to answer all of them with any certainty."

[OECD, Understanding the Digital Divide, Report]

Top 15 Markets for Broadband Penetration

Broadband subscribers Broadband households

Economy Total 000s

Change 2001-02

Per 100 inhabitants

% of all subscribers

% of those with

Internet % of all

1 Korea (Rep.) 10'128 24% 21.3 94% 83% 43%

2 Hongkong, China

989 38% 14.6 42% 68% 36%

3 Canada 3'600 27% 11.5 50% ~ 41% 20% ~

4 Taiwan, China 2'100 86% 9.4 28% 59% 31%

5 Iceland 25 138% 8.6 21% ~ 12% 9% ~

6 Denmark 462 107% 8.6 19% 24% 16%

7 Belgium 869 90% 8.4 51% 41% 17%

8 Sweden 693 48% 7.7 23% 20% 13%

9 Austria 540 123% 6.6 22% ~ 28% 14%

10 Netherlands 1'060 127% 6.5 10% ~ 29% 19%

11 United States 18'700 46% 6.5 18% ~ 19% 10% ~

12 Switzerland 455 308% 6.3 5% ~ 9% 4%

13 Japan 7'806 176% 6.1 27% 18% 5% ~

14 Singapore 230 73% 5.5 26% 35% 20%

15 Finland 274 426% 5.3 5% ~ 15% 8%

Source: ITU World Telecommunication Indicators Database

The Digital Divide in APAC … i

Internet Hosts / 10K

Users / 10K PCs / 100

China 1.28 632.48 2.76

India 0.82 174.86 0.72

Indonesia 2.88 377.16 1.19

Japan 1016.47 4488.56 38.22

Korea 52.30 6034.20 55.14

HK SAR 864.49 4691.66 42.20

APAC 50.34 674.25 4.45

Source: ITU World Telecommunication Indicators Database, 2003

The Digital Divide in APAC … ii

infrastructure usage market

China 14.95 (63) 36.79 (61) 61.11 (66)

India 0.72 (160) 45.30 (15) 76.26 (45)

Indonesia 12.39 (70) 39.38 (40) 55.56 (82)

Japan 58.42 (7) 24.93 (148) 78.00 (44)

Korea 65.12 (8) 33.77 (91) 89.68 (14)

HK SAR 58.42 (8) 50.58 (4) 96.10 (3)

APAC 13.10 33.92 48.59

Source: ITU World Telecommunication Indicators Database, 2001

Best Practices for Development

The telecoms market is liberalized (reflected by an increased share private providers).

Telecoms charges fall (e.g., cost per minute, connection charges) when volumes increase.

With USO, coverage expands (number of main lines in operation), especially in rural areas.

The emergence of open delivery platforms allow a host of content and transaction service providers to access a critical mass of subscribers / customers.

Value-added taxation and revenue settlement mechanisms encourage the move up the value chain.

Is the gap being bridged … ?

Source: ITU Internet Reports, 2002

LAST WORD

Moving towards the information society is in the interest of government, industry and the public

Information and communication (in general) are not niche applications; neither is e-commerce

The digital divide must be bridged in order to create a mass market, high volume business (the Grameen Bank is an outstanding case in point for micro-payment services)

Connectivity, security, content and business models are the key infrastructure challenges

Some Really Useful References

Internet for a Mobile Generation, ITU Internet Reports, September 2002.

ITU World Telecommunication Indicators Database http://www.itu.int/ITU-D/ict/statistics/

Asia Pacific Networking Group (APNG)Asia Pacific Networking Group (APNG) is an Internet organization dedicated to the advancement of networking infrastructure in this region, and to the research and development of all associated enabling technologies. Its mission is to promote the Internet and the coordination of network inter-connectivity in the Asia Pacific Region.http://www.apng.org(Added: Tue Feb 26 2002 Hits: 67)

NATIONAL INFORMATION INFRASTRUCTURE IN SOUTH-EAST ASIA - 1997. (EDU)This report examines the information infrastructure programs in twelve Asia Pacific nations, and discusses APEC's recent initiative to establish an APII - an Asia Pacific Information Infrastructure.http://www.vacets.org/vtic97/txbui.htm(Added: Thu May 10 2001 Hits: 127)

Asia - Pacific Developement Information Programme (APDIP). (INT)APDIP seeks to promote and establish information technology (IT) for social and economic development throughout Asia-Pacific. Launched in 1997 and based in Kuala Lumpur, the Programme serves 42 countries in a vast region, from Iran in the west, north to Mongolia and south to the Pacific Islands of Fiji.

http://www.apdip.net/(Added: Tue Apr 03 2001 Hits: 122)

BRIEF BIOGRAPHY

Ravi Sharma is presently an Adjunct Associate Professor at the School of Communication and Information of the Nanyang Technological University in Singapore. His teaching, consulting and research interests are in telecommunications best practices and strategies. As consulting engagements, he serves as telco industry advisor to Frost & Sullivan’s technology practice in the Asia Pacific, Vice-President of the Homeportal Inc. presence in Asia, and business advisor to startups such as Nexlabs, webflo, Comwerks and AIT Academy. Prior to this, Ravi was the Asean Communications Industry Principal at IBM Global Services and before that, Director of the Multimedia Competency Centre of Deutsche Telekom Asia. He has worked in the area of advanced communications technologies for over 15 years and his work has appeared in leading journals, conferences, trade publications and the broadcast media. Ravi received his PhD in engineering from the University of Waterloo and is a Chartered Engineer (UK) and a Senior Member of the IEEE. He serves as an associate editor of the IEEE Communications Surveys and sits on various technical and professional boards.