PLANNING FOR THE NEXT MILLENIUM

E-tailing Is Here

Companies that do not want to participate in Internet commerce may be forced to do so by competitors or customers.

It is important to find out ways for taking advantage of the Internet opportunity. The growing importance of e-commerce has been rightly said in Harward Business Review of March 1998, "The companies that do not want to participate in Internet commerce may be forced to do so by competitors or customers." In 1999 about 100 million shoppers are expected to spend as much as $15 billion over internet. According to IDC forecasts, Internet commerce is expected to be worth $220 billion by the year 2000. Forrester sees the business close to $327 billion by the year 2002, just under one percent of the global economy. However, such estimates can vary as much as up to a trillion dollars.

India’s E-bazaars

There are many Indians regularly shopping their fruits, vegetables—even speciality items like asparagus, baby corn, mushrooms, and grapefruits—and other groceries from e-bazaars like bababazaar.com; also to be watched is indiangrocer.com. The offering includes special recipe packs too. Bababazaar home delivers the stuff within a few hours (if ordered before 9 a.m.), against cash or cheque and a delivery charge of Rs 15 only, by special radio vans. The users seem to be quite happy with the service. Among other items one can shop are books, music, ready-mades, etc., from web sites like rediff.com, benzerworld.com, and colorplusonline.com.

Small Is Beautiful

In order to familiarize netizens and build up volumes quickly, there is a need to develop the new creed of e-tailers—the small businesses or retailers—who would like to do their business online like bababazaar. They need a set of simple services to popularize e-commerce and build user confidence in the system at least till the evolution of cyber laws, secure online payment methods, etc. The companies that have taken advantage of this opportunity are starts-ups like Yahoo! and Amazon.com.

The Yahoo! Way

Yahoo! is committed to providing its users with convenient access to the Web’s most valuable resources. Having recognized the need to address the demands of growing number of small businesses and merchants, who want to use the Net as a channel to reach new customers, Yahoo! has launched several services—Yahoo!Store, Yahoo!Small Business, Yahoo!Business Express, Yahoo!Site, and Yahoo!Connected Office—targeted at small businesses and merchants. At Yahoo!Store, the US e-tailers can create a virtual store within 48 hours for $100 per month or more, depending on the inventory size. Yahoo! has also recently tied up with Banc One Payment Services and First Data Merchant Services to provide Yahoo!Store merchants with Internet credit card payment capabilities.

Yahoo! has also got together with a local merchant providing money-saving coupons and launched Yahoo!Coupons. Yahoo! users will enjoy discounts and other bargains for services ranging from dry cleaning and haircuts to oil changes. Shoppers have to just enter a zip code, select a category, and click "Get My Coupons!" to display coupons matching their preferences or just search by a brand or retailer in a given area. By printing their selected coupons, users can buy them at participating establishments.

Mobile E-commerce

Key Constraints

The key constraints for e-commerce are put as:

Lack of user confidence in security of payment Lack of cyber laws Poor penetration of credit cards in india Inadequate volumes Bandwidth availability for logon without jams.

Net Laws
Internet has brought forward the contradictions between the established conventions and the fruits of freedom. It poses several challenges as how to bring credibility to the electronic transactions without destroying this free and democratic way of life. Without resorting to severe punishments like in China and Singapore.
To begin with, digital signatures need to be legalized to lay the foundation for e-commerce. To be able to pay by credit card, without its misuse and to be able to protect one’s consumer rights. Also the taxation issues need to be simplified. In the arena of international trading, an even wider understanding is required between the governments. Someone said that constraining Internet without an inflexible legal framework is like holding down an octopus with a pair of handcuffs.

Telenor Mobil is launching e-commerce service for mobile users, in co-operation with Filmweb, the content provider. Mobile users would be able to buy cinema tickets using mobile phone as the e-commerce terminal. The charges get billed to a credit card, bank account, or an e-commerce account. The scheme is easily adaptable for other products or services. The cinema ticket service gives the user a menu on the mobile phone display, showing information about movies being shown. The user orders and pays for the tickets, receives a confirmation number for the purchase, and can pick up the tickets on arrival at the showtime. One only needs a GSM mobile that supports the SIM tool-kit feature, a card with extended memory, and security feature. Mobile phone serving as a wallet!

Marketing Alliances

Another way for companies to exploit Internet fast is to find ways to embed their products or services in customer magnets. For instance, when someone visits Yahoo’s site for furniture repair, a button pops up asking if the visitor wants a book on the topic—to be actually provided by Amazon. A good complementarity exists for hotels, travel agents, car rental agencies, tour operators, guidebook publishers, etc. to synergize through such alliance.

Export Opportunity

According to IDC predictions, 46 million Americans alone will be buying $16 billion in goods annually by the year 2000 on Internet and $54 billion by 2002. It is implicit that a tremendous opportunity exists for Indian exports. A big constraint for the Indian exporters—especially the small and medium ones—is the cost of marketing. Internet, however, changes the scenario bringing down the cost of reach as well as the transactions within affordable limits. Money is not the key—it is the creativity. Some of the Latin American countries have been promoting their cottage industries developing web sites.

For India, this is an opportunity to build Internet economy, which it can hardly afford to miss. It is important to keep up with the investments and progress being made in other countries—around Internet. NIC is already doing commendable work on trade information.

The complexity and magnitude of e-commerce transactions require quality bandwidth, free of delays. The opening of long distance—as provided in the National Telecom Policy 1999—is expected to make ample bandwidth available to put India on information superhighway. 

By Niraj K.Gupta, Voice and Data, May 1999