World Telecommunication Day 1999 |
By the year 2002, Internet shopping is expected to generate at least $1 trillion in sales, with some estimates as high as $3 trillion. A range of products and services has already proven Web-friendly: banking, travel services, software and music, not to mention computer hardware, books, clothes, flowers, pizza and even Tupperware.
''We are committed to defining the direct-selling industry in the 21st century to the same degree that we helped define it in the 20th century,'' says Betty Palm, president of Tupperware U.S. According to Susan Hight, manager of Internet programs for Tupperware, the site's customized features include a recipe exchange, e-mail capabilities, family-fun tips and the ability to create customized Tupperware party invitations on-line for hard copy or e-mail.
In the fiercely competitive (and as yet seldom profitable) arena of Internet shopping malls, all kinds of promotions and deals are currently on offer. For instance, OSCM-One Stop.Com Inc offers members in many countries a free personal computer if they agree to spend at least $30 per month for two years at any of the stores in its mall.
The deluge of e-commerce sites is a direct reflection of predictions that on-line shoppers have the potential to spend much more than they do now. A recent survey by Quicken, a U.S.-based personal finance software company, shows that the average American parent currently spends $192 on back-to-school shopping, while on-line shoppers spend $203 on school supplies. On-line shoppers comprised only 2.3 percent of the total, which means the potential for growth is enormous.
Another interesting trend is that older people, more than any other age group, are rushing to fill their electronic shopping carts. A study by Greenfield Online research showed that 92 percent of on-line seniors have window-shopped on the Web, while 78 percent have made a purchase - figures significantly higher than for the total Internet-user population.
Accessing e-commerce sites should soon become even easier. Services are now being tested in Germany, Finland and France that allow mobile-phone customers to order cinema tickets, pay bills and get limited Internet access through a microbrowser on their handset. Mobile multimedia (MMM) handsets are already being produced by companies such as Nokia, Alcatel and Siemens. Mobile accessing of the Internet is set to expand even further.
Says Arthur Levin, legal officer of the International Telecommunication Union in Geneva: ''The next generation of cell phones, commonly referred to as 3G, will put a phone, a computer, the Internet and a credit card in the palm of the consumer. The development and adoption of a common standard would mean that 3G phones could be used anywhere in the world.''
E-commerce is also changing the way products are sold, from real estate to the boom in on-line auctions. Even municipal bonds are now being offered on-line to bidders around the world.
Hewlett-Packard and Delphi Information Systems have joined forces to create an all-purpose Internet portal for the insurance industry, often regarded as one of the most Internet-resistant businesses. HP says that unlike existing insurance Web sites, this portal will allow customers to compare rates, obtain extensive information and complete transactions on-line, without a telephone call or signing any paperwork.
The rise in financial transactions over the Web is fueling developments in banking services, electronic cash, smart cards and software that help money flow smoothly and safely over the Net. Together with their financial results this year, many of Britain's largest banks announced huge Internet and digital television projects. Abbey National is planning to spend £100 million ($161 million) and National Westminster an additional £32 million on Internet projects, while Barclays Bank is teaming up with HSBC and Abbey National in a digital TV project.
These moves are a response to an onslaught of low-cost, on-line competition from the likes of newcomers First-e and Egg, the banking arm of Prudential. The latter attracted some £6.7 billion into its savings accounts during its first eight months of operation as a result of loss-making interest rates. In fact, Egg is set to lose in excess of £200 million this year as part of its long-term strategy to attract customers.
Internet banks can set up very cheaply. They offer an opportunity to garner more information about customers for cross-selling purposes and decrease the need for telephone banking centers - although most banking executives would agree that branch offices are not in danger of extinction. From the customer point of view, e-banking is an easy way to shop around for the best deals and reduce transaction costs.
On-line brokers are moving into cross-border securities trading. For example, Hong Kong investors can now access the U.S. markets from their desktops. With the recent upgrading of its dealing license with the Securities & Futures Commission, Hong Kong-based Boom Securities offers client trading in more than 6,000 U.S. shares. Celestial Asia Securities Holdings is planning a system in which investors in Hong Kong, Taiwan and mainland China can trade stocks in their respective markets through a single on-line platform.
Governments are increasingly concerned about the implications of Internet transactions on tax revenues. For example, British bookmakers are moving to offshore tax havens as they exploit increasingly popular telephone and Internet wagering. This lets them skirt the government's 9 percent betting levy, which generates some 50 million pounds annually for the British Treasury.
Julia Clerk