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Global Trends


· Entering the new global marketplace

· Removing language barriers

· Creating the right site for the audience

· Distributing products worldwide

· Offering a 24 x 7 operation

       A community’s traditional market is determined by the number of consumers that can be reached effectively and efficiently in order to sell goods and services. Today’s market goes beyond your hometown, city, and state. It has extended worldwide from the United States to Canada to Central and South America to Europe to Asia to Africa and everywhere in between. Global electronic commerce eliminates the geographic boundaries that restrain your trade, allowing even the smallest company to reach around the globe. E-commerce levels the playing field for both small and large businesses. It allows diverse businesses, small or large, urban or rural, well capitalized or on a small budget, to compete on the same-sized screen.

       The world has not witnessed such a dramatic chance in business since the Industrial Revolution. During that period of opportunity, companies that embraced the new methods of doing business rose to new heights. History repeats itself. If you had been involved with Henry Ford when he used the assembly line to build new cars, where would you be today? Think of e-commerce as that same moment in time. Those companies willing to embrace this technology and make the commitment will reap the benefits.

       This topic focuses on areas that prove critical for employing e-commerce for a global market. Specifically, the sections define the elements of global e-commerce, offer some considerations, and answer a variety of questions.

Localization: What are the trends of e-commerce sales in different countries? Will you need to provide localization for some countries?

Languages: Who are your current customers and how can you expand your markets to other countries? Do you need to have a multilingual site? What are the costs versus the advantages of providing multilingual site?

Demographics: Who is buying your services and products? You may think it is the technically-savvy Internet users. Think again. Based on the statistics and trends, your market ranges from the young to the elderly, as well as male and female, across many cultures. So make sure your site supports you target audience.

Fulfillment and Distribution: How do you efficiently package and distribute these goods through the United States and throughout the global market place? Have you established and tested distribution channels?

24-Hour Access: Do you allow customers to purchase products and services 24 hour per day? If the marketplace is global, your e-commerce solution must be global.

The E-Commerce Global Market

The e-commerce marketplace primarily focuses on selling goods and services to people and companies located in the United States. As a country, the United States still represents the top market. However, the numbers are sifting. American markets are still moving upwards; however, other countries are recognizing the opportunities and jumping on board. They participate not only on the buying and as consumers, but also in the business-to-business and business-to-consumers markets.

       Moving to the Internet to sell products and services requires selling globally. You can now run a 24 x 7 (24 hours by 7 days) business. Anyone with online access represents a potential customer. Often, consumers in other countries realize substantial savings when purchasing abroad. This opportunity has led to an enormous shift in buying power. It is important to consider several issues when addressing the global market. Market expansion and additional sales are part of this new sales model. However, they are not the only pieces of the puzzle. In order to increase the number of buyers from other countries, you must prepare for the shift.

Global Statistics

Consider the statistics that represent your current and future markets on the Internet. Begin with a look at current and future growth trends by geographic region in the United States and other countries worldwide.

       An analysis from International Data Corp. estimates that in 1999, foreign firms will outpace the United States in e-commerce sales. The forecast shows that in 1999, United States spending will total $174 billion, while foreign firms will reach $305 billion. In addition, by 2003, companies will spend a total of $2.2 trillion, approximately $600 billion in the United States and $1.6 trillion by foreign companies. These figures reinforce the importance of the concept of a global marketplace.

       The number of Internet users around the world is constantly growing. The Computer Industry Almanac (www.c-i-a.com) has reported that by the year 2000, 327 million people around the world will have Internet access. The top 15 countries will account for nearly 82% of these worldwide Internet users (including business, educational, and home Internet users). By the year 2000 there will be 25 countries where over 10% of the population will be Internet users.

       With these types of trends, you will need to think about your business and how it addresses the world markets. Again the idea is to move ahead of your competitors and to increase your market share. By globalization your site, you have the opportunity to capture even more markets. Address the following considerations when designing your e-commerce site:

• What languages will you need to include in your site?

• Will you need to customize your site for each country?

• How do your products and services fit within the global economy?

• Will you need to provide different products and advertising for different countries?

• How will your business support the expansion to a global economy?

• Have you considered distribution channels, 24-hour access, import and export laws, taxes, and currencies?  

       If you choose not to translate or localize your site, but still want customers from countries outside of the United States, at least promote your site through advertisements, newsgroups, and cross-links. In most European countries for example, English is understood by a large percentage of the population. A report by Computer Industry Almanac estimates the following figures for the number of users online at the end of 1998. Only the top five countries are included in Table 3.1.

Table 1. Number of Internet Users

Country

Number of Internet Users

United States

88-92

Japan

13-14

UK

9.2-10.5

Germany

9.0-12

Canada

7.5-8.5

* All figure represent millions and are based on 1998 projections.

Globalization

Take a look at some other current trends from the top countries online and the anticipated trends for the next few years. The reason they are important is that in business-to-consumer markets you need to compare the costs versus the benefits of localizing a site or providing additional language options. On the other hands, for business-to-business systems, you need to consider who are your trading partners. This consideration determines whether you should localize or provide additional languages on the site.

       IDC Research has reported that Internet use in china is expected to surge to 9.4 million users by 2002, up from 1.4 million in 1997. China’s Xinhua news agency announced in January of 1999 that there were 1.5 million Internet users in China at the end of 1998. More than 84 percent of these users were under the age of 3550 in Beijing, according to Xinhua. The Computer Industry Almanac notes that there were 1.58 million Chinese online at the end 1998.

       NOP Research estimates that 2.9 million French use the Internet (6 percent of the population). The Computer Industry Almanac estimates there were 2.58 million French online at the end of 1998. A Mediangles survey of 6,850 French citizens over age 15 conducted in May of 1998 led to an estimate of 2.5 million French citizens online. Whichever numbers is more accurate, one things is for certain: when the 35 million French citizens who use Minitel are given Internet access ( a plan in the works with the help of IBM ) the actual number of French online will surge.

       The German consulting firm GFK estimates that there are now approximately 8.4 million Germans with Internet access. More than half of these users are between the ages of 20 and 39.

       According to a report by Osservatorio Internet Italia in December of 1998, 2.6 million Italians claim to have used the Internet in the previous month. In mid-1997 the number was estimated to be 1.5 million. Of the 2.6 million, 130,000 have purchased goods online, and 770,000 are daily users of the Internet. To compare, the Net user/Net buyer ratio in Italy is 20:1; in the United States it is 3:1. The Computer Industry Almanac estimates that there were 2.14 million Italians online at the end 1998.

       Nikkei Market Access reported in October 1998 that there are 11.5 million people accessing the Internet in Japan. The Computer Industry Almanac estimates there were 9.75 million Japanese Internet users online at the end of 1998. DSA Group (www.dsasiagroup.com) reports the number is 14 million, with a forecast for 27 million set by Access Media. One thing is certain, the number of women on the Internet in Japan is growing. Studies by Nikkei Multimedia and DSA Group both report that 40 percent of the new Internet users in Japan are women.

       Almost 2.25 million Spaniards (6.6 percent of the population) have Internet access, according to a study by the Spanish Internet Users Association (AUI). It predicts that the number will rise to 8.74 million by 2001. The Computer Industry Almanac estimated the Spanish online population to be 1.98 million at the end of 1998. Clearly these trends are headed in the right direction for any company considering a global presence.

Continue to Part 2

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