ECommerce Research Paper 1 Sizing the Essay

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1 Sizing the E-commerce market

IDC forecasts that the Western European market for Internet E-commerce will

rise from ECU 900 million in 1997 to ECU 26 billion in 2001 - ECommerce Research Paper 1 Sizing the Essay introduction. At the same clip,

the figure of devices accessing the Web will turn from 14.2 million by the terminal

of 1997 to about 58 million by the terminal of 2001. NUA Internet estimates that, in

1998, the European Internet population is 22 % of the global population.

Other surveies are corroborating a immense growing in Internet entree and E-commerce

applications, which began around 1996 and will go on, at a meteorologic rate until

merely beyond the bend of the millenium. A study of European administrations carried

out for EITO ( European IT and Telecommunications Organisation ) shows that

82 % of those connected to the Internet set up their connexion between

1996-1998, while at the terminal of 1998, 29 % of European concerns will be utilizing

Internet based E-commerce applications & # 8211 ; up from merely 6 % in 1996? and, by the

terminal of 1999, merely under a half ( 47 % ) of such concerns will be utilizing Internet

based E-commerce applications.

The EC-financed CONDRINET survey carried out by CAP Gemini predicts that

within five old ages, more than 80 million Europeans will go regular web

users ( where? web? refers to synergistic digital webs built upon unfastened

criterions, eg the Internet, some online services, and some synergistic telecasting

systems ) . It farther suggests that 500 billion Euro in one-year gross revenues will either be

straight transacted across, or facilitated by, such webs. On a planetary degree,

Forrester Research forecasts that 82 % of big companies will merchandise online by

2002.

2 Types of E-commerce

The E-commerce market is conventionally divided into business-to-business

and business-to-consumer E-commerce. In future, these classs will

go progressively bleary. Longer term, the differentiation may good be between

customer-facing and supplier-facing E-commerce, where a client may be a

concern client or consumer. The E-commerce applications? selling,

gross revenues and post-sales? needed to function both types of client are the same.

Supplier-facing applications, such as procurance ( buying ) , will merely use

in the business-to-business section, where public organic structures are besides included as

? concerns? .

Datamonitor predicts that Western European spend on business-to-business

E-commerce solutions will turn to $ 11bn by 2001, from $ 380m in 1997,

bespeaking how rapidly this market section will turn. Business-to-business

E-commerce focal points on supply concatenation and procurance issues. Large

companies, in peculiar, have streamlined their ain internal procedures through

the usage of engineering and concern procedure re-engineering and are looking to

pull stringsing the supply concatenation for farther additions in profitableness.

Datamonitor notes that disbursement on services ( consultancy, systems integrating )

will turn most quickly, sing a 92 % compound one-year growing rate over

the period 1997? 2002, compared to 66 % for hardware and 85 % for package.

This suggests that companies whose first experience of E-commerce was to

set up a Web presence will be revisiting their E-commerce scheme over the

following two to three old ages, working out a concern instance, re-engineering procedures

onto the Web and incorporating E-commerce applications with bequest systems, all

of which typically require the services of external bureaus.

KPMG? s 1998 Research Report on E-commerce supports anecdotal grounds

from other European IT consultancies that companies are get downing to gain

the importance of scheme, concern instance and? 2nd coevals? Internet

applications: that is transactional applications, instead than first coevals

marketing presence on the Web. These findings typically refer to big

companies instead than SMEs. KPMG surveyed big companies ( with one-year

turnover above 150 million ECUs ; the bulk with turnovers above 300 million

ECUs ) and found illustrations of companies bring forthing at least 1 % of their sum

turnover from electronic commercialism. Around 10 % of the overall sample are besides

bring forthing E-commerce gross productively. KPMG identified cardinal features

of this? leader? group: they were more likely: to hold board degree support for

E-commerce activities ; to hold integrated E-commerce into their supply concatenation ;

and to be reasoning Internet minutess. They besides had higher Internet

marketing budgets than the remainder of the sample, and had more positive attitudes

to the benefits and necessity of the Internet. As we shall see, such

features are besides common to outdo pattern SMEs.

Scotland & # 8217 ; Craft Brewers Cooperative is the gross revenues and selling arm of the

Cream of Craft Brewers in Scotland, that is, those who brew beer in traditional

manner, utilizing no additives or preservatives and malt that is free of GMOs

( Genetically Modified Organisms ) . Of the 22 SME beer makers in Scotland, six and a

bottling works make up the Cooperative, the purpose of which is to advance its

members & # 8217 ; merchandise under the Scotland & # 8217 ; s Craft Brewers Cooperative trade name name,

to the big UK supermarkets. Individual beer makers did non hold the capacity to sell

into these on their ain. In order to make a larger market and to export beyond

the UK, the Cooperative has developed a web site, which is already interrupting

new land that would be hard to make through conventional selling agencies.

for illustration, SCB-Cooperative merchandises are being sampled by the Canadian

Liquor Board. Merchandise can be ordered via the site and paid for by recognition card

utilizing the Netbanx clearance system. The beers bear a generic label which can

be customised by the buyer to reflect an image, name, or both

. The image

and words are digitally transmitted to the Cooperative and the customisation

service applies to orders every bit little as three bottles. Delivery is anyplace in the

universe, coordinated by ParcelForce, and clients are able to utilize

ParcelForce & # 8217 ; s Internet-based trailing service to look into the position of their

bringing. As a really little concern, SCBC did non believe it had the accomplishments or support

to run a concern on the web. However, by utilizing the IBM HomePage Creator

service, it was able to travel live within a twosome of yearss at really low cost. Because

the service simplifies set-up, SCBC was able to concentrate on its concern without

worrying about the engineering. As a consequence of its turning success on the web,

the Cooperative is forecast to make 75 new occupations within a twelvemonth and to construct a

trade name name equaling better-known traditional beer makers on a universe graduated table. The

Cooperative will go on to develop its trade name and the market for its merchandise. It

expects other beer makers to fall in the Cooperative, in order to vie in a universe

market.

( www.lugton.co.uk )

Datamonitor has besides produced prognosiss for the business-to-consumer market:

it predicts that entire grosss from on-line shopping at European sites will turn

from 111m ECUs in 1997 to about 5 billion ECUs in 2002. It predicts that travel

merchandises will see greatest growing, from 7 % to 35 % of the entire online

merchandise mix over the period 1997-2002: nevertheless, this determination is at discrepancy with

the EITO study, which found travel one of the slowest sectors to take

advantage of Internet E-commerce. Insurance will besides turn, harmonizing to

Datamonitor, from less than 1 % in 1997 to 9 % in 2002. All other merchandise

classs will see falling portions of the overall merchandise mix.

The business-to-consumer market is widely expected to take off when the

Internet can be accessed by big Numberss of low-cost and omnipresent devices,

such as nomadic phones and digital telecastings. This means that despite the

Numberss of users online, companies in this sector will hold to vie for

comparatively little Numberss of clients over the following three old ages. However, they

will derive valuable experience, and potentially trade name acknowledgment and market

portion, that will assist them to capitalize on the growing in on-line Numberss one time

entree through devices other than Personal computers becomes widespread.

3 E-commerce applications

The tendency is really much toward important growing in transactional E-commerce

applications over the following five old ages, and peculiarly those that are

customer-facing, such as gross revenues and post-sales ( client support, client

monitoring and feedback, electronic delivery/delivery presentment applications ) .

Harmonizing to the EITO study, an norm of 46 % of companies across

European states have web sites for selling intents, while the norms

for those that presently support different types of transactional applications are

much lower. Supplier-facing applications have the lowest incursion, likely

because providers tend to be smaller companies, with less engineering expertness

and E-commerce consciousness, and are hence extremely immune to making

concern electronically with their clients.

Work force @ work: the purpose was to make the multi-media information system and

tele-service work forces @ work, an of import practical market place for people in the office.

The system is a made-to-measured and comprehensive electronic concern

solution for the presentation, selling and distribution of merchandises and services

related to the office. It offers everything from office equipment, accoutrements, art

and design to the proficient equipment of a teleworker. The market place

represents a forum for industry, trade and services in Europe. The vision of the

proprietor of the confer withing company OfficeMedia Consult ( Altdorf, near to

N? rnberg ) is to go a major supplier for E-commerce of merchandises and

services for the office in the Internet. The know-how and the engineering which is

required for an electronic market place is provided by a individual entity. The purpose of

the concern solution is it to roll up the competency of single companies and

to make a mark group orientated information forum that leaves adequate room

for the presentation of the single companies. Each provider can quickly

benefit from a low cost distribution channel combined with improved client

relationship. The offer to the companies comprises logistics, hotline with

Internet call centre, offer and informations update every bit good as Forum and rank

attention of the market place work forces @ work.

( www.men-at-work.net )

Deloitte Consulting has concluded, from its one-year study of around 500 Head

Information Executives of big companies worldwide, that this state of affairs will really

shortly alteration. It suggests that customer-facing transactional applications will

base on balls the critical 50 % grade within two old ages, increasing their incursion by

about 38 % overall ( 29 % in Western Europe ) ; while supply concatenation applications

( procurance ) will increase their incursion by about 45 % ( 42 % in Western

Europe ) in the same period, to embrace 70 % of the big concerns

surveyed.

The EITO study is more expressed, and besides less sanguine, perchance because it

surveyed a scope of companies of different sizes. EITO predicts that while

selling applications will make critical mass across all sectors by 2000-2001,

gross revenues applications will make this point faster ( by 2000 ) in

business-to-business-oriented market sectors, such as public-service corporations, fabrication

and concern services, though post-sales will dawdle somewhat, in a 2001-2002 clip

frame. Procurement applications will make critical mass unevenly across

European states and sectors, from 2000 through 2002

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