The Web is reaching an increasing number of people worldwide. Your Web strategy had better follow suitReader ROI The World Wide Web isn't as universal as its name implies.
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- How companies manage their global Web efforts - Where Web access falls short - Which countries companies should target for online business Nearly five years after the birth of the commercial browser, the World Wide Web is beginning to live up to its name by becoming decidedly more worldwide. More than 200 countries are connected to the Internet. Search the Web and you can find sites ranging from Azerbaijan's president's home page to Zimbabwe's first Internet cafe. But what does that breadth of connectivity mean for a business that wants to use the Web to reach customers, suppliers or distributors? When does a Web strategy need to become a worldwide Web strategy? To answer that question, it helps to put the spread of the Internet into perspective. The International Telecommunications Union (ITU) in Geneva paints this picture: The 6 billion people on this planet are spread out over about a billion households. More than half of those households do not have a telephone, let alone a personal computer. Worldwide, the ITU estimates that 150 million individuals can access the Internet -- just about 2.5 per cent of the population. Michael Dertouzos, director of MIT's Laboratory for Computer Science in Cambridge, Massachusetts., believes that number is smaller, closer to 1.5 per cent of the population. "That [1.5 per cent] is almost entirely in the industrial wealthy nations," says Dertouzos, author of What Will Be: How the New World of Information Will Change Our Lives (Harper, San Francisco, 1997).
Yet even within industrialised nations, the level of Internet access varies widely, due in part to price, PC penetration and infrastructure. For example, in Germany there is no flat rate for local telephone calls. So 20 hours of off-peak Internet access per month costs about $US75 in Germany, with about $US40 for phone charges, according to the Organisation for Economic Cooperation and Development (OECD), an economic and social policy group based in Paris.
Compare that with the United States, where such access costs roughly $US40 per month, with $US20 of that for phone charges. In Denmark, the ITU says, there are about 36 personal computers for every 100 Danes; it is no surprise that Denmark has a higher Internet penetration than Italy, where there are only around 11 personal computers for every 100 Italians. Countries that have more advanced telecommunications infrastructures will also likely have faster and more reliable Internet access. In Greece, according to the ITU, only about half of the network is digitised, compared with 100 per cent digitisation in highly wired Finland. As telecommunications deregulation takes hold in Europe over the next few years, prices should drop and infrastructure should improve, according to Forrester Research (US). And globally by mid-1999, PricewaterhouseCoopers predicts that countries outside North America will be home to more than half the world's Internet users. Even so, companies that have a global presence physically have been slow to roll out a global presence on the Web. Of the 50 companies Forrester interviewed for its "Strategies for Global Sites" report, 62 per cent of respondents said they had no plans to support languages other than English on their Web sites. Among the major issues companies encounter in globalising their sites, organisational problems are experienced by 56 per cent and managing content proves difficult for 25 per cent.
Where to Target
Understanding country-to-country variability can help a business prioritise its efforts. In western Europe, for example, Forrester Research's Don De Palma puts Germany and the United Kingdom at the top of the list of countries to target with a Web effort. Those countries already deliver close to half of western Europe's online revenues. "If you're selling something that is of interest to Germans or northern Europeans, the time to offer that content is now," De Palma says. France, Italy, Spain, Austria and Ireland will take a few more years to heat up, he says. In eastern Europe, Poland, the Czech Republic, Hungary and Slovenia are among the more interesting countries to consider since they have quickly moved to more open economies. In Asia, De Palma says, Hong Kong is an obvious choice because of its fibre-optic-rich telecommunications infrastructure and because it is a mecca for multinational banks, investment houses and other corporate headquarters. Singapore and Malaysia have both courted investment from high-tech companies, while Japan, Korea and Taiwan are part of the global economy. In Australia, the big coastal cities such as Sydney and Melbourne will also be strong centres for Web activity. Meanwhile, in Latin America, Brazil commands attention, says Annika Alford, a research manager for International Data Corp (IDC) Latin America, in Mountain View, California. In spite of Brazil's high cost of local telecom service and the low availability of telephone lines in rural areas, the country is home to half of the region's Internet users -- more than 2 million in 1998, and this number is projected to grow to 3.5 million this year, Alford says. Brazil also has more than 600 Internet service providers, making for a competitive market.
Avis Europe PLC is one company taking advantage of the Web's proliferation as much as it can. The company has developed an extranet, using software from Ottawa-based Simware, to allow licensees in far-flung locales to connect to Wizard, its mainframe-based car rental reservation system, says John Saunders, director of business systems, marketing and sales at Avis Europe. Small licensee offices in countries like Kenya and Russia used to rely on faxes and telexes to communicate with Avis Europe's Bracknell, England-based headquarters because they don't do enough business to merit adding them to the corporate wide area network. Now all the licensees need to do is install a browser on a PC (Avis often sends reps to the field to help them get set up) and arrange for dial-up Internet service from a local provider. Avis Europe has already opened the extranet to licensees in 35 countries across Africa, Asia and Central Europe. As government restrictions around the world disappear, Avis will add more locales to its extranet. At Goodyear Tire & Rubber, the staggered rollout of its global Web strategy is less a question of access and more a question of time and coordination. The company's public Web site already has country-specific, translated information for five countries in Latin America.
It will take until the third quarter of this year for Goodyear to post similar information for Europe. That's not because of lack of interest -- marketing groups from the United Kingdom to Indonesia are clamouring for local content.
"Everybody just woke up," says Pam Bertino, Goodyear's Web site operations manager at company headquarters in Akron, Ohio. But it takes time to make sure that the non-US Web content matches Goodyear's corporate Web standards for look and feel and technology. Germany, for example, put up its own Web site, which later had to be modified to look like the corporate site. To get the other European countries on the same page before they launched their sites, Bertino flew to Frankfurt last year to discuss Goodyear's Web content policies with public relations and marketing reps from several countries. Back on home soil, Bertino talks on the phone with the Web folks in Europe every day. "It is slower to have things coordinated and controlled," she says. But economies of scale make coordination worth the effort. The European countries will cut down on development costs by sharing page templates, and they can host their pages on servers in Akron, a less expensive option than having to pay local host companies. Dell Computer, which now has more than 40 country-specific, fully translated Web stores, pairs its Web priorities with its business priorities.
Its strategy is to roll out new country-specific Web stores when it launches marketing and manufacturing operations in a region. About one-fifth of Web sales now come from outside the United States. That's a bit lower than the amount the company does outside the United States through its other channels, including its own sales force. "The United States had a head start in online business," says Richard Owen, vice president of Dell Online in Round Rock, Texas. "Because of the head start and because of the [differences ] in technology, everyone else is playing catch-up." Look to the Past When will the Internet have-nots catch up to the Internet haves? Ben Pettrazini, a telecom analyst at the ITU, says a look at recent communications history may give some guidance. In 1984 the city of Tokyo had more telephones in it than the entire continent of Africa. Fifteen years later, there are a lot more telephones in Africa than in the city of Tokyo (even though Tokyo still has more phones per capita). But today there are more Internet hosts in New York City than there are in all of Africa. Eventually, Pettrazini predicts, the Internet connectivity gap should narrow somewhat, as has the telephone connectivity gap. "The only problem is, by the time [Internet connectivity] has evened out, something else will come along.
Number of Internet hosts: 786,580
Hosts per capita: 42.7
Personal computers per 100 inhabitants: 36.1Number of Internet users: 2.4 millionCost of 20 hours of off-peak dial-up access: $US40.70 (includes local phone charges)Of note: From August 1997 to August 1998, about 425,000 Australians bought goods or services over the Internet, according to the Australian Bureau of Statistics. Nearly 70 per cent of those goods and services were sourced from outside Australia.
Number of Internet hosts: 23.5 million
Hosts per capita: 88.9
Number of Internet users: 56 million
Personal computers per 100 inhabitants: 40.6Cost of 20 hours of off-peak dial-up access: $US40.50 (includes local phone charges)Of note: In 2001 Forrester Research expects the United States to continue to lead Europe in online penetration, with 34 per cent of the US population connected, compared with 13 per cent in Europe.
Number of Internet hosts: 22,385
Hosts per capita: .0183
Personal computers per 100 inhabitants: .59Number of Internet users: 1.4 millionCost for dial-up access: In 1998 costs ranged from $US6 per month for 3 hours of access to $US36 a month for unlimited access, not including local phone charges.
Of note: While IDC expects the number of Internet users to grow to 9.4 million in 2002, Chinese users won't have the spending power of those in countries such as Singapore, Australia and South Korea, resulting in correspondingly lower levels of e-commerce.
Number of Internet hosts: 161,779
Hosts per capita: 3.82
Number of Internet users: 905,960
Personal computers per 100 inhabitants: 4.15Cost of unlimited dial-up access: Approximately $US16 (does not include local telephone charges, which are assessed by 3-minute units at a maximum of 32 cents per unit)Of note: South Africa does not have a monopoly on ISPs, according to BMI-TechKnowledge; there are more than 90 ISPs in the country, the most of any country on the continent.
Number of Internet hosts: 170,280
Hosts per capita: 1.04
Number of Internet users: 2 million-plusPersonal computers per 100 inhabitants: 2.62Cost of 22 hours of dial-up access: $US52.71 (includes local phone charges)Of note: In Brazil, according to IDC, many business Internet users rely on dial-up access because there is such a long waiting list for dedicated lines.
Number of Internet hosts: 1.2 million
Hosts per capita: 14.9
Number of Internet users: 10.8 million
Personal computers per 100 inhabitants: 25.5 Cost of 20 hours of off-peak dial-up access: $US74.61 (includes local phone charges) Of note: Some German Internet users made headlines in late 1998 by staging a "strike" to protest against high telecommunications costs.
The information for these boxes was compiled from a variety of sources including Matrix Information and Directory Services in Austin, Texas, www.mids.org, data from July 1998; OECD Communications Outlook 1999; ITU Worldwide Telecommunications Indicators Database, 1997; analysts at International Data Corp (IDC) in Framingham, Massachusetts, Mountain View, California, and Singapore; analysts at BMI-TechKnowledge (Pty) Ltd, Johannesburg, South Africa; "Brazilian Internet Access Providers 1998," International Data Corp; Australian Bureau of Statistics, November 1998; "Europe's Internet Growth," Forrester Research, Cambridge, Massachusetts, April 1998.
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