Not Fade Away

IDC believes many organisations will come to regret this indifference because its research indicates that the e-business market is continuing to grow

"Buzz", The Industry Standard's (US) barometer of the e-business marketplace, tracks Internet industry announcements containing the words Internet or Web. In the last week of March 2000 there were just under 1200. In the most recent week charted in May this year there were 261. Clearly, e-commerce is no longer flavour of the month.

IDC believes many organisations will come to regret this indifference because its research indicates that the e-business market is continuing to grow. My colleague Brooke Galloway measured the number of e-commerce transactions in Australia last year as $US4.6 billion. Her studies indicate that this is likely to grow to $78.6 billion by 2005. Moreover, in comparison with its competitors, IDC is the most conservative in its predictions for the value of the e-commerce market.

While the lion's share of e-business will be B2B activity, the value of B2C transactions will also rise. It is expected that the average amount spent per year by e-commerce buyers in this region will grow from $653 to $3391 by the end of 2004.

The latest IDC consumer research across the Asia-Pacific region asked respondents how they used the Internet. Just under a third used it for shopping. Perhaps more importantly, 46 per cent utilised it for research prior to buying. As consumers become more comfortable with buying online, it can only be a matter of time before those researching purchases decide to complete the acquisition electronically.

At present the main things purchased are books and software, both of which had been acquired by around 40 per cent of those responding. However, in the future, IDC research shows that these will remain at an almost constant level while travel, music and tickets for sporting and cultural events are likely to grow to match them in online importance.

Whether this is realised depends on the ability of CIOs to overcome the perceived obstacles they have with effectively harnessing the Internet. In particular, an increasing number identify cost and corporate vision as factors preventing their organisation better exploiting the Internet. In these cost conscious times, this probably reflects the difficulty of speculative investments and a loss of enthusiasm for the Internet among executives following the dotcom crash and the disappearance of e-commerce in the mainstream media.

Brooke's view is that this reduced enthusiasm is regrettable. In her opinion the continuing growth in e-business indicates a maturing in the marketplace. She believes this is just the time organisations should invest in e-business initiatives. There is no doubt that the Internet will become an important channel for reaching many consumers. Clearly, those organisations that succeed in the B2C arena will be those who maintained the faith in the potential of e-business when times for it were tough.