Ecommerce overview

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  • 1. IT for Decision Makerse Commerce Overview
  • 2. What is e Commerce? e commerce is enabling or achieving your business objectives by using information technology to enhance or transform your business processes. Kami, 2000
  • 3. e commerceBusiness to business (B2B)  automating supply increasing business efficiencyBusiness to Consumer (B2C) Retail Sales Customer SupportConsumer to Consumer (C2C) Online Auctions
  • 4. eCommerceecommerce is more then just an online shop selling goods…. Businesses make huge savings by more efficient interaction with their suppliers or buyers. A local pharmacist orders 60% of his supplies from an overseas pharmaceutical suppliers website and saves 5% in his purchases - is this ecommerce? A remote Fiji resort attracts guests from the USA after several exchanges of email. Is this ecommerce?
  • 5. Global400 million users of Internet worldwide1999 US online retail sales - US$20bn. Forrester Research2000 US online retail sales - US$30bn+ Forrester ResearchUS Online buying will reach US$6.9 trillion 2004. Forrester Researchelectronic payment of bills and banking will cost US Postal Service $17bn over 10 years.
  • 6. Interpretation ?Consumers are willing to spend money on online transactions.Despite the recent dot.com drop in investment - consumers continue to use the Internet in growing numbers.The US figures are only part of the global picture.
  • 7. What is working? Pornography Travel / Tourism Retail - items that don’t need personal touch - objectivity in product quality and performance music, books, gifts, Computers, electronic items Auctions Real Estate - houses and investment properties. Customer support services More efficient and effective processes between businesses (B 2 B)
  • 8. What is not working?Items which require “touch and trial” Luxury goods Clothes - beyond TshirtsGroceries - it works for some people but market is restrictedNote: Many OFF line factors determine success of Online service. Eg. Transport network, customer profiles,
  • 9. e commerce and thePacificTraditional BarriersIsolation – distance from marketSmall local marketsLimited human capacityOpportunityInternet provides “instant” access to global market
  • 10. ecommerce adoption inPacificTourism small operators and multi nationals expatriate owned businesses due to better awareness of communications possibilities.Online retailers - often overseas based, some Pacific based exporters.Generally for the Pacific it has been ad hoc entry with ecommerce/
  • 11. Lessons from experiencePopular Sites Not = Revenue Online Advertising Market is immature especially in the Pacific. What visitors do on a website is more important then inflated “hits” figures Income models based on advertising must be supported by online sales.Start with a strategy know your market and how to reach themTraditional Off line issues determine profitability management, product, operations and financing.
  • 12. e Commerce and PacificThe challenge is identify market niches for products unique to the Pacific (core competencies) EcoTourism, trade niches, island goods Identify skill industries where local capacity can be developed and product transferred electronically. (insurance, banking, drafting etc)Avoid entry in IT labor market - call centers, credit card processing without an exit plan because these IT niches will be the world’s most MOBILE industries and governed by cost of labor.
  • 13. Demonstrations - TourismTourism: www.tongaonline.com/sailingsafaris Sailing Safaris - Tonga One boat operation in 1996 from small island base  Competing with 2 multinational yacht companies with global marketing network Since 1997 - 80% of business from web site. This statistic 60-80% of bookings from web inquiries is common to Tourism operators in the Pacific.
  • 14. Example 2 - TourismPacificnavigator.com - Travel PortalOne stop shop for travel info and bookings.9 Pacific Island CountriesTravel Information and BookingsSticky Items - bring people back to site message boards for comments News Postcards
  • 15. Example 3 - RetailWww.Fijilive.com - Portal Popular site and daily local news. immature advertising market – difficult to get local advertisers. Sticky Features News Numerous in-house websites sells through www.fijionsale.com uses credit card transactions with manual batch processing Kava, music, Jewelry, etc.
  • 16. Example 4 - RetailArtifacts - Papua New Guineawww.niugini.com - PNG PortalSticky Features Forums, News, Chat, Postcards, Info pages Sells PNG artifacts.Transactions via email and bank transfersGreat product but management and operation issues and no online transactions.
  • 17. RememberThe Internet is the best opportunity for Pacific Island business since the Jet Plane however:traditional business principles still matter online. Value to the customer comes first. Be realistic about revenues and costsFor the Pacific the initial market is overseasInitiative and creativity are premium.
  • 18. PART IIAn ecommerce strategy for a SmallPacific Island Business By Taholo Kami for UNESCO
  • 19. Objectives?Why get online? Promote awareness of your Organization Sell a product Customer support Information and contact page Networking Everyone else has a web page
  • 20. PlanWhat is your product? Electronic, Services or physical Portable and inexpensive to deliver TourismWho is your market? Overseas Fish buyers Upper income art collectors Budget travellers / Up marketObstacles, Implementation and deadlines.
  • 21. Getting OnlineHosting Your Website Fast Access Cost, Support, Space and ServicesChoosing a Domain Name (web address)www.myname.com / .nu / .to / .tv / .fj / Calling Card Choose name that relates to product Reflects on organization Easy to remember
  • 22. Design IssuesOften Simple Is Better E.g. National PNG, Yahoo Complexity depends on your website objectivesPlanning content How do you keep content fresh and relevant Who Develops your website? Professional Services Do it Yourself
  • 23. Web Site SoftwareWeb-site Creation Common Software Tools. Image Editing  Adobe Photoshop Jasc.com Web Page Development Paintshop Microsoft Front page - $150 Dream Weaver - $150 – 200 Netscape Communicator-Free Note: There are a lot of cheaper software online.
  • 24. Managing your Web SiteManaging your website can take TIME!Adapting Business processes Good Samaritan Inn example Look at employee time Customer expectations Limitations of the medium (non face to face)
  • 25. Transactions1. Getting paid online is very difficult in the Pacific. Many banks will need a large deposit or a strong relationship to allow a SME to open a merchant / credit card processing account at a bank.Alternatives include: Bank transfer / wire Credit Cards  Merchant account  Manual / Automated processing  Third party processing  paypal.com
  • 26. DeliveryDelivering an artifact after online purchase or attracting visitors to an eco tourism resort - managing expectations is essential People are used to guaranteed delivery but more importantly, communicate reality so expectations are realistic. E.g. Implement a 2 week guarantee for goods Ensure online advertisement meets expectations Use a reliable delivery service (TNT, FedEx)
  • 27. Marketing Web siteHow do people find your website?ONLINE Strategy Links from related and / or popular web sites Search Engines Online Advertisements Informed by other users
  • 28. Marketing Your WebsiteOFFLINE Strategy - Show Your URLwww.MYCOMPANY.com Stationary Advertising on conventional media Trade shows
  • 29. ConclusionDespite infrastructure limitations in the Pacific, the target market in developed countries are likely to be Internet users.If unsure, start small. An existing website helps develop your capacity to interact with customers and measure web potential.Lobby Government for effective IT Strategy that develops infrastructure and builds local capacity.