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Ecommerce Overview


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Ecommerce Overview

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