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Getting Personal:
International E-Commerce
by Christopher Limerick, MBA 99
Electronic commerce promises to open global markets to even the smallest competitors. The great strides that have been taken of late in the technologies of global communications only serve to reinforce the predominant euphoria.
“We are on the verge of a revolution that is just as profound as the change in the economy that came with the industrial revolution,” Vice President Al Gore wrote in A Framework for Global Electronic Commerce (1997). “Soon electronic markets will allow people to transcend the barriers of time and distance and take advantage of global markets and business opportunities not even imaginable today, opening up a new world of economic possibility and progress.”
However, as with the advent of the industrial revolution, not all participants will be able to enjoy the full benefits of this brave new world. The main factors contributing to this issue are not technological. For most of these players, the excitement of participating in the international arena must be tempered by an understanding of the current cultural and economic realities of the largest untapped regions.
The key issues of concern to most proponents of electronic commerce fall within three categories: Financial, Legal, and Market Access. Across the globe, the development of governmental laws and regulations, deregulation of monopolistic telecommunications providers, and evolution of consumer behavior will determine the speed with which these issues will be addressed. For enterprises endeavoring to take advantage of potential opportunities in international electronic commerce, the best strategy is a forward-looking, market-driven approach. Instead of aligning with a particular technology, and counting on specific standards or legislation, look toward the trends evolving in the various markets. These can be addressed, from a consumer standpoint, by asking:
- What ways of buying things am I comfortable with? (Financial)
- Are my transactions and my personal information safe? (Legal)
- How can I participate within the limits of my local infrastructure? (Market Access)
What ways of buying things am I comfortable with?
Only recently have firms begun taking into consideration cultural buying habits. The Internet evolved as English based and electronic commerce initially developed with a strong ethnocentric U.S.-oriented culture. This cannot last and those companies that understand how to best serve the needs and wants of international consumers will prevail, not only with products and services, but also with how those products and services are uniquely presented and exchanged in accordance with local customs.
Are my transactions and my personal information safe?
Without going into the details of encryption, export laws, intellectual property protection, or even the latest privacy debates, electronic commerce will not become mainstream until consumers settle the issue of trust. Trust means different things to people across the world. For example, as Stephen Baker wrote in an article, “Europe’s Privacy Cops,” in the October 22, 1998, issue of Business Week, “Europeans look to democratic regimes to protect their privacy. Americans, meanwhile, tend at first to leave information flows unregulated. Later, they slap controls on objectionable areas.” While whole business models in the United States are based upon the collection and selling of personal information gathered by electronic means, European and Asian countries are instituting strict regulations giving individuals the ultimate decision-making authority as to the disposition of any element of their personal information.
How can I even participate given the limits of my local infrastructure?
Currently access is the greatest bottleneck in the growth of international E-commerce. The authors of The International Internet Market: The Reality behind the Hype (a January 28, 1998, Gartner Group Strategic Analysis report) caution that “enterprises should keep in mind the various stages of penetration of the Internet in different countries when they plan to incorporate it in their networking strategy. They should not expect to be able to reach potential customers via a World Wide Web page at the same rate as they would in the U.S.” The limited access to the Internet due to local infrastructure development, or lack thereof, not only limits the absolute number of potential consumers available to be reached in a particular market using this medium, but creates a lag in the learning curve when access is finally available.
As with most important business decisions, there is no formula to help you figure out when, where, and how to pursue international electronic commerce. The most important thing to remember, though, is what customers you are attempting to engage and what issues are most important to them.
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