Tuesday, November 14, 2000
Global Online Exports to Soar to $1.4 Trillion
The Internet presents a wealth of opportunities to streamline
international trade. According to a new Report from
Forrester Research, Inc., global online exports will
surge to $1.4 trillion in 2004 -- with cross-border
eMarketplace trade surpassing $400 billion. However,
cross-border trade will not flow equally among nations,
resulting in an emerging split between countries that
actively export and import using the Net and those
that do not.
"While B2B eCommerce is accelerating throughout
the US, most businesses don't operate in domestic-only
supply chains," said Matthew R. Sanders, analyst
at Forrester Research. "Online trade will expand
globally as firms use the Net to attack inefficiencies
in today's international trade practices."
Forrester projects that Western Europe will lead all
regions with $692 billion in global online exports in
2004, driven by Germany's $144 billion in online cross-border
sales. In that same time frame, North America will see
more than 23% of its exports move online, led by the
US with $210 billion in cross-border eCommerce. Asia-Pacific,
fueled by $57 billion in Japanese online exports, will
reach $219 billion in four years.
According to Forrester, global eMarketplace trade will
reach $408 billion in 2004. Petrochemical exports will
propel Western Europe to $215 billion. Denmark and Norway
will lead the region -- with each sending more than 10%
of their international sales via these venues. While
sales through eMarketplaces within Canada and the US
will reach $1.5 trillion in 2004, only 7% of these online
sales will flow across borders. Asia-Pacific exports
through online markets will reach $50 billion, driven
by sales to North American firms.
As online cross-border sales grow to $1.4 trillion over
the next four years, a split among countries will emerge,
based on their adoption of the Net for imports and exports.
As a result, countries will fall into one of two categories:
eBusiness extroverts or eBusiness introverts. Nineteen
countries -- the eBusiness extroverts -- will dominate
online international trade. Led by Canada, Norway, and
Denmark, these extroverts will represent more than 80%
of online imports and exports.
Although the Net will impact countries in different
ways, Forrester believes that national policies remain
critically important. "eBusiness introverts shouldn't
just give up. They can accelerate their eBusiness positioning
by adjusting policies and targeting technology infrastructure
investments," said Bruce D. Temkin, research director
at Forrester Research.
eMarketplace trade will ultimately disrupt many of today's
global trading patterns. To determine the impact of this
shift on different countries, Forrester created the eMarketplace
Export Index (eMEI), defined as "the potential for
export gains from the growth of global eMarketplace trade." Countries
with an above-average eMEI, like Canada, the US, and
Belgium/Luxembourg, will see the expansion of their collective
online exports hit hypergrowth in 2001. On the other
hand, the adoption of online exports in nations with
a below-average eMEI, like China, Hong Kong, and Japan,
won't hit hypergrowth until 2003.
For the Report "Sizing Global Online Exports," Forrester
interviewed 50 eMarketplaces that have plans to recruit
international participants. US eMarketplaces expect 44%
of their volume to come from abroad by 2002. In addition
to this primary research, Forrester modeled the eCommerce
adoption in more than 18,000 trade pairings among 48
countries.
Australian Online Population Reaches 40 Percent
Despite Australia's current 40 percent online penetration
rate--one of the highest in the world--revenue opportunities
for both advertising and commerce have yet to materialize,
according to new findings released today from Jupiter
Research, the worldwide authority on Internet commerce.
Jupiter analysts believe that the lack of market development,
combined with the limited scale of the Australian market,
represents a critical challenge for online players.
Winners will shift business models to leverage the
inherent benefits of the medium: targeted marketing
and deeper relationships with consumers.
Online Ad Spending Lags
Within the Australian market, online access does not
equate with revenue opportunities. For example, the
online advertising market will reach AU$70 million
(US$35 million) in 2000, but will represent only 0.5
percent of total advertising spending. In comparison,
Canada, with online penetration of 42 percent, has
1.7 percent of the advertising market online; three
times the impact in Australia.
Online Commerce Follows Sluggish Trend
Online commerce activity faces similar hurdles with only
12 percent of Internet users in Australia expected
to buy online in 2000, versus 40 percent in the US
and 25 percent in Canada, according to Jupiter Research.
The Australian market's lack of attention to online
consumers appears to correlate with the relatively
low online usage intensity of Internet users in Australia.
The average user in Australia spent less than 10 hours
online in August, versus US users who spent over 15
hours online, according to Jupiter Media Metrix's new
Jx Intelligence report on Australia.
"The status of online advertising and commerce
is typical of the Australian market, where reluctance
on the part of consumers and businesses has dampened
the revenue potential that such high online penetration
offers," said Guy Cranswick, an analyst for Jupiter
Research, Australia. "Combined with the limited
scale of the market and the flight of Internet traffic
to US sites, online players in Australia face a tremendous
barrier to reaching profitability."
Ventures Must Act Now to Leverage Value of the Medium
With the market at a crossroad, online ventures must
act now to adjust their business models to fully embrace
the medium. "For publishers, it's not about mirroring
US success, but changing the market's perception of
what the medium can offer," said Cranswick. "They
must refocus on business models that sell the value
of the medium, including using site research to justify
marketing online, selling the quality of audience,
and working with advertisers to ensure the most appropriate
placement. As for commerce companies, success hinges
on broadening the consumer value proposition, by personalizing
service and extending the relationship beyond a single
transaction."
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