Asia Defiantly Embraces eCommerce

Companies Urged to Leverage eCommerce Initiatives to Remain Competitive in the Global Economy, According to an Accenture Study

KUALA LUMPUR; March 7, 2002 Despite the recent global economic downturn and still recovering from the dotcom aftermath, eCommerce continues to defy its skeptics and prove itself a potential source of opportunities with plenty to offer Asian countries, according to an Accenture study on the state of eCommerce in this region.

The study “The Future of Digital Asia," reveals that eCommerce has and will continue to provide opportunities for companies to do things better, faster, and more efficiently as customer and supplier relationships are strengthened. Seventy one percent of the respondents said recent economic setbacks had not affected their plans to pursue eCommerce initiatives.

More than 200 board-level executives were interviewed for the study across six countries experiencing varying degrees of technological sophistication: Malaysia, Korea, China, Taiwan and Singapore. “The Future of Digital Asia” is one of the first in-depth surveys of executive attitudes to eCommerce in Asia since the onset of the economic slowdown.

“Do not be deceived by the current climate of gloom and uncertainty. Companies should seize the opportunity to define their strategies, understand the Internet and determine how it can be leveraged to deliver a unique competitive advantage. This is the ideal time to invest, build and develop new capabilities and products,“ said Larry N. Gan, Managing Partner, Corporate Development , Asia.

To map out the landscape, a number of factors contribute to the region’s high potential for eCommerce initiatives. Firstly, the vast, yet mostly untapped markets see an unrelenting surge in Internet users for individual countries. Secondly, mobile phone usage is increasing exponentially, paving the way for cutting-edge opportunities for mCommerce; and lastly, Asia’s key role as a factory of the world creates ample opportunities for the region to reap large gains resulting from the online migration of suppliers and back-end manufacturing processes.

However, eCommerce capabilities vary widely across countries and businesses. This underscores the hesitant steps taken by companies in embarking on eCommerce initiatives. Whilst many see the value of engaging in eCommerce, most are complacent with using the Internet for customer interaction, relegating priorities on other efforts such as back-office streamlining or supply-chain management. Survey respondents added that barriers to eCommerce went beyond technological complexities to include the reluctance by management and employees to change working habits and attitudes.

Another bolster to eCommerce is its expected increase in usage in back-office areas such as purchasing and logistics in the near future. Some findings further point to successful companies pursuing collaborative efforts across the supply chain to improve their effectiveness in areas such as product design, forecasting, scheduling, inventory management and purchasing.

Asia also shows remarkable potential to be a pioneer in the realm of mobile technologies. Mobile phones and wireless applications in Asia will significantly drive mobile commerce and wireless revenues in the near future as their usage surpasses that of other parts of the world.

In light of these opportunities, survey respondents are preparing themselves for greater competition with close to fifty percent of them admitting to tightening their internal processes. Along those lines, many businesses will reshape themselves to gain economies of scale while leveraging leading-edge capabilities stemming from an increased dependency on outsourcing, collaboration, and networking.

In pursuit of increased business and cost efficiencies, Asian companies will need to place greater emphasis on using eCommerce to streamline supply-chain operations and integrate internal processes in order to reinforce its competitive position as factory of the world. On the flipside, revenue generation from eCommerce initiatives remain the prize of merely 45 percent of the companies surveyed.

Even though the market downturn has crippled a number of online competitors, most firms admit it cannot afford to ignore the real possibilities that the Internet has to offer. The Internet constantly provides new technological advances and opportunities, and the first mover advantage is on the verge of being extended to many new areas.

“The nature of competition itself has been altered by eCommerce, making it more transparent, faster and more global than ever before. This trend is here to stay. Asian companies must embrace the opportunities and challenges brought on by these changes with confidence and imagination,” said Gan.

About Accenture
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