**OT** The Giants Wake Up
-Business Times (Singapore)
Thursday, February 24, 2000
(China, India and Indonesia, three of the world's most populous nations, are just about getting ready to ride the e-commerce bandwagon, reports TOH HAN SHIH)
CHINA, India and Indonesia, which between them account for the bulk of the world's population, are now waking up to opportunities on the Internet. They are adapting to the Net and to e-commerce, and seem in a hurry to close the technology gap.
"India and China have the greatest potential to be leaders in e-commerce in the region, once they develop their infrastructure," Matthew McGarvy, Internet analyst for the Asia-Pacific region at International Data Corp (IDC), told dot-com. "India and China's telecom infrastructure is still not well developed, and most Chinese lack international credit cards, which is the main way to make payments in e-commerce."
China and India are unique countries with explosive growth of e-commerce, sheer population size, and poor infrastructure. "This paradoxical combination makes for an e-commerce model that will not grow in the same way as advanced countries did," Mr McGarvy said.
By 2004, China will rank third in e-commerce in the Asia-Pacific region outside Japan, after Australia and South Korea. By then, Singapore will rank fifth, India sixth and Indonesia ninth or 10th in the region.
Despite the financial crisis, Indonesia's Net adoption grew rapidly from 200,000 users in 1997 to 890,000 users today, according to IDC. "Indonesia's Internet population will triple to 2.7 million by 2004, despite its political, social and economic instability," said Mr McGarvy.
About 28.6 per cent of Indonesians started using the Net more than four years ago, which is a higher percentage compared to India and China, according to Technowledge Asia, a Singapore IT market research firm's survey of 995 Net users in Indonesia, 1,230 in India and 2,585 in China. About 29.9 per cent of Indonesian Net users have bought things online, which is higher than Singapore's 27.4 per cent, Technowledge found.
Among Indonesians who have e-shopped, 39.3 per cent said they spent more than US$ 100 (S$ 170) in the past six months, which is a higher percentage than Singapore.
"It's really sad when you think what Indonesia could have been as a wired nation; it was an early adopter of the Internet," said Rameshwari Ramachandra, managing director of Technowledge.
Echoed Mr McGarvy: "Even throughout the Asian crisis, we saw people in Indonesia wanting to use e-mail. The explosion of Net users there seems to defy the country's social and political instability."
Most Indonesian Net users belong to the upper middle class and a small minority belong to the super rich, said Ms Ramachandra. "They resort to buying things online so as to be discreet about their wealth during these uncertain times."
Technowledge found 19.1 per cent of Indian and 12.3 per cent of Chinese Internet users have bought online -- most of them having spent less than US$ 100 in the last six months. "About two-thirds of Chinese cybershoppers buy online from Chinese merchants because they lack international credit cards to make overseas purchases," Ms Ramachandra said. "Only a fifth of Chinese cybershoppers were satisfied with their online purchases, reflecting the unreliable quality of Chinese goods sold online. By contrast, most cybershoppers in India and Indonesia expressed satisfaction with their online shopping."
In e-banking, Indonesia, India and China do not lag far behind Singapore -- 9.8 per cent of Indian, 8.5 per cent of Indonesian, and 7.7 per cent of Chinese Internet users have banked online, Technowledge found. By comparison, 14.9 per cent of Singaporean Net users have banked online.
Another favourite: Internet telephony. The high cost of telecom encourages people in India, Indonesia and China to find cheap alternatives for long-distance calls. Technowledge found that among Net users, 32.9 per cent in China, 26.2 per cent in India, and 19.5 per cent in Indonesia have used Internet telephony.
"In China, the biggest use of the Net seems to be to download software. In many other nations, e-mail is the biggest use," Ms Ramachandra said. "That's because many Chinese Net users are IT professionals."
As a sign of how IT-savvy Chinese Net users are, a high 48.5 per cent of them have created Web pages, compared to 35.8 per cent in India and 37.8 per cent in Indonesia.
As is clearly shown, Net users in India, China and Indonesia are at least as savvy and willing to do e-commerce as those in advanced countries like Singapore. Unfortunately, the e-commerce spending per capita in these three populous countries will be very low for the next few years, which will lead to a digital divide between the wired minority and the un-wired majority, according to IDC. |
