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To: ms.smartest.person who wrote (2170)	2/10/2002 10:45:07 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

HK firms wary of e-commerce Monday, February 11, 2002 SIDNEY LUK Small and medium-sized enterprises (SMEs) in Hong Kong have been slow to adopt e-business, according to the Hong Kong Productivity Council. A survey by the Productivity Council and the Information Technology Services Department found 45 per cent of 2,033 companies had no plans for e-business in the next six months. About 96 per cent of non-users said they had no need for the Internet, 16 per cent believed it would not bring any benefit to their businesses and 14 per cent said cost was a deciding factor. In a similar survey in May, only 2 per cent mentioned cost. Keung Wing-ching, the council's director for information technology and services, said: "It is not surprising that under the economic climate, companies tend to focus on how to better utilise existing equipment to improve efficiency, rather than invest more in new technology." However, 55 per cent of SMEs said they had implemented e-business strategies or had plans to in the next six months. This was up from 48.6 per cent in May. The council said e-business adoption among small businesses in Hong Kong was still at an early stage, with the majority lacking integrated systems or online transactions. Of the companies interviewed, 39 per cent admitted to using the Internet for nothing more than e-mail. "This finding shows that companies only use e-business services that bring direct benefits to their daily operation," Mr Keung said. "E-mail enhances efficiency and communication, and is therefore popular among SMEs." Web applications for online transactions or integration of external or internal information systems was mentioned by only 3.8 per cent. Productivity Council principal consultant Wendy Wong said this might be due to the low popularity of online shopping among SAR consumers. A recent survey by Nielsen/ NetRatings found that only 4 per cent of Internet users had made an online purchase during the past 12 months. This compared with Australia and New Zealand at 14 per cent, South Korea at 12 per cent and Singapore at 9 per cent. Ms Wong said: "The climate for online trading, especially business-to-consumer, is not very strong in Hong Kong. For online transactions, it requires a higher level of technology and involves more manpower, for instance, on security, pricing, customer orders and logistics." Respondents said the biggest hindrance was a lack of financial resources, human resources and technology. Online security was of the least concern. Charles Mok, president of the Hong Kong Information Technology Federation, said: "The slow adoption rate of e-business is not too astonishing. It is a new kind of investment, which people are more cautious about spending money on, especially with the economic downturn. "It may also be slightly related to amended legislation last April that some SMEs hesitated to initiate e-business because they were worried it would cost a lot for the licence fees." Legislation passed by the SAR Government last year made end-users criminally liable for possessing pirated software, films, television shows and audio recordings. Mr Mok said the Government had not done enough to encourage e-commerce adoption compared with counterparts in Taiwan, Singapore and the mainland. "I understand the Hong Kong Government has been encouraging e-business usage by organising seminars, setting up consultation centres and providing some SME funds," he said. "But what they really need is more direct financial support. What the Government has provided is not enough." He predicted more SMEs would move towards e-business this year. Mr Keung said: "We believe that local companies are likely to enhance their e-business capabilities as the economy improves." -------------------------------------------------------------------------------- SCMP.com is the premier information resource on Greater China. With a click, you will be able to access information on Business, Markets, Technology and Property in the territory. Bookmark SCMP.com for more insightful and timely updates on Hong Kong, China, Asia and the World. Voted the Best Online newspaper outside the US and brought to you by the South China Morning Post, Hong Kong's premier English language news source. -------------------------------------------------------------------------------- Published in the South China Morning Post. Copyright © 2002. All rights reserved. technology.scmp.com