traditional vs e business

Sistem Maklumat Pasaran & Antarabangsa

1MTIB, KPPK

:: CHALLENGES & TRENDS

• Uncertainties in the global economy• Inclusion of China into WTO• Implementation of AFTA• Global sourcing for cheaper/higher quality of finished

goods and components• Impact on new technologies (ICT) in business process• Information is available at your fingertips• Consumers taste and preferences are dynamically

changing• New criteria for international competitiveness : Timely

Delivery Of Service (besides price & quality)• LATEST! : Post-War Iraq, SARS Outbreak, Avian

Flu and War on Terrorism


2MTIB, KPPK

:: Conventional Trade Promotional Activities

• Conventional WayParticipation in general/specialised trade fairs

and exhibitions worldwide

Participation in Trade and Investment Missions

Participation in Specialised Selling Missions

Participation in Malaysian Products Exhibition /

In-Store Promotion / Promotion Booths


3MTIB, KPPK

::

NEW WAY (e-way)

E-COMMERCE


4MTIB, KPPK

:: WHAT IS e-COMMERCE?

• Abbreviation of “electronic commerce”• Putting “e” into all commerce activities• “The use of computers and electronic

network to do business”• Transacting Online – “buying and selling of

goods/services via the Internet”• “Business transactions conducted

electronically”• “Electronic exchange of information,

goods, services & payments”


5MTIB, KPPK

:: BROADER DEFINITION

• WTO’s Definition

“All commercial transactions involving the transfer of information, products, services or payments performed through telecommunication networks, using electronic means. It comprises indirect e-commerce (electronic ordering of tangibles) and direct e-commerce (online delivery of intangibles).”

SOURCE : World Trade Organisation (www.wto.org)


6MTIB, KPPK

:: BROADER DEFINITION

• ITC’s DefinitionThe distribution, marketing and sale or delivery of goods and services by electronic means including business-to-consumer (B2C) and business-to-business (B2B) transactions. It is not confined to the purchase of a product but it includes all information or services that a company may offer to its customers over the Internet from pre-purchase information to after-sales service and support.”SOURCE : International Trade Centre, WTO/UNCTAD

(www.intracen.org)


7MTIB, KPPK

:: UNDERSTANDING THE CONCEPT

• Electronic trading of goods & services

• Online delivery of digital content

• Electronic funds transfer• Electronic share trading• Electronic bills of lading• Commercial auctions

“All forms of business transactions conducted over public and private networks”

SOURCE : Inter-Agency Task Force On e-Commerce, The Government Of Malaysia

• Electronic procurement• Collaborative designs• Engineering &

manufacturing• Online sourcing• Direct consumer

marketing• After sales services


8MTIB, KPPK

:: UNDERSTANDING THE CONCEPT

• e-Commerce is: NOT just about the Internet NOT just about paying online NOT entail actual payment online NOT necessarily done over the Internet

• “electronic” medium: Telephone (e.g. phone banking) Private network (e.g. ATM) Credit cards The Internet itself!


9MTIB, KPPK

:: e-COMMERCE vs e-BUSINESS

• e-Commerce defined: The process of buying and selling goods or services

through the Internet (ICT as intermediary or enabler) or other electronic network.

• e-Business defined: The utilization of ICT and Internet-based

applications in existing business processes, business strategies and business value-chain. It influences all aspects of company's strategy and business transactions, hence helping streamlining operations and improve profits while ensuring a sustainable competitive advantage.


10MTIB, KPPK


Mathematically,

EB = EC + BI + SCM + CRM + ERP

Where: EB = e-Business EC = e-Commerce BI = Business Intelligence SCM = Supply Chain Management CRM = Customer Relationship Management ERP = Enterprise Resource Planning


11MTIB, KPPK


E-BUSINESS

E-COMMERCESUPPLY-CHAIN MANAGEMENT

ENTERPRISE RESOURCE PLANNING

BUSINESS INTELLIGENCE

CUSTOMER RELATIONSHIP MANAGEMENT

SOURCE : Strauss, J & Frost, R (2001), eMarketing


12MTIB, KPPK

:: NEW WAYS TO DO BUSINESS

• Emergence of new business intermediaries (portals, B2B e-marketplaces)

• “Old Economy” VS “New Economy”, i.e. “brick & mortar” VS “virtual enterprises”

• Information is available immediately • Expand existing market & access new markets• Customise clients’ requirements (add value)• More services are web-enabled (travel, banking,

health, etc.)

THUS, e-Commerce redefines criteria for international competitiveness : Price, Quality, Time and Service


13MTIB, KPPK

:: IN THE BUSINESS

E-Commerce is applicable in external & internalaspects of the business:• EXTERNAL – Facilitate marketing activities and

widen the business prospects through:Customers/clients (e-mail)Supplier/distributor/agents (portals, e-marketplace)Government (e-procurement)Electronic transaction (e-banking, auction, etc)

• INTERNAL – Effective information management:Business information (marketing, intelligence)Financial information (integration & control)Stock/inventory control (database)Efficient production (ERP, CRM systems, etc)


14MTIB, KPPK

:: MECHANISMS

• B2B (Business-To-Business) Portals (TradeNex, MyBiz, Globalsources, etc)

• B2C (Business-To-Consumers) AsiaTravelMart, WatchesPlanet, Teddybearland

• G2B (Government-To-Business) e-Perolehan

• G2C (Government-To-Consumers) e-Services, MyEG.com, Rilek.Com

• P2P (Peer-To-Peer) Napster, Kazaa, Lelong.Com.My


15MTIB, KPPK

:: BEAUTY OF e-COMMERCE

• “24-7-365” factor• Worldwide reach-out in real time• Make the size of a company irrelevant• Make the location of a company irrelevant• Do most business transactions online : E-

Banking, E-Payment, E-Procurement etc.• Increase customer feedback towards

faster and better business decision making

• Lower cost of transaction


16MTIB, KPPK

:: A COMPARISON

• Limited coverage• High advertising cost• High traveling &

accommodation costs• High postage cost• High cost of exhibiting• Slow communication

process• Wide marketing coverage• Longer marketing channel• Low profit margin

CONVENTIONAL

• 24 hours daily, all over the world• Low advertising cost• Save on first time business

traveling costs • Lower costs using

computers/Internet• Low cost for Virtual Exhibition• Direct contact to

importers/buyers• Flexible wide marketing

coverage• High profit margin

E-COMMERCE


17MTIB, KPPK

:: TOOLS FOR TRADE

• E-Commerce SiteWebsite with e-commerce facilities (B2C) -

online catalogues, payment gateway, shopping cart, e-forms

• Electronic mail (E-Mail)Communicating through the net, e-mail

marketing, mailing lists• Electronic Data Interchange (EDI)

Customs declaration, inventory control, logistics, warehousing, ports clearance, shipping/vessel tracking

• Electronic Funds Transfer & PaymentEFTPOS, e-Cash, Online Letter of Credit, etc


18MTIB, KPPK

:: TOOLS FOR TRADE

• Participation in Trade portals / e-marketplaces / business exchangesBusiness-To Business (B2B)Business-To-Consumer (B2C)

• Web-based Directories/ListingTrade/Industry AssociationsOnline Business Directories

• Global sourcing/supply chain managementTiGER, RosettaNet, virtual manufacturing

• Participation in Virtual Trade Fairs / Shows / ExhibitionsCost effective, impressive images


19MTIB, KPPK

:: POTENTIAL OF E-COMMERCE

• Global e-Commerce revenue has been forecasted to RM17.5 trillion in 2005 Business-To-Business (B2B) – RM16.4 trillion Business-To-Consumers (B2C) – RM1.1 trillion

• Total revenue from e-Commerce activities in Malaysia will be RM35.3 billion in 2005 Business-To-Business (B2B) - RM29.6 billion Business-To-Consumers (B2C) – RM5.7 billion

SUMBER : E-Commerce & Development Report 2002 by UNCTAD, UN

• Total Internet users: Worldwide – 655 million (2002), 941 million (2005) Malaysia – 5.7 million (2002), 8 million (2005)

SUMBER : International Data Corporation (IDC)


20MTIB, KPPK

:: ROUND THE GLOBE

• Countries which are actively using e-commerce: ASIA PACIFIC : Hong Kong, Japan, Taiwan, South Korea,

China NORTH AMERICA: USA & Canada WESTERN EUROPE : Germany, UK, France & Holland

• High potential to use e-Commerce: WEST ASIA: UAE, Iran, Qatar South Africa Eastern Europe AMERICA LATIN : Argentina, Brazil,

Mexico, Chile

SOURCE : TC MATRADE


21MTIB, KPPK

:: MALAYSIAN EXPORTERS

INTERNET PENETRATION AND CONNECTIVITY

SOURCE : MATRADE

:: Information correct as at 1 October 2003

Malaysian Exporters Breakdown By E-Mail/Website

FACILITIES TOTAL % OF TOTAL

WITH E-MAIL 6,069 86.96

WITH WEBSITE 4,253 60.94

WITH E-MAIL AND WEBSITE

4,100 58.75

EXPORTERS REGISTERED WITH MATRADE

7,027 100


22MTIB, KPPK

:: SOME RELEVANT ISSUES

• SECURITY : Always be The Reason• COST : Many companies put very conservative

approach and skeptical consideration• TECHNOLGICAL KNOW-HOW : How to choose the

best solutions / service providers for my company?

• KNOWLEDGE : Lack of relevant knowledge as e-commerce develops rapidly

• MINDSET : e-Commerce is “owned” by the (Gen-X, Gen-Y, etc..) guys… “wiser” / “experienced” people always left out


23MTIB, KPPK

:: E-COMMERCE INCENTIVES

• SMIDEC’s financial assistance programse-Manufacturing GrantE-Commerce Grant (DISCONTINUED WEF 27

JUNE 2002)RosettaNet Grant

• Double deduction incentive for promotion of exports:Participation in Virtual Trade ShowsParticipation in trade portals for promotion

of local products


24MTIB, KPPK

:: MORE INCENTIVES...

• Tax on income derived from offshore trading (buying and selling of foreign goods to non-residents) through websites was reduced from 28% to 10% for a period of 5 years, effective from 20th October 2001

• The costs of developing websites for business are allowed as an annual deduction of 20% for income tax purpose for 5 years, effective from year assessment 2002

• Market Development Grant (MATRADE) 50% matching grant up to RM60,000 for the cost of

promotion/advertising through the Internet


25MTIB, KPPK

:: SEARCH ENGINES

• Web Directories About.com (www.about.com) Ask Jeeves (www.ask.com) Look Smart (www.looksmart.com)

• Leading Search Engines Google (www.google.com) Teoma (www.teoma.com) Inktomi (www.inktomi.com)

• Meta Search Engines Vivisimo (www.vivisimo.com) Metacrawler (www.metacrawler.com)

• Search Engines Guides & Directories Search Engine Watch (www.searchenginewatch.com) Search Engine Guide (www.searchengineguide.com)

http://www.about.com/

http://www.ask.com/

http://www.looksmart.com/

http://www.google.com/

http://www.teoma.com/

http://www.inktomi.com/

http://www.vivisimo.com/

http://www.metacrawler.com/

http://www.searchenginewatch.com/

http://www.searchengineguide.com/


26MTIB, KPPK

:: BUSINESS INFORMATION GATEWAYS

• Directory listings of business-related sites, compiled by business information specialists

• Some useful sites Datamonitor (www.datamonitor.com) Economist Intelligence Unit (www.eiu.com) Euromonitor (www.euromonitor.com) ITC Product Maps (www.p-maps.org) Market Research (www.marketresearch.com) Mindbranch (www.mindbranch.com) Business.Com (www.business.com) ExportAll.Com (www.exportall.com Yellow Pages (www.yellowpages.com) The Edge Daily (www.theedgadaily.com)

http://www.datamonitor.com/

http://www.eiu.com/

http://www.euromonitor.com/

http://www.p-maps.org/

http://www.marketresearch.com/

http://www.mindbranch.com/

http://www.business.com/

http://www.exportall.com/

http://www.yellowpages.com/

http://www.theedgadaily.com/


27MTIB, KPPK

:: OTHERS

• Malaysian Government Sites Malaysian Civil Service Link (mcsl.mampu.gov.my) e-Perolehan (www.eperolehan.com.my) MITI (www.miti.gov.my)

• Trade-related organisations World Trade Organisation (www.wto.org) International Trade Centre (www.intracen.org) Federation Of International Trade Associations (

www.fita.org)• E-Commerce-related

E-Commerce/IT news (malaysia.cnet.com, www.ecommercetimes.com)

RosettaNet (www.rosettanet.org.my) B2Business (www.b2business.net) Building a website (www.sellitontheweb.com)

http://www.about.com/

http://www.eperolehan.com.mym/

http://www.miti.gov.my/

http://www.wto.org/

http://www.intracen.org/

http://www.fita.org/

http://www.malaysia.cnet.com/

http://www.ecommercetimes.com/

http://www.rosettanet.org.my/

http://www.b2business.net/

http://www.sellitontheweb.com/


28MTIB, KPPK

:: Conclusion

The Best Way…..

Conventional Way +

e-Way

traditional vs e business

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