Magazine article International Trade Forum

E-Commerce Trends

Magazine article International Trade Forum

E-Commerce Trends

Article excerpt

Internet-related issues are incorporated throughout ITC's work, and reported regularly in Forum. The articles ahead complement the previous issue of Forum, which presented a review of Internet trends, tips, cases, references and expert opinions targeted to exporters and importers in developing countries. This issue features practitioners' views on e-commerce (Exporting Better and Partners News and Views sections), an overview of ITC's latest work on the Internet (Close Up section), as well as feedback from a recent Internet Cafe in Senegal (ITC and the Internet section).

1. Internet use is growing faster than any other technology in recent history.

Internet use worldwide is growing fast. Between 1993 and 1997, the number of Internet hosts (computers connected to the Internet) grew from 1 million to 20 million; by 2001 that figure is expected to rise to 120 million.

Estimates of the value of global Internet commerce range from 1.3% to 3.3% of global gross domestic product by 2001 - equivalent in size to the economies of Australia and the Netherlands added together.

2. The intensity of Internet use roughly reflects levels of economic development.

Canada, Nordic countries and the United States adopted Internet technologies most rapidly. Many other countries in the European Union, Australia, Hong Kong Special Administrative Region of China, Japan, New Zealand, the Republic of Korea, Singapore, and Taiwan Province of China have now almost caught up with the early adopters.

In developing countries across South-East Asia, Argentina, Brazil, China, and in some island states such as Barbados, Fiji and Tonga, uptake of the Internet has also been growing rapidly since about 1996, although growth continues to be hindered by problems with telecommunications infrastructure.

It seems unlikely, however, that the Internet will have any significant impact on countries that consciously discourage Internet use during the next few years.

3. The Internet is a powerful tool for trade.

Using the Internet to lower communications costs and reduce time-to-market for goods and services exports makes it a very valuable medium for firms engaged in international trade. Its ability to deliver information of almost any sort in digital format at low cost offers significant efficiencies that firms can pass on to customers in the form of lower prices. It can also help manage supply chains for goods and services in cross-border trade, cutting overheads associated with marketing, transport and distribution.

The Internet also creates new opportunities to raise service levels, which are increasingly the key to successful business-to-business and business-to-consumer trading.

4. The Internet is an emerging global trading platform.

As Internet technology advances and overcomes problems with reliability and speed, it is likely to be used in almost every conceivable way to trade goods and services.

Many large firms now integrate on-line technology into their older proprietary Electronic Data Interchange (EDI) systems, and are building new Internet-based business systems for supply chain management and other inventory control.

Other trading systems, such as financial and commodity markets, are now in the early stages of moving to an Internet base. New supply and demand aggregation services, such as buying-groups and on-line auctions are leading markets in directions that were not feasible before the advent of the Internet.

5. The real impact is still to be seen.

As more and more countries use the Internet for trade, learning and social interaction, and as the number of industries affected by it grows strongly, it seems inevitable that the Internet's influence on international trade will grow very quickly.

Despite its portrayal as a popular communications medium (e-mail, games, chat), there are many more business-to-business than social transactions on the Internet; the ratio is as much as 4-to-1, according to US surveys. …

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