STATISTICS SINGAPORE - International Conferences - SME Electronic by tyndale


									SME Electronic Commerce Study

Singapore, 7 December 1999
Presentation by Joshua Shapiro
                  Study Methodology

    • A multilingual survey in nine
      languages was conducted over
      the Internet and on paper in each
    • Focus groups (at least two)
      were conducted with SMEs in
      each economy
    • Key informant interviews (three
      or more) were conducted with
      key electronic commerce experts
      in each economy
    • Desk research and related
      studies provided background and
      contextual material for this study
    Priorities for SMEs

    • Customers and Markets
    • Supply Chain Integration
    • Confidence and Trust
    • E-Business Models and Technology

                   Customers and Markets

    • Improving customer service and
      information exchange was              90
      identified as an important benefit    80
      of e-commerce by over 90% of          70
      participating SMEs                    60
    • High customer expectations and        40
      competition are driving the           30
      development of e-commerce             20
      among SMEs                            10
    • SMEs value the ability to offer



      24-hour/day information, respond
      more quickly to inquiries, and
      gather better market intelligence
      on customers and competitors          Very Important    Somewhat Important

                Customers and Markets

    “E-Commerce provides SMEs with global reach – allowing them to
       reach 100 million people globally rather than just 100,000 Thai
                          people.” - SME, Thailand

        “E-commerce will bring SMEs great opportunities, such as
       shortening cycle periods, reducing labour and inventory costs,
             developing potential new markets, and competing
                   internationally.” - Key Informant, China

     “Our customers must be constantly informed about new product
            lines, discounts and other promotions.” - SME, Peru

                 Focus on International Markets

                                       • Due to domestic market
         Importance of Accessing
                                         limitations, SMEs in lower GNP
           International Markets
                                         economies place more
    80                                   importance on using e-
    70                                   commerce to access export
    60                                   markets
    40                                 • Higher capability firms in all
    30                                   economies see that e-commerce
    20                                   can enable them to develop a
    10                                   presence and compete in
                                         markets that were previously
          Lower GNP      Higher GNP
                                         untapped by SMEs
          Economies       Economies

             Lower Capability Firms
             Higher Capability Firms

                Supply Chain Integration

    50                               • SMEs, particularly those with lower
    45                                 capabilities, did not place as much
    40                                 importance on supply side issues
    35                                 (supplier information exchange,
    30                                 reducing purchasing costs)
    20                               • Experts believe that supply chain
    15                                 integration offers significant
    10                                 opportunities
                                     • SMEs, particularly where purchased
           Supplier      Reduce
                                       materials are an important cost
         Information   Procurement     factor, could benefit from exploring
          Exchange        Costs        supply side e-commerce
           Lower Capability Firms      opportunities before their
           Higher Capability Firms     competitors

                Low Customer Use is a Barrier

                                      • Low customer e-commerce use was
         Concerns About Low             the mostly widely cited limiting factor,
            Customer Use                particularly in lower GNP economies
    60                                • To increase customer use, SMEs
    50                                  want action on:
    40                                  • cost, accessibility and dependability
    30                                    of telecommunications, including
                                          internet service
                                        • payment systems

     0                                  • confidence and trust in e-commerce
         Lower GNP      Higher GNP        transactions
         Economies       Economies      • language and cultural barriers
            Lower Capability Firms
            Higher Capability Firms

                   Confidence and Trust

    • Lack of confidence and trust -
      including security concerns and
      legal issues - was identified as a
      top inhibitor to growth
    • Concerns were stronger in lower      40
      GNP economies                        30
    • Firms with more advanced
      capabilities were less concerned
      about security due to greater
      awareness of appropriate                    Concerns       Legal and
      technologies                              About Security   Liability
    • SMEs value measures to
      develop an appropriate legal                   Somewhat Important
      framework                                      Very Important

                 Confidence and Trust

     “The main risk is that people don’t trust electronic commerce or the
          technical infrastructure to support it.” - Key Informant, Peru

         “I find that the question of security is not so important. The
       problem of credibility, on the other hand, is extremely relevant.” -
                                   SME, Chile

        “Security is frequently cited as a problem, but it is not a real
        problem in Singapore. It’s more of a psychological barrier.” -
                            Key Informant, Singapore

                   E-Business Models & Technology

     • Limited knowledge of e-
       commerce business models and
       technology were cited as
       important inhibitors by 60% of     50
       SMEs                               40
     • Lower awareness levels and lack
       of comfort with technology are     20
       more prevalent in lower GNP        10
       economies                           0
     • SMEs value government                   Knowledge of Knowledge of
       measures to highlight successful          Business    Technology
       models and to lead by example
       (e.g. electronic services,                  Somewhat Important
       electronic procurement)                     Very Important

                E-Business Models & Technology

         “E-commerce will only be successful if there is a successful
       electronic business model. The whole business model may need
                        to change.” - Key Informant, USA

     “A real effort needs to be made to highlight successful e-commerce
                     experiences by SMEs.” - SME, Philippines

       “SMEs who want to develop e-commerce have difficulty finding
           information on success stories.” - Key Informant, Japan

                       Measures to Increase E-Commerce Use

                                                        Very Important Measures for SMEs
 • SMEs, especially in lower GNP
   economies, believe governments                                      Higher GNP   Lower GNP

   have a key role
 • Key measures cited by SMEs:
     • Improve telecommunications                    Telecom Infrastructure

                                                 E-Commerce Legal Barriers
       infrastructure and internet access
                                                   Business Internet Access

     • Create legal framework and                Fair E-Commerce Tax Policy

       institute fair tax policies for e-      National E-Commerce Strategy

                                            Business E-Commerce Awareness
                                            Government Services on Internet

     • Raise business awareness of e-          Government E-Commerce Use

       commerce opportunities and                      E-Commerce Training

                                                  Promote E-Commerce Use
                                                                              0     20          40   60   80
     • Enhance government services on
       the Web and government use of e-
                Factors attracting e-commerce adoption in Singapore

     • There are several benefits that local SMEs would like to derive from
       using e-commerce

         • access to wider customer base locally and internationally
         • increase revenue from sales
         • access to timely information
         • increase speed to market

                Constraints affecting e-commerce adoption in Singapore

     • Many local SMEs would like to realise the benefits of harnessing the
       power of e-commerce but highlighted various concerns

          • start-up and maintenance costs
          • security concerns especially credit card fraud
          • lack of customer sophistication
          • lack of supplier sophistication
          • lack of clarity on legal issues regarding cyber transactions

                  Suggestions for Individual and Collective Action

     • Improve telecommunications infrastructure and Internet access
      • improve access, affordability and dependability of Internet and other
        telecommunications services through liberalization and regulatory
        reform to increase effective competition
      • through APII (Asia Pacific Information Infrastructure programs) and
        other programs develop regional and global infrastructure
      • develop and maintain common standards for e-commerce - facilitate
        an international, voluntary and consensus-based environment for
        standards setting

                  Suggestions for Individual and Collective Action

     • Create legal framework and fair tax policies for e-commerce
      • strengthen the domestic legal framework such as validity and
        enforcement of contracts
      • address security issues, including the authenticity of electronic
        documents and the privacy and confidentiality of personal and
        corporate records
      • address confidence and trust issues in international transactions -
        legal and security issues that are international in nature
      • ensure transactions receive neutral tax treatment relative to non-
        electronic transactions
      • support the development of appropriate electronic payment systems

               Suggestions for Individual and Collective Action

     • Support the development of e-commerce capabilities among
      • raise business awareness of e-commerce opportunities and benefits
        through seminars, workshops or other activities
      • provide training around SME concerns
      • attract and retain venture capital and investment in SMEs with
        potential for rapid growth
     • Make government a model user of e-commerce in government
       procurement and provision of government services


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