Press Releases
SINGAPORE, June 29, 1999 - Federal Express Corp. (FedEx), the world's
largest express transportation company, today outlined five business
trends that would determine the future of electronic commerce over
the next few years.
These include the development of virtual communities, global e-commerce
growth, increased importance of customer service functions and the
migration of small and medium sized enterprises to e-commerce as
well as the increase in price and information competitiveness.
These five trends will directly impact business and consumer groups,
whether they realize it or not, said David Smith, FedEx's Director
for Strategy and Alliances, Electronic Commerce and Customer Service,
Asia Pacific. The key to success for any business will be determined
by how each company responds to this changing business environment.
Global E-commerce Growth
According to the Gartner Group, global e-commerce will exceed
US$1.2 trillion by 2002. "Conducting commerce electronically will
be standard business protocol for companies of all sizes. In fact,
the ability for companies to adopt the Internet will be the most
important key to success in the global economy," said Dr. Smith.
The Internet, by its very nature, has removed barriers between
countries, which means that in today's business environment "going
global" has become a necessity for business survival. Putting it
in perspective, Dr. Smith explained that "English-speaking countries
represent only 30 per cent of the world's economy and eight per
cent of the world's population." Companies that continue to target
only this small fraction of the world market will miss out on a
larger potential market, he said.
Development of Virtual Communities
"Virtual communities, or groupings of individuals and organizations
with common interests in web-based platforms will become a major
business model for the future. Businesses operating inefficiently
will rely on the Internet to tie buyers and seller together to cut
costs out of doing business. The key to this is the open sharing
of information, which can lead to greater efficiencies in the value
chain which can be passed on to the consumer," he added.
FedEx also believes that in the new world of e-commerce, the true
importance of effective customer service will be realized.
"The Internet creates a market space that breeds high service expectations.
Customers can purchase at their convenience, from any location,
at any time, instantly, and they expect the same level of customer
service," said Dr. Smith.
Added to this focus on customer service will be focus on customer
relationship management, which will help position organizations
to anticipate customer demands and offer customized service levels.
Migration of Small and Medium-sized enterprises (SMEs) to E-commerce
E-commerce, said Dr. Smith, is no longer an experimental market
place. "It is now an accepted method of doing business for both
the large corporations as well as the SMEs." As a result, we will
see more SMEs' embracing electronic commerce. These smaller companies
will realize that they can enjoy the benefits of electronic commerce
that provide greater choice and information to their customers."
This provides an opportunity for business enablers to develop solutions
specifically targeted at this marketplace. For example, FedEx has
developed several solutions such as Virtual Order Plus and Global
Inventory Visibility Systems (GIVS). Virtual Order Plus provides
an Internet-based storefront seamlessly integrated with payment
mechanisms, while GIVS provides Internet-based access to inventory
anywhere in the world.
Increase in price and information competitiveness
"The impact of prices and information competitiveness cannot be
over-estimated." stressed Dr. Smith. He explained that e-commerce
provides consumers with greater access to information than ever
before. The more information a company can provide about product
cost and price, the better a customer can make a decision based
on the value of the services being provided by the seller. As a
result, opportunities for companies to utilize information as a
means to differentiate oneself in the marketplace will continue
to grow. "Organizations will have to become information providers
to be able to enjoy a competitive advantage," he said.
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