On-line lag real cost to local industry

AT THE recent Online Australia national conference in the Barossa Valley, Visa International director of e-commerce Asia Pacific Jeff Pearlman presented a powerful wake-up call to Australian businesses.

He pointed out that the estimated level of trade on the Internet in Australia for 1998-99 was $500m – a figure we have seen before and which is expected to grow to around $5 billion by 2002-03.

These figures alone are not exactly cause for alarm. However, what is real wake-up stuff is that Visa estimates 83 per cent of all goods currently being purchased on the net are purchased from merchants in the US.

Australian citizens on-line can’t and won’t buy Australian if our merchants are not in cyberspace. It is as simple as that.

If this trend is repeated in 100 other countries, herein lies yet another explanation for the long running boom in the US economy.

Ignorance of the medium, fear of not being able to compete and fear of losing market share to US companies have been some of the most frequently advanced excuses by Australian businesses for not embracing e-commerce.

Pearlman pointed out that, in the national interest, this is a trend we must arrest and reverse.

It is very easy these days to feel that we are awash with statistics reporting the state of play with the online economy.

However, because the whole phenomenon is evolving with such dramatic speed it is worth keeping an eye on the data from time to time.

In its recent report Use of the Internet by Householders, the Australian Bureau of Statistics concludes:

• 1.27 million households were online as at November 1998 – a jump of almost 50 per cent in 12 months, giving 4.2 million adults access to the net

• In November 1998, approximately 22 per cent of households in Australian capital cities had access to the net whereas only 14 per cent outside capital cities had access

• The level of personal income is an important determining factor. Almost 60 per cent of people with incomes greater than $46,000 had accessed the net. This drops to 30 per cent and 20 per cent respectively for people with incomes below $23,000 and $12,000

• Younger age groups represent the greatest proportion of Internet users. Approximately 62 per cent of 18 to 24 year olds regularly accessed the net. This figure drops to 29 per cent for 40 to 54 year olds and 7 per cent for over 55s.

• Of adults with net access, only 7 per cent used it for commerce. Less than 1 per cent used the net to pay bills or transfer funds

• Those who used e-commerce were relatively confident buyers, with 44 per cent having made a purchase in the past six weeks and 83 per cent of them making payments online. About 36 per cent of purchases cost less than $250, while a third cost more than $500.

Clearly, e-commerce involving business to consumer transactions on the Internet is making slow progress in Australia. Until now, big business and big government have driven e-commerce. Now a million Australian small businesses are facing decisions about where, when and how they will enter the new paradigm.

• Mal Bryce is chairman of Dow Digital and a former WA Deputy Premier.

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