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E-commerce tipped to embrace 30% of NZ business

E-commerce tipped to embrace 30% of NZ business within three years

New Zealand corporate and government IT directors expect revenues from e-commerce to approach 30% of total business revenues within three years and e-commerce transaction volumes to reach 35%. But despite that they rate their organisations behind the eight-ball in comparison with international competitors.

That result from Fairfax’s Strategic Research in its latest MIS MarketTrends 2000 survey of New Zealand’s IT leaders.

Despite crashes and an apparent failure in the business to consumer or e-tailing space, corporate organisations continue to back e-commerce projects as a core competitive differentiator and the key to increased market share and efficiency.

While revenue and transaction volume expectations over the next three years are high, the take-off in local e-commerce won’t happen immediately or evenly.

“Respondents predict only marginal increases in e-commerce revenues and transcations over the next year,” says Strategic’s New Zealand analyst Rob O ’Neill. “Early indications from the research show a large number of e-commerce-related projects under way, especially in the development of secure intranets as an enabler of business-to-business transactions.”

New Zealand IT managers are even more bullish on e-colmmerce than their Australian counterparts. In Australia it is expected that in two years 21% of transactions and 31% of revenues will be derived from e-commerce systems.

Notable in both results is the difference between expectations in transaction numbers and revenue - a clear indicator that e-commerce systems are geared for the delivery of more commoditised products and services rather than highly value-added differentiated products and services.

Indeed,as has been claimed, e-commerce capabilities can in many instances act as a driver of commoditisation through its ability to admit new competitors to markets dominated by incumbents.

Y2K appears to have posed a significant barrier to e-commerce development. New Zealand IT managers, as with their Australian counterparts, clearly rate their e-commerce efforts to date as behind global best practice.

“In total 65% of organisations in the survey rated themselves behind the e-commerce eight-ball, while only 7.9% rated themselves ahead,” O’Neill says.

In total 111 organisations, across a broad range of industries, responded to the MIS MarketTrends 2000 report in New Zealand.

Contact: Rob O’Neill Research Analyst Strategic Research +09 379 3880

Strategic Research is a division of Strategic Publishing Group, a Fairfax company, which publishes MIS Magazine, CFO, the marketing magazine P4+ and MISWeb. Strategic Research launched its demand-side MIS MarketTrends research in 1993. It was subsequently sold to the Gartner Group and reacquired in April 1999. In addition to the MIS MarketTrends research in the Asia Pacific region, Strategic Research also provides MarketBase enterprise user databases in 13 countries.

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