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Dimitrios Xanthidis

Lecturer at City Liberal Studies

PhD Research City University London

FRAMEWORK OF E-COMMERCE STRATEGIES

(and the case in Greece)

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Traditional definition of Traditional definition of E-commerceE-commerce

The notion of utilizing devices The notion of utilizing devices constructed, or working by constructed, or working by

principles of electronics for the principles of electronics for the exchange or buying and selling of exchange or buying and selling of

commodities on a large scalecommodities on a large scale

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The DebateThe Debate

The exact process and devices utilized The exact process and devices utilized during that process are irrelevant during that process are irrelevant

and still considered E-commerce as and still considered E-commerce as long as any part of the process long as any part of the process

relates to the technology of Internet.relates to the technology of Internet.

The flow of information is that The flow of information is that matters and that is what E-matters and that is what E-

commerce is all about.commerce is all about.

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Framework of Activities for the strategic planning of the integration of an E-business

1. Building and maintaining the technical Infrastructure

2. Advertising

3. Taking care of the customers – visitors

4. Channel transparency

5. Security, privacy, spam

6. Globalisation and Legal issues

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1. Building & maintaining the 1. Building & maintaining the technical infrastructuretechnical infrastructure

• ISPs’ (Internet Service Provider) ISPs’ (Internet Service Provider) view:view:– Available bandwidthAvailable bandwidth– Internet pricing scheme and ratesInternet pricing scheme and rates– Service stability Service stability

• Company’s perspectiveCompany’s perspective– Processing speed and powerProcessing speed and power– Server efficiency and availabilityServer efficiency and availability– Dedicated expert personnelDedicated expert personnel– Site sophistication and system Site sophistication and system

maintenancemaintenance

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2. Advertising2. Advertising• Affiliate programs – sitesAffiliate programs – sites

– Pay per clickPay per click– Pay per leadPay per lead– Pay per salePay per sale

• StickinessStickiness• Integrated online and offline Integrated online and offline

advertising campaignadvertising campaign• Marketing and product researchMarketing and product research• Buy the intellectual rights (copyrights, Buy the intellectual rights (copyrights,

trademarks) of old and/ or bankrupt trademarks) of old and/ or bankrupt well-known companies with good well-known companies with good reputation reputation

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3. Taking care of the customers – 3. Taking care of the customers – visitorsvisitors

• Internet marketing metrics:Internet marketing metrics:– Number of people responded,Number of people responded,– Number of new vs. repeat visitors,Number of new vs. repeat visitors,– Visitor interest areas,Visitor interest areas,– Media with best clickthrough rate for a particular cost,Media with best clickthrough rate for a particular cost,– Time spent on site,Time spent on site,– Cost vs. benefit analysisCost vs. benefit analysis

• CRM (Customer Relationship Management) CRM (Customer Relationship Management) – Customisation (cookies, customers’ ids),Customisation (cookies, customers’ ids),– Information about product availability and features,Information about product availability and features,– Payment methods,Payment methods,– Availability of different communications media (online, Availability of different communications media (online,

offline)offline)(Jere King, Vice President of WorldWide Marketing Communications, (Jere King, Vice President of WorldWide Marketing Communications,

Cisco Systems)Cisco Systems)

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4. Channel Transparency4. Channel Transparency• Channel transparencyChannel transparency

– Ability/ availability to close sales/ deals Ability/ availability to close sales/ deals online/ offline,online/ offline,

– Processes independent of place, time and Processes independent of place, time and communications media,communications media,

• CollaborationCollaboration– Business deals with other companies,Business deals with other companies,– Sell products through small subsidiaries/ Sell products through small subsidiaries/

chain stores,chain stores,• ConsolidationConsolidation

– Getting together with other companies Getting together with other companies under the same “roof” when neededunder the same “roof” when needed

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5. Security issues and 5. Security issues and technologiestechnologies

• Security concerns: Security concerns: – Privacy/spamPrivacy/spam– Integrity,Integrity,– Authentication,Authentication,– Non-repudiation,Non-repudiation,– Network availability and stabilityNetwork availability and stability

• Methods, techniques and systems to secure Methods, techniques and systems to secure communicationscommunications– Secret-key cryptography, public-key Secret-key cryptography, public-key

cryptography,cryptography,– Digital envelope, digital signatures,Digital envelope, digital signatures,– SSL protocol, SET protocolSSL protocol, SET protocol– Certificates, certification authoritiesCertificates, certification authorities

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5. Security breach incidents from 1998 5. Security breach incidents from 1998 to 2001to 2001

Source: CERN

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6. Globalisation & Legal 6. Globalisation & Legal IssuesIssues

• What is globalisationWhat is globalisation• Globalisation issuesGlobalisation issues

– Languages,Languages,– Politics,Politics,– Colors,Colors,– WordingWording

• Import – export issuesImport – export issues• TaxationTaxation• International trade lawInternational trade law

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Internet and E-commerce in Internet and E-commerce in GreeceGreece

• Total population about 10,500,000 peopleTotal population about 10,500,000 people• Average personal income in Greece is $11,740Average personal income in Greece is $11,740• Standard of living at 67% of E.U. average Standard of living at 67% of E.U. average

(January 2001)(January 2001)• Online population:Online population:

– 33% of the population are simply computer users33% of the population are simply computer users– 800,000 Internet users by the end of 2000800,000 Internet users by the end of 2000– 1,330,000 Internet users by the end of 20011,330,000 Internet users by the end of 2001– 2,000,000 Internet users by the end of 2002 (Ministry of 2,000,000 Internet users by the end of 2002 (Ministry of

Economics)Economics)– Projection of at least 3,500,000 users by the end of 2004 Projection of at least 3,500,000 users by the end of 2004

as a result of Greek government’s initiatives and the as a result of Greek government’s initiatives and the Olympic GamesOlympic Games

• 19% of Internet penetration 19% of Internet penetration Source: The Economist Intelligence Unit, (Source: The Economist Intelligence Unit, (

www.eiu.comwww.eiu.com) )

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Internet and E-commerce in Internet and E-commerce in Greece (cont.)Greece (cont.)

• Ages between 15 and 24 are using computers and Ages between 15 and 24 are using computers and the Internet the most the Internet the most

• Average use of computers/week is 14.2 hours, Average use of computers/week is 14.2 hours, average usage of the Internet/week is 6.3 hoursaverage usage of the Internet/week is 6.3 hours

• 20% uses the Internet for communication purposes 20% uses the Internet for communication purposes i.e. email, chat, 20% to search for products or i.e. email, chat, 20% to search for products or services (not to buy), 13% for entertainment or to services (not to buy), 13% for entertainment or to be informed, and only 1.6% uses it for e-commerce be informed, and only 1.6% uses it for e-commerce or e-banking or e-taxiing activities, or e-banking or e-taxiing activities,

• 60% rejects the use of the Internet,60% rejects the use of the Internet,• 78.4% is connected with a dial-up connection, 19.4% 78.4% is connected with a dial-up connection, 19.4%

with some type of ISDN connection and only 0.7% with some type of ISDN connection and only 0.7% are using ADSLare using ADSL

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Internet and E-commerce in Internet and E-commerce in Greece (cont.)Greece (cont.)

• 29% Greek companies with even basic 29% Greek companies with even basic web sites vs. 46% of the average in E.U. web sites vs. 46% of the average in E.U.

• 6% Greek business transactions done 6% Greek business transactions done through the Internet vs. 19 percent of through the Internet vs. 19 percent of selling and 26 percent of buying in the selling and 26 percent of buying in the E.U.E.U.

• No planning and cost vs. benefit analysis No planning and cost vs. benefit analysis • No human resources assigned to the No human resources assigned to the

task of taking care of, maintaining and task of taking care of, maintaining and responding to the activities through responding to the activities through their Web sitestheir Web sites

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Categorization of Countries based Categorization of Countries based on the penetration of Internet in on the penetration of Internet in

their populationtheir population• Total world population about 6,200 million Total world population about 6,200 million

people (people (www.global-reach.biz/globstatswww.global-reach.biz/globstats)) • 560 million Internet users around the world, only 560 million Internet users around the world, only

less than 10%less than 10% • Countries could be divided into four categories:Countries could be divided into four categories:

– Category 1:Category 1: high Internet penetration > 40% high Internet penetration > 40% – Category 2:Category 2: high projected growth, now > 10% high projected growth, now > 10%

online online – Category 3:Category 3: low Internet penetration, high low Internet penetration, high

potential potential – Category 4:Category 4: no significant Internet penetration no significant Internet penetration

and no expectations for the foreseeable future.and no expectations for the foreseeable future.

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Categories and CountriesCategories and Countries• Category 1:Category 1: Singapore, Hong Kong, Canada, Sweden, Singapore, Hong Kong, Canada, Sweden,

U.S.U.S., Denmark, Netherlands, Australia, Norway, New , Denmark, Netherlands, Australia, Norway, New Zealand, Zealand, U.K.U.K., South Korea, Finland, Switzerland, , South Korea, Finland, Switzerland, Austria, JapanAustria, Japan

• Category 2:Category 2: GermanyGermany, Portugal, Ireland, Israel, , Portugal, Ireland, Israel, Belgium, Belgium, ItalyItaly, Slovenia Rep., U.A.E., , Slovenia Rep., U.A.E., FranceFrance, , SpainSpain, , Estonia Rep., Czech Rep., Malaysia, Poland Rep., Estonia Rep., Czech Rep., Malaysia, Poland Rep., Panama, Slovak Rep., Panama, Slovak Rep., GreeceGreece, Chile, Hungary, Kuwait. , Chile, Hungary, Kuwait.

• Category 3:Category 3: Uruguay, Latvia Rep., Lebanon, Uruguay, Latvia Rep., Lebanon, Russian Russian Fed.Fed., Mexico, Argentina, , Mexico, Argentina, BrazilBrazil, Bulgaria, Lithuania, , Bulgaria, Lithuania, TurkeyTurkey, Puerto Rico, Croatia, South Africa, Costa Rica, , Puerto Rico, Croatia, South Africa, Costa Rica, Venezuela, Thailand, Venezuela, Thailand, ChinaChina, Oman, Romania, Saudi , Oman, Romania, Saudi Arabia, Tunisia, Philippines, Yugoslavia, Iran, Jordan, Arabia, Tunisia, Philippines, Yugoslavia, Iran, Jordan, Bolivia, Ukraine, Indonesia.Bolivia, Ukraine, Indonesia.

• Category 4:Category 4: many South American, several East Asian, many South American, several East Asian, African (below Sahara desert), most of Arab nations, African (below Sahara desert), most of Arab nations, etc.etc.

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Total Population Share of Four Categories

2.900.000; 47%

2.329.243; 37%

384.555; 6%

627.478; 10%

Category 1 Category 2 Category 3 Category 4 Total Online Population Share of Four Categories

8.694; 2%

95.910; 17%

110.038; 19%

356.836; 62%

Category 1 Category 2 Category 3 Category 4

Total Population vs. Total Online Population shares of the Countries from the four categories

Countries of Categories 1 & 2 (U.S.A., Europe, Far East Asia, Australia and a few others) <20% of the total world population but >80% of the Internet worldwide

•Countries of Category 3 (like China) are growing fast in Internet penetration.

•Countries of Category 4 (like most Arab nations, and Sub-Saharan African countries are not developing)

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Reasons explaining the irregular Reasons explaining the irregular spreading of the Internet and E-spreading of the Internet and E-

commerce technology around the Globecommerce technology around the Globe• Personal IncomePersonal Income• EducationEducation• Technological InfrastructureTechnological Infrastructure• Economic motivationEconomic motivation• Political stabilityPolitical stability• Social (and/ or religious) acceptanceSocial (and/ or religious) acceptance• Existence of Legal framework Existence of Legal framework

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Difficulties in Measuring E-commerce Difficulties in Measuring E-commerce Growth Growth

(or shrinking)(or shrinking)1.1.No real business data proving either growth or No real business data proving either growth or

downturn,downturn,2.2.Laying off employees. What does it mean?Laying off employees. What does it mean?3.3.Jobs are added in fields related to e-commerce, Jobs are added in fields related to e-commerce, 4.4.Dot-coms are out and Dot-coms are out and EE-commerce is in; no more -commerce is in; no more

startups, pure virtual dot-coms, startups, pure virtual dot-coms, 5.5.Analysts measure E-Commerce growth in times of Analysts measure E-Commerce growth in times of

economic slowdown and still the outcome of their economic slowdown and still the outcome of their results is positive,results is positive,

6.6.Bad business practices, misleading, Bad business practices, misleading, miscalculations,miscalculations,

7.7.There is still a lot of uncovered territory,There is still a lot of uncovered territory,8.8.A huge population of Internet users still stays A huge population of Internet users still stays

away from buying online.away from buying online.

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Projections of Worldwide eCommerce Projections of Worldwide eCommerce Growth ($B)Growth ($B)

20002000 20012001 20022002 20032003 20042004

% of total% of totalsales in sales in

20042004

North North AmericaAmerica 509,3509,3 908,6908,6

1.498,1.498,22

2.339,2.339,00

3.456,3.456,44 50,9%50,9%

Asia PacificAsia Pacific 53,753,7 117,2117,2 286,6286,6 724,2724,21.649,1.649,

88 24,3%24,3%

Western Western EuropeEurope 87,487,4 194,8194,8 422,1422,1 853,3853,3

1.533,1.533,22 22,6%22,6%

Latin Latin AmericaAmerica 3,63,6 6,86,8 13,713,7 31,831,8 81,881,8 1,2%1,2%

OtherOther 3,03,0 6,26,2 10,610,6 31,431,4 68,668,6 1,0%1,0%

Total ($B)Total ($B) 657,0657,01.233,1.233,

662.231,2.231,

223.979,3.979,

776.789,6.789,

88 100,0%100,0%

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Conclusion and Projections Conclusion and Projections about E-commerceabout E-commerce

• E-Commerce is growing up,E-Commerce is growing up,• The statistics underestimate the effect of The statistics underestimate the effect of

e-commerce to the overall business of a e-commerce to the overall business of a retail company, retail company,

• E-Commerce will continue to grow as e-E-Commerce will continue to grow as e-businesses adopt new ways of doing businesses adopt new ways of doing business more efficiently using the business more efficiently using the Internet.Internet.

• E-Commerce will continue to grow as new E-Commerce will continue to grow as new market sectors enter the digital worldmarket sectors enter the digital world

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Useful LinksUseful Links

• www.ecommercetimes.comwww.ecommercetimes.com• www.eiu.comwww.eiu.com• http://Btobonline.comhttp://Btobonline.com• www.ypan.grwww.ypan.gr• www.forthnet.grwww.forthnet.gr• www.hostmaster.grwww.hostmaster.gr• www.ypetho.gr/ypourgeio/ereuna_ktp_200www.ypetho.gr/ypourgeio/ereuna_ktp_200

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