Let's start with the basics. What is e-commerce all about?
Steve Young: It's the use of the Internet or other networks to actually further business objectives. Many companies now are using the Internet just for public relations purposes: having their name out there, a statement from the chairman of the company etc. Perhaps that is useful, but it really does not further the fundamental goals of the company, which is to increase their sales or work more efficiently in the business environment.
Can you finalise deals on the net?
Young: You certainly can. There is a lot of business being done totally electronically: the contact, the negotiation and even the payment. There are a lot of situations where contact and the deal are made electronically, but the payment is a regular cheque.
Currently, there are only 30,000 Int-ernet users in India. There are a lot of infrastructural bottlenecks. Do you think we'll be capable of handling e-commerce, even by 2001?
Young: The infrastructure won't mature by 2001, but it will be advanced. We can see all countries following a path. Maybe the US or Singapore is taking the lead, and other countries are a few years behind. Maybe some other countries are ahead of India, but I think India will follow a similar path.
Have you logged in from India?
Kapi Attawar: Yes, I have.
So you know the problems here.
Attawar: Yes, but China is the same as India in this respect. India is going to grow massively in terms of Internet users. One of the reasons, as Steve suggested, is that you don't have to complete the transaction on the Net to actually do electronic business. So Indian e-commerce will grow. And you've got certain other drivers like stock exchanges stipulating that all transactions are to be done electronically by the end of next year. These drivers will force the issue.
There are some outside drivers as well. Most manufacturers from the US have already told their Asian suppliers that if you can't do business on the Net, then forget it. I was talking to a couple of suppliers in Chennai and they are scared. They don't know what to do. When I order my components from you in India, I will order them using my ordering system. If you have a different ordering system then that's your problem because it's too expensive for me to order them manually. You're actually adding to the cost of your product, so I'm not going to buy from you.
Young: I think there is also a growing realisation that the Internet benefits young,aggressive growth economies much more than they can benefit existing large ones. And as companies begin to appreciate that, the demand will increase. The reason I say that is because today if the company wants to buy something, they're going to buy it from the name they know, the company that they have always dealt with.
But once they start looking at the Internet, even if they intend to go to that big name company they know, the Internet will often present them with alternatives even if they did not ask for them. And if they are really good alternatives, then it represents a real way for young, aggressive companies to make their story known.
Young: This is something you call the democratising effect of the Web. It sort of levels the playing field. It takes away what would otherwise be an advantage of the older established companies. For instance, I bought this palmtop computer a year ago and I wanted a nice leather case for it. On the Internet I saw this guy advertising for custom-made leather cases. He had a regular job and in his spare time he did this. As a result of putting his product on the Net, he has now given up his regular job and he and his wife are doing this on a full-time basis. This is only a small example, but the point is: without the Internet how could it have been possible for such a narrow niche product to get worldwide distribution? This sort of technology can enable that small business to gain market where otherwise it would be quite impossible. With these technologies, they can.
Attawar: I've just bought a house in the US and I'm looking for furniture. I want either Thai, Chinese or Indian furniture because buying it in the US is really expensive. But I haven't found anything on the Web. So, it's an opportunity for somebody.
To bring you back to the infrastructural bottlenecks, it's very difficult to get a good connection here.
Young: You must realise that it may be better in some other places, but no matter how good it is, people complain as loudly as you. The demand is always increasing and it's difficult to keep up. And I don't think you should look for a time when everything will be perfect and then start using e-commerce because that will never happen. There will always be bottlenecks. You have to look for a time when it's just good enough, not perfect.
Attawar: It's a question of attitude. If you have an attitude which says it's never really good enough, you'll never really do it. If people want it to happen, it will happen. What I've noticed is a vast change from when I was here four months ago. Everyone is now saying that we know it's not perfect today but we hope a year from now it will. You've got to be ready for that.
Young: You have 30,000 users which will work up to much more if you consider the users who access from their offices. So you've got a sizeable community that is going to be available as a customer base.
Attawar: So even if the infrastructure is bad, the drivers are in place and there will be no option but to be on the Net. There is this small bank in Malaysia for which HP has done the set-up. The subscriber base of the bank is about 30,000 of which 80 per cent of the subscribers log in from their offices. Therefore the number of Internet users is generally underestimated.
Young: There is a wine company, Virtual Vineyards, which is seeing its business increase by 15 per cent a month! They didn't say: "We'll sell all alcoholic drinks or even all wines." They're selling gourmet wine, which is only available from small vineyards. That's the way small businesses grow. Find the niche and put it on the Net.
Attawar: So the Internet will not be an option anymore. If governments don't do it, then big companies will create their own infrastructure. Like Visa and MasterCard have done. There will be intranets between companies having common interests.