Asian tigers the target of IT gurus - Asia's economic condition - Brief Article

Business Asia, Dec 13, 1999 by Randolph Ramsay, Paula M.C. Swatman

E-commerce Is THE big news In global markets -- and the West sees potentially huge profits In Asian markets

The world will turn to Asia in search of dot com investments in 2000 as regional Internet use rises and Western markets become saturated, analysts predict.

However, many Asian companies will lag behind the West in terms of e-business take-up next year because of a reluctance to embrace new processes.

Merrill Lynch assistant vice-president and regional analyst Matei Mihalca says good e-commerce developments are emerging in Asia for business-to-consumer and business-to-business activities.

"People are turning to places outside the United States because you see more Internet users now internationally than are in the US," he said. "The same thing is happening, interestingly enough, with large Internet companies such as Yahoo and AOL, who are looking at opportunities overseas and looking at Asia.

"The eyes of the world are very much on less-penetrated, high-growth places like Asia."

Despite several promising start-ups in Asia, Pricewaterhouse-Coopers Asia-Pacific e-business chairman for financial services Kenneth Docter says many regional company bosses have no "gameplan" for tackling the e-business revolution.

By adopting a "wait-and-see attitude", they may fall further behind the West.

"More and more businesses are putting up a web page to advertise, but they're not going to the next step yet," he said.

"It (the level of development) is not uniform across Asia, but if I were to make a generalisation, it would be that the northern Asia area is a little slower on the uptake than the southern region."

Docter predicts Asia's financial sector, including brokerage companies and insurers, will soon be forced to adopt e-business strategies.

Asia produced the tiger economies of the late 1980s and early 1990s and they hope to pounce again -- this time in e-commerce.

South Korea is one market that is showing impressive growth, with its Internet population forecast to reach 16 million by December 2003.

The Korean Internet market is currently worth 60 billion Korean won (about A$85 million) and the Korean Internet Marketing Centre suggests this will continue to grow by 200 per cent a year for at least the next four years.

Cyber trading in Korea accounted for just over 22 per cent of all stock trades in July 1999, making it the second most active cyber-trading nation in the world after the United States.

The US remains the world's dominant information economy, but recent studies show that a number of Asian nations, including Singapore, are moving more quickly to develop on-line power than traditional industrial countries such as the United Kingdom, France and Japan.

While Internet commerce software products are being sourced from overseas, there is a growing trend for web pages to be produced in the national language and to contain local content.

On-line shoppers are steadily turning away from foreign web sites where there is a local company offering the same (or a similar) product.

KOREA'S INTERNET POPULATION

Dec 1994      138,000
Dec 1995      366,000
Dec 1996      731,000
Dec 1997    1,634,000
Dec 1998    3,103,000
Dec 1999    5,200,000
Dec 2003   16,000,000
   (predicted figure)

(Source: Korean Ministry of Information and Communication)

(*) Randolph Ramsay is a journalist for Business Asia. Paula M.C. Swatman is a professor of electronic commerce at RMIT Business in Melbourne.