beyond pt 0 23/1

8.6 External dimensions
Transfer of value overseas is a danger for Australian retailers, particularly
for non-perishable items, and for luxury or unusual items that are not
readily available in Australia.
Many of the online shopping sites will not be based in Australia, which
may increase the amount of goods and services purchased from overseas.
It is estimated that Australia will have approximately 40 000 active
Internet trading sites by mid-2000. While…
Fifty six per cent of US companies will sell their products online by 2000, up
from 24 per cent in 1998, according to a survey by the Financial Executives
Institute and Duke University. The report estimates that online business will
account for an average of eight per cent of a company’s total revenue. In 1998
online sales represented five per cent of overall revenue.
The study calculated that in 1998, high-tech firms generated 6.5 per cent of their
total revenue from online sales. This is expected to increase to 11.1 per cent by
next year. In contrast, communications and media companies will generate
6 per cent of their revenue from the Net in 2000, while businesses in the Pacific
region will generate 7.5 per cent of their business from online sales.
The companies surveyed also expect to increase their online spending, with two
thirds expecting to buy online in 2000, double the figure that purchased online
in 1998. The survey found that, on average, executives expect their companies to
make 7.9 per cent of their supply purchases online. High-tech companies expect
to make 10.2 per cent of such purchases online.
The findings of the Financial Executives Institute/Duke University Corporate
Outlook Survey are based on a survey of 371 US companies, taken from a base of
3 000 US companies. It was conducted during the week of March 15, 1999.
Nua Internet Surveys: April 12 1999
http://www.duke.edu/~jgraham/fei.html
Tax regimes can also affect the price of purchases, which may make
an item cheaper to purchase offshore, even if the cost of transport
is included.
While Australian retailing faces the challenge of keeping Australian
consumers shopping locally, the also face the opportunity of attracting
new customers from overseas. Sales to overseas customers could be made
directly from the manufacturer, or via a retailer—whoever has the site
and the delivery process.
Gary Jackson believes that Australia has the ability to encourage infrastructure
development, and would like to see more encouragement for overseas
organisations ordering Australian products directly (e.g. wine) and less worrying
about Australians ordering products from overseas. Government could assist this
by supporting promotional activities especially overseas, and perhaps in website
establishment. There should be a drive to assist companies to develop their own
Internet sales sites locally, instead of shipping to overseas distributors, that is to
disintermediate the delivery process. The Internet can be the greatest enabler to
overcoming the ‘tyranny of distance’ that Australia has experienced. Goods can be
shipped worldwide cost effectively.
One example of such as site is www.portdouglas.com.au, which manages
18 properties in the Port Douglas area, but needs time and money to further
develop the website and to promote it overseas. Sites such as this can assist
tourism and drive online bookings. Real estate sites could make it easier to invest
in Australian property. In addition to wine, Australian has many foods, such as
wine and cheese which could be sold directly over the Internet.
Interview: Gary Jackson, Cisco,
IRG member, 20 July 1999
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