E-Commerce

E-Commerce

Jui Chao Shih-hao Hsieh Ryan Fedyk Tom Turner 10/30/2007 1 Session Objective Introduce the concept of e-commerce Importance of online growth and worldwide usage Taiwans e-commerce and unique ecommerce businesses Large market of online gambling and legal issues Taiwans e-government The future of e-commerce 10/30/2007

2 Electronic Commerce E-Commerce consists of the buying and selling of products or services over electronic systems such as the internet or other electronic systems. Source: Wikipedia, http://en.wikipedia.org/wiki/E_commerce 10/30/2007 3 Three Types of e-commerce Business-to-Business - the buying and selling of goods and services

between companies online or by means of other electronic systems Business-to-Consumer Customers-to Customers - ebay Source: Pan Western e-business team . http://www.e-future.ca/sask/pdf/b2b_basics.pdf 10/30/2007 4 10/30/2007 5 Source: Internet World Stats, June 2007 10/30/2007 6

Source: Internet World Stats, June 2007 10/30/2007 7 Introduction to Taiwan Also Known As: Ilha Formosa, the beautiful island. Area :35,980 square kilometers Population: 22.7 million Capital : Taipei City Language : Mandarin (official), Taiwanese, and Hakka. Religion : Buddhism/Taoism/Christianity/Islam 10/30/2007 8

Taiwan E-Readiness Items Penetration Rate Internet Population 65.97% Broadband Users 59.93% Internet Households 73.39% Broadband Households

64.81% Mobile Phone 99% Cable TV 84.60% Remarks: 1. Total population: 22.73 million (22,730,819) 2. Total households: 7.2 million (7245047) Source: (2006 January) 1. Taiwan Network Information Center 2. Ministry of Transportation and Communications 3. Ministry of Interior 10/30/2007

9 Penetration Rate US VS. Taiwan 80.0% 69.7% 65.97% 60.0% 64.81% 42.0% 40.0%

US Taiwan 20.0% 0.0% Internet Population 10/30/2007 Broadband Households Sources:PEW pew /internet http://www.pewinternet.org 10 E-commerce Status in Taiwan 53.1% 57%

58.9% USD Million *Currency Rate: 33 NTD = 1 USD Source: Tamkang University http://www.lib.tku.edu.tw/esource/webtopic/BusinessClass/ImformationMannage/ reports/Inf_reportslist.html 10/30/2007 11 Unique E-Commerce in Taiwan 1. Fortune-Teller Name http://clickfate.com.tw/namefate/namefate251.shtml Birthday http://mindcity.sina.com.tw/east/MC-ziwai/index.shtml

Feng-Shui ( ) http://www.e-rent.com.tw/fengshui/ 10/30/2007 12 10/30/2007 13 Fortune-Teller(Cont.) Constellation http://mindcity.sina.com.tw/index.shtml The book of Changes( ) http://iching.shoppy.cc/ Horoscope

http://star.pchome.com.tw/ The Five Elements & The Eight Diagrams http://www.czu168.idv.tw/ 10/30/2007 14 Unique E-Commerce in Taiwan 2. On-line Worship Buddhism http://areyo.virtualave.net/cgi-bin/light/lightindexd.htm http://web.thu.edu.tw/chiu/www/bpray/pray.htm Taoism http://www.intellect.com.tw/temple/

Confucianism http://www.tccg.gov.tw/sys/SM_theme?page=455019ae http://www.tccg.gov.tw/confucian/Chinese/a15.htm 10/30/2007 15 Higher Traffic Constellation Horoscope 10/30/2007 16 Lower Traffic Feng-Shui

The book of Changes 10/30/2007 17 Other Interesting E-commerce Businesses M-commerce Second Life Online Gambling 10/30/2007 18

Mobile Commerce Mobile spending will pass the $500 million mark in 2008 Sprint users spend an average of $9.75 on non-voice services such as downloadable music, ring tones, TV shows, maps, and directions mShopper use your cell phone to buy any product by giving product info and customer info I-Phone, Blackberry Source: e-Commerce Times. http://www.ecommercetimes.com/story/59330.html 10/30/2007 19 10/30/2007

20 2nd Life Reportedly over 1 Million residents Residents can explore, meet other residents, socialize, participate in individual and group activities, create and trade items (virtual property) and services from one another. Virtual currency is the Linden Dollar and is exchangeable for US Dollars 10/30/2007 Source: http://many.corante.com/archives/2006/12/26 21

Get a First Life 10/30/2007 22 Online Gambling Estimates and Projections Source: www.cca-i.com/Primary%20Navigation/Online%20Data%20Store/internet_gambling_data.htm 10/30/2007 23 Casinos Online Brick and Mortar

Vs. Brick and Mortar have difficulty profiting from poker: -Opportunity costs by not using space for slot machines. Adding another online table doesnt take up space. Low stakes available online attract beginners Source: http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/article705968.ece 10/30/2007 24 2006: Unlawful Internet Gambling Act Bans American banks and credit card companies from completing transactions with Internet gambling companies

Slipped in as rider bill to unrelated Safe Port Act went unread by Senate. Source: http://www.casinocitytimes.com/news/article.cfm?contentID=161764 10/30/2007 25 Sen. Bill Frist Thinks AIDS can be transferred through sweat and tears. 10/30/2007 26 Casino Lobbyists $25 Million spent in donations

to politicians from gambling industry to ban online betting. Online companies responded with $1.3 Million in lobbying efforts the first half of 2007 in support of new legislation. Source: http://www.casinogamblingweb.com/gambling-news/gambling-law 10/30/2007 27 Fallout 6 out of top 10 online casinos stopped accepting US customers 888 stock dropped over 50% following bills passing

PartyGaming(PartyPoker) dropped 60% in the first 24 hours and 75% overall 10/30/2007 Source: http://business.guardian.co.uk/story/0,,1891049,00.html 28 Legal Impact Is poker a game of chance? Poker sites/Third party providers offshore - not necessarily subject to US regulations. Will FTC enforce regulations? How does law affect

Affiliates(advertising) and Search Engines? Source: http://www.gamblingandthelaw.com/columns/2006_act.htm 10/30/2007 29 The Real Impact US players still play(legal or not). Companies, not gamblers, feel the effects. Companies use Third Party offshore money transfer accounts to subvert new law. -Similar to Paypal and Neteller, only offshore. 10/30/2007 30

2007 Legislation/News Skill Game Protection Act - would legalize Internet poker, bridge, chess, and other games of skill. Has 35 co-sponsors. Internet Gambling Tax Act - would legislate Internet gambling tax collection requirements. US goes against a 1994 World Trade Organization agreement by not allowing offshore gambling websites to serve US customers. WTO recently ruled against the US, saying they must comply or pay compensation. 10/30/2007 Source: http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.2610: http://en.wikipedia.org/wiki/Online_poker

31 Definition of e-Government e-Government refers to governments use of information technology to exchange information and services with citizens, businesses, and other arms of government. 10/30/2007 Source: wikipedia at http://en.wikipedia.org/wiki/E-government 32 E-Government Ranking by Countries Survey Based on the followings 1. 2. 3.

4. 5. 6. 7. 10/30/2007 Online Information Electronic Services Privacy & Security Disability Access Foreign Language Access Ads, Users Fees, and Premium Fees Public Outreach 33 Main Reasons for Using E-Government

Ranking Searching for Information 88.3% Downloading Forms 65.9% Ranking Viewing Real-time Images of Taiwan's Scenic Places 37.2% Expressing Opinions or Complaints 0.0%

22.1% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

100.0% 10/30/2007 Source: e-Usage at http://www.find.org.tw/eng/news.asp?msgid=290&subjectid=4&pos=0 34 Current Strategies for e-Government Increasing Outsourcing Advancing towards Mobile Internet Services Adopting Web Service Platform e-Government

Expanding Service Value 10/30/2007 Promoting Open Standards 35 Why Use Outsourcing? Use private sector resources to accelerate e- Government development Bring in external expertise 10/30/2007 36

Five Outsourcing Models Share-in-saving: Self-funded: Self-funded-hybrid: Operation outsourcing: Application-service-provider (ASP): 10/30/2007 37 Investment in e-Government From 2003 to 2006. Taiwan government has invested US$ 370 million in eGovernment Project Averagely spent US$92.5 million per year on e-Government Project e-government investment as % of 2006 GDP

0.103% USD 359,363 Millions 2006 GDP egovernment investment as % of GDP I USD=33 NTD 10/30/2007 Source: e-government progress in Taiwan Report to CIA 40th conference http://www.zujee.com/data/SiWanLiNian-GDPTaiwan-Annual-GDP1980-2006.htm 38 Centralized e-Government Entry Site

10/30/2007 http://english.www.gov.tw/e-Gov/index.jsp 39 Administrative Applications 1. Online Vehicle Oversight Service Payment of traffic fines System Payment of auto fuel taxes Reporting of stolen motorcycles Reporting of change of motor vehicle ownership or address 10/30/2007

Source: Research, Development and Evaluation Commission http://www.redc.gov.tw 40 Administrative Applications 2. Pay your income tax online Research, Development, and Evaluation Commission The Progress of Online Income Tax Filing In 2006, 45.31% of 4.92 million taxpayers filed individual income tax via the Internet, and 15.58% of them used electronic certificates. 50% 45.31% 40%

34.59% 30% 20% 10% 0% 10/30/2007 21.06% 14.46% 0.20% 0.23% 0.33% 0.44% 0.71% 2.00% 2.67% 4.79% 7.06%

Percentage of Online Tax Filing (OTF) Percentage of OTF Using e-Certificates 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: Research, Development and Evaluation Commission http://www.redc.gov.tw 41 Administrative Applications 3. Online Security GCA MOICA

Individual Government Agencies E-Government MOEACA Companies MOICA Government Agencies XCA Organizations 10/30/2007 Source: Research, Development and Evaluation Commission http://www.redc.gov.tw

42 Administrative Applications 4. Electronic Exchange of Official Documents Central Government Provincial/Municipal Government Country/City Government Reduce document transmission time-2 months to 2 minutes Raised the level of automation 100,000 documents being exchanged every day Reduction in annual postage expense of around USD 6.3 million 10/30/2007

Source: Research, Development and Evaluation Commission http://www.redc.gov.tw 43 Administrative Applications 5. Online Payments Services 10/30/2007 Source: Research, Development and Evaluation Commission 44 Administrative Applications 6. Handicap-free Websites Set up web content accessibility guidelines 1.0 in

accordance with the WAI (Web Accessibility Initiative)of W3C According to the e-government report of 2006 by Brown University, Taiwan is continuously leading the other advanced countries in promoting websites for the disabled 10/30/2007 Source: Research, Development and Evaluation Commission 45 Administrative Applications 7. Government Procurement System(GPS) Provide contractors government e-procurement services

10/30/2007 Source: Research, Development and Evaluation Commission 46 Administrative Applications 8. e-Housekeeper Services e-Housekeeper Concept to remindtheclients 2. Personal informationtools 3. Onlineregistration 4. Payment madeonline Credit cards M oneytransfer ICcard

e_Housekeeping Provide personal services, such as taxes, bills, traffictickets, vehicle exam ination, etc. 5. Downloadbills andreceipts 6. Valueaddedintegrationmanagement e-Government Service Service Platform Platform e-Government

1.Text m essage, e-mails Information database Agencies: M inistryof Transportationand Communications, M inistryof Finance, TaiwanPower Company, Taiwan W ater Corporation, ChunghwaPost Co. Ltd. etc.

Financial Institutes 1 Source: Research, Development and Evaluation Commission http://www.redc.gov.tw 10/30/2007 47 The impacts on implementation of e-government Government agencies are becoming more flexible and responsive: Government becomes able to act faster Government service times are extended Government service points become ubiquitous: An even broader range of government services is turning to be available:

The cost of government services is falling: 10/30/2007 Source: Research, Development and Evaluation Commission http://www.redc.gov.tw 48 E-Government Service Quality Survey Conducted by RDEC, 2006 51.10% 100.00% 96.80% 90.00% 80.00%

70.00% 60.00% 50.00% 40.00% 30.00% 100% 81.30% % visited e-government webs in 1 year 79.40% 66.30% Total Respondents continue using easy to use

happy about the services helpful in finding information 20.00% 10.00% 0.00% 10/30/2007 Source: Report to ICA 40th Conference September 2006 49 Online Privacy Lack of consumer confidence in online privacy is a major problem hampering the

growth of e-commerce 94.5% of Americans including internet and non-internet users, are concerned about the privacy of their personal information when or if they buy online Source: Malhothra N. Marketing Research: An Applied Orientation 5 th ed. p 275 10/30/2007 50 Legal Issues To avoid legal issues, a franchise company should obtain appropriate authorizations and consents from its franchisees Ex: privacy consents, warnings of online risk,

disclaimers Provide order summaries Contractual terms with an I Agree button Source: Rogers, J., Bennett, C., Grewal, S.E-commerce for Successful Franchisors. Franchising World. Aug 2007. Vol. 39 Issue 8, p23-24. 10/30/2007 51 The Future of Ecommerce Large companies that implemented new Internet technologies saw improvements of 13 percent to 21% in performance measures Small businesses with annual revenues of less than $10 million saw improvements of 40 percent to 50%

Room for growth - Still less than 7% of retail sales Source: Colorado Springs Business Journal. Aug 3, 2007. 10/30/2007 52 Upcoming Holiday Sales Online retail sales are expected to increase by over 20% this season compared to 2006, surpassing $39 billion According to JupiterResearchs U.S. Retail Holiday Forecast for 2007 Source: Morphy, E. Report: Cheery Outlook for Holiday E-Shopping Season. E-Commerce Times

10/30/2007 53 How to Succeed Adapt as the market changes Simplicity Users do not want to click numerous times Add value to the purchasing process Free shipping, special online deals Source: http://www.school-for-champions.com/ecommerce.htm 10/30/2007 54 How to Succeed Ensure privacy and legalities

Customer Service Purchase assistance, follow-up emails, help desk Pick a descriptive, memorable name -The business name is the web address -ex: books.com, etrade.com, travelocity.com Source: http://www.school-for-champions.com/ecommerce.htm 10/30/2007 55 Overall Message E-commerce can prove effective when conducted properly. It is an area where businesses need to pay ongoing attention, as developing trends may provide them with an edge in the electronic marketplace.

10/30/2007 56 References Internet World Stats. http://www.internetworldstats.com Accessed Sep 17,2007 Nielsen Net Ratings http://www.nielsen-netratings.com Accessed Sep 17,2007 Burns, E. The ClickZ Network. Top 10 Search Providers, 2007. Aug 30, 2007

http://www.clickz.com/3626904 Accessed Sep 17, 2007 United States Census Bureau. Quarterly Estimated E-Commerce and Retail Sales. U.S. Census Bureau News. Aug 16,2007. http://www.census.gov/mrts/www/data/html/07Q2.html. Accessed Sep 17, 2007. Wikipedia, http://en.wikipedia.org/wiki/E_commerce. Accessed October 12,2007. Assessing Organizational Innovation Capability and its Effect on E-commerce Initiatives. Journal of Computer Information Systems, Fall2007, Vol. 48 Issue 1, p133-145. Bills, Steve. Citi Launches Two Trials of Mobile P-to-P Technology. American Banker. Aug 6,2007, Vol. 172 Issue 150, p18-18. Rogers, J., Bennett, C., Grewal, S.E-commerce for Successful Franchisors. Franchising World. Aug 2007. Vol. 39 Issue 8, p23-24. Malhothra N. .Marketing Research: An Applied Orientation. 5th ed. 2007. p 275. Pan Western e-business team . http://www.e-future.ca/sask/pdf/b2b_basics.pdf Accessed Oct 15,2007. Dryden, J. Business to Consumer E-commerce Statistics. CONSUMERS IN THE ONLINE MARKETPLACE OECD WORKSHOP ON THE GUIDELINES: ONE YEAR LATER Berlin, 13-14 March 2001. http://www.oecd.org/dataoecd/34/36/1864439.pdf

Jupiter Internet Shopping Model Morphy, E. Report: Cheery Outlook for Holiday E-Shopping Season. E-Commerce Times. Oct 23, 2007. http://www.ecommercetimes.com/story/59964.html Echo H. Entry to the E-commerce Markets of China and Taiwan: An Application of Content Analysis. International, Journal of Management Mar2007, Vol. 24 Issue 1, p82-91. Isabel, Y. Eight Tips for Setting Up A Successful E-commerce Website. Hudson Valley Business Journal. Oct 2, 2006. Vol 17. Iss 19. p6-25. 10/30/2007 57 References Berger, C. How to Succeed in e-Commerce. Chartec Magazine. Feb 2002.

http://www.bgatereporter.com/assets/bgate/b88.pdf School for Champions http://www.school-for-champions.com/ecommerce.htm Accessed Oct 23,2007 Regan, K. Sprint Cuts Ribbon on Mobile Shopping Service. E-commerce Times. Sep 13, 2007. http://www.ecommercetimes.com/story/59330.html EIU CountryData at shttp://www.nationsonline.org/index.html Accessed Sep 30,2007 Research , Department and Evaluation Commission http://www.rdec.gov.tw Accessed Sep 30,2007 PEW pew /internet http://www.pewinternet.org Accessed Sep 30,2007 Foreseeing Inovative new Digiservices at:http://www.find.org.tw/find/home.aspx

Ecommerce Status in Taiwan at Tamkang University http://www.lib.tku.edu.tw/esource/webtopic/BusinessClass/ImformationMannage/reports/Inf_reportslist.html Accessed Sep 30,2007 Directorate General of Budget, Accounting and Statistics, Executive Yuan at http://eng.dgbas.gov.tw/mp.asp?mp=2 Fortune teller&online-Wroship Accessed Sep 30,2007 ClickFate http://clickfate.com.tw/namefate/namefate251.shtml Accessed Sep 30,2007 Mind City http://mindcity.sina.com.tw/east/MC-ziwai/index.shtml Accessed Sep 30,2007 E-Rent http://www.e-rent.com.tw/fengshui/ Accessed Sep 30,2007 Mind City http://mindcity.sina.com.tw/index.shtml Accessed Sep 30,2007 Asher, A. Developing a B2B Commerce Implementation Framework: A Study of EDI Implementation for Procurement. Information Systems Management, Fall2007, Vol. 24 Issue 4, p373-390. Eadington, W. The Future of Online Gambling in the United States and Elsewhere. Journal of Public Policy & Marketing, Fall2004, Vol. 23 Issue 2, p214-219. 10/30/2007 58

References Iching Shopping http://iching.shoppy.cc/ Accessed October 7,2007 PCHome http://star.pchome.com.tw/ Accessed October 7,2007 Yadav, Manjit S; Prabhu, Jaideep C; Chandy, Rajesh K. Managing the Future: CEO Attention and Innovation Outcomes. Journal of Marketing, Oct 2007, Vol. 71 Issue 4, p84-101.

CZU http://www.czu168.idv.tw/ Accessed October 7,2007 Virtual Ave http://areyo.virtualave.net/cgi-bin/light/lightindexd.htm Accessed October 7,2007 Raymonds Home http://web.thu.edu.tw/chiu/www/bpray/pray.htm Accessed October 7,2007 Intellect.com http://www.intellect.com.tw/temple/ Accessed October 7,2007 http://www.tccg.gov.tw/confucian/Chinese/a15.htm Accessed October 7,2007 Alexa http://www.alexa.com/ Accessed October 7,2007 http://secondlife.com/ Accessed October 7,2007 http://many.corante.com/archives/2006/12/26 Accessed October 7,2007 CCI-A www.cca-i.com/Primary%20Navigation/Online%20Data%20Store/internet_gambling_data.htm Accessed October 7,2007 Business Times Online http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/ article705968.ece Accessed October 7,2007 Bharadwaj, P., Soni, R. E-Commerce Usage and Perception of E-Commerce Issues among Small firms: Results and Implications from an Empirical Study. Journal of Small Business Management, Oct2007, Vol. 45 Issue 4, p501-521. Johnson, J. Online Sales Groth Slowing, but Still Double Digits. Colorado Springs Business Journal. Aug 3, 2007. Aug Issue. 10/30/2007

59 Q&A 10/30/2007 60

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