The Ultimate Market Potential of the Internet
by Thomas J. Judge, Jr.
All rights reserved.
While it's no surprise to anyone that the United States is the world's most
wealthy market, much of the U.S. business community seems oblivious to the
fact that over 78.4 percent of world economic power is based outside of
U.S. borders... and unless non-U.S. companies are expanding into
non-domestic markets in addition to the U.S., they are afflicted with a
variation of the same myopic view of global commerce. Consequently, it's
of vital importance to secure the advantages of gaining a more cosmopolitan
perspective of the Internet's business potential.
According to the Direct Marketing Association, 113 million American catalog
shoppers will order more than $75 billion (UK milliard) worth of goods in
1997. Projections from the market research firm International Data
Corporation (IDC) indicate about 9 million computer users will order just
$5.4 billion worth of products on the Internet this year. Though figures
vary, the future looks brighter, with projections ranging from $73 to
$100 billion for the year 2000. Forrester Research forecasts
business-to-business Commerce at $66 billion in U.S.-related Internet
revenues, while improved security and the increasing number of households
on the Internet drive consumer retail to $7 billion by 2000. IDC projects
that growth of sales combined with an increase in the number of users
buying and selling goods and services on the World Wide Web will boost
commerce on the Internet to $100 billion in the year 2000.
From an international perspective, in 1997, total U.S. imports of
merchandise and services will very likely exceed $1 trillion (UK billion)
for the first time in history, while U.S exports of merchandise and
services are expected to approach $900 billion. This establishes a value
of $19 billion for each percentage point of bilateral U.S. trade that is
Internet-associated in 1997! While there is no way to determine what
percentage of U.S. trade activity is facilitated via the Internet (i.e.,
contact initiated through Web sites or negotiated via e-mail); there can be
no doubt that it does occur. In fact, travel services, a business sector
for which export-import figures are tracked, are among the hottest business
sectors on the Internet.
Aggregate global exports for 1997 will very likely reach the $5 trillion
mark - which increases the magnitude of the single percentage point
mentioned above to $50 billion. This is not presented to debate the
current level of Internet-associated international commerce, but to
generate awareness that there currently exists Internet market
opportunities measurable in trillions of U.S. dollars for those with the
savvy to direct efforts toward tapping into that potential. A potential
continually fueled by an ever-increasing awareness of the globalization of
commerce at least partly attributable to the exponential growth and
evolution of the Internet. Perhaps international trade has eluded the many
economists, Internet experts, and companies intent on determining the
metrics of Internet commerce because it is tracked through government
agencies and finalized in the direct transfer of funds from one financial
institution to another; nonetheless, it is there, and it is being
overlooked.
If $5 trillion in global trade opportunities are too abstract to be viewed
in the context of the future goals of your company; accept that perspective
as the macrocosm of commerce. Viewed in this way, it becomes possible to
see that information can be peeled away layer-by-layer to reveal the
specifics of market activity most relevant to a company's goals. This
information ranges from an overview of trade activity involving entire
regions or trade alliances (e.g., South America, APEC, EU, etc.) to details
on the activity of a particular port, and from a broad perspective of
related industry/product sectors to a detailed analysis of a particular
commodity or specific company; or any combination of these elements. This
requires culling from the millions of documents supporting and facilitating
the entire spectrum of international commerce, those able to provide the
market- or product-specific insight necessary to establish the parameters
of the microcosm in which a company is able to execute its international
marketing strategies.
Another important factor in the equation is that based on a subjective
analysis of U.S. Department of State and CIA publications, markets in which
the English language is considered either an official language, an
associate language, or widely used throughout governmental/educational
institutions and business/commercial communications, constituted trade
partners representing over 42 percent of the U.S. merchandise import market
and over 50 percent of its merchandise export market in 1996. Using
conservative trade projections, these figures represent approximately
$379 billion in U.S. merchandise import and $335.8 billion in U.S.
merchandise export opportunities in 1997. The vast number of world
business leaders educated at English-speaking universities assure that the
figures presented here are a conservative estimate. These facts, and
recent news revealing that 85 percent of the Internet is in the English
language, are compelling reasons for companies located in non-English
speaking countries to consider expanding their Internet presence to include
English language pages on their Web sites. This is not intended to endorse
an English-only approach to international marketing, which in my view would
be a mistake; but to kindle an awareness of the power inherent in even the
most basic tools.
It is also important to consider the contrast between Internet site
development for Direct Marketing that targets consumers and that planned to
promote business-to-business sales. Consumers must be lured to a site,
enticed to explore it, informed about a company's products, and motivated
to buy those products, all while being entertained by site content that is
updated on a regular basis - attempting to accomplish this can be
extremely difficult, time consuming, and expensive. Any attempt to do this
across cultural and international boundaries only further complicates the
process, making such objectives even more difficult to achieve.
In comparison, businesses effectively targeted (those having an interest
in, need for, or distribution channel appropriate for a company's
products), need only be made aware of that company's Web site. Typical
business browsers have a much more utilitarian approach and seek only
information - data on a company's background, product line, contact
information, and an e-mail link are enough to begin a more substantial
dialog. Note that once contact has progressed to the point of negotiating
an ongoing trade agreement (i.e., a distribution contract), there remains
little beyond the awareness of the parties involved to associate it with
Internet marketing.
In terms of market fulfillment, most companies approach the Internet as
they would mail order marketing; however, it is important to understand
that attaching an international address label to a package changes that
sale to an export-import transaction subject to the regulatory authority of
numerous government agencies on either side of that contract. This is not
necessarily (dependent on the products/markets involved) as ominous as it
seems, but does mandate understanding and adhering to both the export
regulations of the domestic market in which a company is based, and the
import regulations of the prospective buyer's market prior to making a
commitment (i.e., responding to a non-domestic inquiry with a pro forma
invoice) to export merchandise to that market.
Relatively few of the world's consumers are on the Internet - while
cyberspace gurus have long touted the importance of establishing a
marketing presence on the World Wide Web, I am not aware that any have made
the leap to endorse using cyberspace as a portal through which to secure a
real-world presence in new markets. Done properly, international
business-to-business Internet marketing can be a highly effective way of
gaining access to those new markets, and ultimately, the consumers within
them. There is no greater business potential than that of global commerce;
if implemented as an integral element of a well-planned international
marketing strategy, a presence on the Internet (the largest and most
readily accessible mass communication medium in world history), can
literally put a company on the world map!
Pages Related To News And Weather In This MasterPage
The Polish News Roundup |
News And Opinion Journal |
European News Review |
Poland Weather |
About Weather In Poland |
Poland Weather |
Free News By Email |
Poland News Services And How To Get Polish News In English. |
Free English Polish News Services |
About Polish Weather In February |
Poland News And Weather |
Add Polish News To Your Web Site |
Post An Article |
News Submission Guidelines |
Article Contributor |
Call For Papers |
Post And Comment |
Add Pictures - Comments - Information |
