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ECommerce and Content Development

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Title: ECommerce and Content Development


1
E-Commerce and Content Development Strategic
Directions and Success Strategies of Electronic
Commerce in Malaysia
March 2002
2
  • E-Commerce has got more to do about the
    management of People and Culture in adopting
    Technology rather than the management of
    technology itself.

3
National Electronic Commerce Strategic Directions
1. Overview
  • The National Electronic Commerce Strategic
    Directions established a comprehensive and robust
    strategic framework for actions. The report seeks
    to identify and describe the most prospective
    areas for national initiatives to begin the task
    of securing Malaysia's electronic commerce
    future.
  • In so doing the document also established a
    decision-making framework within which, from the
    platform of an initial tranche of special
    projects, Malaysia can be "strategically
    opportunistic" whilst remaining focused on a
    constant strategic intent, as global market
    circumstances evolve and take shape.

4
2. E-Commerce in Malaysia
The tip of the Iceberg
  • The Tip reveals says many things -
  • Asiafeatures.com December 23, 2001 IDC (M)
    stated that Malaysia is one of the few countries
    in the region to post a positive growth trend due
    to government fiscal policies focus on IT
    development
  • B2B revenue expected to grow 117.4 by 2002,
    reaching US982m
  • Internetnews.com September 3, 2001IDC (M)
    forecasted Malaysia B2B e-commerce market
    expected to reach US7.8 billion in 2005.
  • CAGR of local Internet users is 20 for the next
    5 years

5
  • Unknown Road Ahead. But what are the drivers?

6
Important elements for E-Commerce in A Country -
The Big Picture
E-COMMERCE
7
  • The Direct and External (In-direct) Attributes to
    E-Commerce
  • Direct Attributes
  • Telecommunication Infrastructure
  • Internet/Broadband access Infrastructure
  • Data Center Facilities
  • Application and Managed Services
  • Service providers
  • Externalities
  • Funding
  • Local ICT demand
  • Entrepreneurship and Technopreneurship

8
3. The Externalities
  • Funding

No. of ICT Companies
Pre-IPO
Early Stage (Idea and Seed)
Expansionary
Early Stage (Idea and Seed)
No. of ICT Companies
Start-up
Profile of ICT companies in developed countries
Start-up
Expansionary
Pre-IPO
Profile of ICT companies in developing countries
Note Explanation of development stages is
attached as Appendix I
9
Strategic Funding policy in Early Stage
  • Due to the nature of developing countries, more
    emphasis must be taken for Grants, Incubation and
    Angles funding.
  • Failure of this would lead to mismatch in
    expectations by VC in the start-up to Pre-IPO

Grants, Incubation Angels
No. of ICT Companies
Early Stage (Idea and Seed)
VCs / Debt Funding
Start-up
Expansionary
Pre-IPO
10
  • Incubation - The need to nurture and develop
    Technopreneurs
  • Reduction in cost and time to market will
    fundamentally increase the viability and value of
    the Investment

11
  • Local ICT Demand
  • Essential to the development of Technopreneurs
    and a vibrant E-Commerce community in any
    country. The Fueling of demand further fuels
    E-Commerce
  • Government During the Eighth Plan period, a
    total of RM5.2 billion will be allocated for
    ICT-related programmes and projects, as shown in
    table adjacent

12
  • SMEs - What have we learnt?
  • Only 7 of SMEs are selling through the Internet.
    Of this, 49 responded that
    Internet selling
    is less than 10 of their total sales.
  • Only 13 of SMEs are purchasing through the
    Internet. Of this, 68 responded that
    Internet purchases are less than 10 of their
    total purchases.
  • Only 7 of LEs are selling through the Internet.
    Of this, 48 responded that
    Internet selling
    is less than 10 of their total sales.
  • Only 13 of LEs are purchasing through the
    Internet. Of this, 80 responded that
    Internet purchases are less than 10 of their
    total purchases.

Source MDC, 2000
13
  • Large Enterprises Create the Push
  • Enterprises will have drastic impact to
    grassroots and vendors/ suppliers (SMEs)
  • What needs to be done
  • Top-Down approach
  • What is the incentive? Tax incentive?
  • Increase public trust on the Internet
  • Reduction of set up cost
  • Inadequate legislation protecting IP rights
  • Immediate need to address security and privacy
  • Fast track the Insufficient customers/suppliers
    issues

14
  • Entrepreneur Technopreneur
  • Technopreneurs or IT-driven entrepreneurs is the
    key ingredient to EC. This group contributes
    business ideas innovations to EC ICT industry
    at large.
  • Conducive supportive economic system increase
    levels of entrepreneurial activity (Source
    Ministry of Energy, Communication Multimedia,
    NST Mar 2002)
  • 94 Malaysian SMEs with MSC status and 247 IT SMEs
    in 2001

15
4. Direct Attributes
16
  • Important elements for EC in Malaysia are -
  • Telecommunications Infrastructure privatised
    regulated liberalised market that allows for
    better tariffs efficient service
  • Internet Access Infrastructure services reliable
    infrastructure provided for Internet use in the
    country (Tmnet, Jaring, TimeNet Central,
    MaxisNet)
  • Data Centre Facilities centralised repository
    for storage, management, dissemination of
    information equipped with security and essential
    hardware requirements (Skali,Mimos,Netcel
    360,DataOne)

17
  • Important elements for EC in Malaysia (contd)
  • Application Managed Services provides network
    content management, hosting, managed storage
    security (Skali,FreeNet,Netmyne)
  • EC Infrastructure Services that enables
    efficient effective clearing settlement
    processes within EC (eg. MEPS)
  • Service Providers such as EC, contents,
    government services in various industry spaces
    (see Next Slide)

18
Example of Achievements - Service Providers in
Malaysia
  • The government envisage to
  • Foster world class communication networks.
  • Direct Internet connection to US via a back bone
    network in Japan (45 Mbps).
  • Seamless connectivity.

19
Internet / Broadband Access Infrastructure Intern
et Services
  • Network Infrastructure
  • Capable of accommodating various Internet
    operation.
  • Encouragement of development broadband
    connection - affordable broadband connectivity.
  • State of the art technologies form the last mile
    up to the backbone to fulfill the needs of
    business operations.

20
Network Capabilities
21
Internet / Broadband Access Infrastructure
Internet Charges
USD 1 RM 3.8
22
E-Commerce Infrastructure and services
  • Enterprise servers/DB
  • UNIX operating system
  • Redundant ECP apps
  • 3-layered firewalls
  • Multiple authentication
  • Physical securities
  • High speed access
  • 24-by-7 tech support
  • On-line reporting
  • Continuos enhancement

Merchant Server
WTLS
ECP Merchant Server
128 bit SSL
1024bit RSA 56bit DES MID/TID Dig. Cert.
IP add Signature
  • Full range systems and applications solutions
  • Ability to manages the technological
    complexities
  • Flexible commercial packages

Banking network
23
Methodology to a National e-Commerce Plan
  • What is the Vision?

To drive the economy towards higher productivity
and higher value added economic activities
through technology !
24
What do we want to achieve with an e-Commerce
Plan?
Go Global
Enhance and build critical mass
Leapfrog into success in the Information Age
Create value for information age businesses
Go Regional
25
Access the Externalities
Knowledge Society
  • Phase 3 - 2007
  • The providence of
  • 500 world class companies.
  • Build critical mass.
  • Global testbed for new apps.
  • Linked to 12 intelligent cities
  • world wide.

MSC Flagships
  • Phase 1 - 1996
  • The providence of
  • 1 Corridor.
  • 50 World Class
  • companies.
  • Launch 7 flagship
  • applications.
  • Framework of cyberlaws.
  • Cyberjaya as leading
  • intelligent city.
  • Phase 2 - 2002
  • The providence of
  • Funding (MAVCAP).
  • ICT Demand Creation.
  • Marketing Opportunities.
  • Technopreneur
  • development program.

Successfully created MSC
26
  • Access the Internalities
  • The Government of Malaysia commits the following
    -
  • To provide a world-class physical and information
    infrastructure.
  • Allow unrestricted employment of knowledge
    workers.
  • Ensure freedom of ownership.
  • Allow freedom of sourcing capital globally for
    MSC infrastructure and freedom of borrowing
    funds.
  • Provide globally competitive telecoms tariffs.
  • Ensures no censorship of Internet
  • Provide competitive financial incentives
    including no income tax or an investment tax
    allowance for up to ten years and no duties on
    the import of multimedia equipment.

27
Response
28
  • Strategies
  • Immediate term e-commerce strategies are as
    follows -
  • Active user of ICT
  • Increase e-commerce awareness among the Malaysian
    export community
  • Facilitate exporters entry into e-commerce and
    e-business.
  • Long term e-commerce strategies are as follows -
  • to build a critical mass of at least 70
    e-commerce-ready exporters among companies which
    are registered with MATRADEs exporters registry.
  • To accelerate the adoption of e-commerce among
    Malaysian exporters with focus on specific
    markets.

29
  • Malaysia e-commerce strategy is considered a
    model for other countries. The following strategy
    outlines challenges and opportunities for
    business and consumers. Strategic Action Plan
    needed is divided into four main components
  • Building trust in digital economy.
  • Security and encryption
  • Privacy the protection of personal information
  • Consumer protection
  • Legislation (Consumer Acts).
  • Public education.
  • Enabling technologies.

30
  • Legal and commercial framework.
  • Recognition of electronic signatures.
  • Evidence rules for electronic records.
  • Liability.
  • Intellectual property protection.
  • Network access and availability
  • Telecom investment.
  • Research network.
  • Localization and multilingualism.

31
  • Malaysias experiences...

Source MDC, 2000
32
  • Malaysias experiences...

Source International Data Corp.
33
5. Conclusion
  • To implement such successful e-commerce
    strategies, Malaysia need to encourage SME to
    export more through the use of e-commerce to
    develop an expert culture among enterprises and
    promote their products worldwide which in return
    increases the overall national trade.
  • Doing so, several factors are mandatory to drive
    the success, namely
  • Build critical mass.
  • Ready infrastructure.
  • Policy and Regulatory Framework.
  • Attracting inbound customers.
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