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Al-Ahram Weekly 20 - 26 May 1999 Issue No. 430 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 20 - 26 May 1999 Issue No. 430
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Supplement Travel Sports People Time Out Chronicles Cartoons Letters Internet or bust
by Niveen Wahish
Mohamed Fathi, aged 18, is a computer science student. He has to keep up with the latest developments in the industry, but does not always find what he is looking for in the university library. To solve this problem, he decided to search for a book on the Internet and managed to find what he needed at a lower price. He received the book two days later, much quicker than if he had waited for the library to order the book for him.
This is just one example of how simple it is to purchase an item through the Internet. It is easy to sell through the Web as well, but many Egyptian suppliers seem to be unaware of that fact.
A few years ago, this process would have been the stuff of science fiction movies. Today Internet transactions, including electronic commerce (E-commerce), the process by which trading takes place on-line, are a fact of life.
The basic idea of E-commerce is that "with the use of technology, we can optimise trading as much as possible", said Asem Galal, product manager at Microsoft Egypt. And when a consumer is connected directly to a manufacturer, there are many steps that can be eliminated. "This cuts much of the cost of intermediary activity and lowers prices," Galal explained.
"Trade, as it is known today, came about because the tools were available. In the past, intermediaries came about because they were required. Products would be in one country, with a market in another area of the globe. This created the need for distributors, dealers and agents," said Galal.
Today the Internet has lifted geographical barriers to the extent that location is no longer a matter of relevance. "When I buy something through the Internet, I am no longer concerned if it is in the US or around the corner," Galal pointed out.
The Internet enables small companies to stand side by side with large companies. Size and location of a company are no longer important. Now other issues are at the forefront, such as who offers the best price, delivery time and service. "Competition is no longer about location or nationality. Instead it's about your creativity and ability to create an attractive web site," Galal said. This adds another dimension to how a business markets its products.
Galal
MoneimneE-commerce allows new players and new customers to enter the market. "If a company does not have any presence on the Internet today while its competitors do, then it will be put out of business," the Microsoft manager said. "In the past, technology was a support function, now it is an enabling function. Businesses that do not adapt to new technology are doomed."
Egyptian businesses have to find a place for themselves in this more competitive environment. "It will expand their horizons. It is an easier form of exporting, and it will guarantee them a place in the Egyptian market once their product catches on. Technology stimulates the appetite of the consumer," Galal said.
All a company needs to engage in E-commerce is a web site. "With a web site, the positioning of a company is different and the [customer's] accessibility to the company improves."
Being on the Web makes companies accessible to everyone, instead of opening a shop in every country and bearing immense overhead costs. "It provides sales opportunities that were not available before."
Galal advises businesses to have dynamic interactive sites through which customers may order or contact a company for additional information, rather than having static, brochure-like web sites. "The Internet is a very competitive market. If your site does not attract customers, they will not visit it again."
User expectations should be met because they do not have tolerance when they know another supplier may quickly provide them with the same product. "Those who create sites should have marketing in mind and not operate strictly as technicians," the Microsoft manager said.
When using the Internet, businesses must gain a better understanding of demand in markets outside their region in order to position their products attractively," he said.
Increased trade through the Internet is bound to affect the role of middle men such as distributors and dealers, but it will not eliminate them altogether. For example, distributors will have to adjust their approach and, for example, can take on maintenance work for the products being sold. Banks will still be needed to handle settlement of payment for purchased items. "Technology changes the process and the types of jobs that people have," Galal said.
While electronic commerce promises increased opportunities for Egyptian businessmen, there are many local factors which have to be dealt with before the use of E-commerce can spread. One of the obstacles facing Internet trade in Egypt is that a very limited number of Egyptians pay by credit card, the form of payment most used for Internet purchases worldwide. And some of those who have credit cards hesitate to give out their number because "they are afraid that criminals might misuse this information", Galal pointed out.
However, Walid Moneimne, Compaq's managing director for the Middle East, Mediterranean and Africa, asserts that large computer businesses have invested a lot "to make things more secure".
Another essential prerequisite for the success of E-commerce is to have more users connected to the Internet. "The main problem facing E-commerce activity in Egypt and the Middle East is the low number of Internet users," Moneimne said. "In order to develop business transactions, all parties should be connected to the Internet, which is not the case right now in the region except among computer companies. Banks should also be connected because they will be the ones that settle accounts between users."
Speed in accessing the Internet is also essential. This requires good quality telephone lines which can be easily accessed and can accommodate the largest number of users, a service which has definitely improved in Egypt in the last few years, according to Microsoft's Galal.
The speed at which commodities are delivered is also important. "When I order today, I expect to receive my goods in 24 hours. It is a new culture, and for a new culture to be trustworthy, it must deliver what it promises."
When anyone in Egypt orders an item through the Internet, he still may face long delays in receiving it because of slow customs procedures, and this can dampen the initiative to trade via the Internet. "This can result in E-commerce losing its competitive edge over local products," Galal said. Customs procedures need to be more flexible and unnecessary bureaucratic obstacles to trade should be removed to promote the use of E-commerce. "Customs employees should be business-oriented and facilitators," he stressed.
