E-Business Industry

The size and demographics of the online population that makes up the Internet universe is an important component of the industry as every business must have an in-depth understanding of their target audience in order to be successful. In general, the number of Internet users is growing at a staggering rate. The Computer Industry Almanac has reported that by the year 2002, 490 million people around the world will have Internet access; that is 79.4 per 1,000 people worldwide, and 118 people per 1,000 by year-end 2005. There are currently 374.9 million Internet users worldwide. From a demographics standpoint, Internet users are typically well educated, technically inclined, and financially well off. Popular uses of the Internet are for research purposes, entertainment, e-mail, chat, and for shopping. As the Internet expands so to does the number of opportunities for businesses.

The Internet has been known as a marketplace consisting of predominantly young, professional males. Over the span of 2000 we saw the demographics that make up the online universe expand and diversify. Shifts in Internet demographics are expected to continue in the foreseeable future as the use of the Internet continues to become an accepted part of every day life. The first quarter of 2000 marked the first time the number of women online in the United States surpassed that of men, according to a report by Media Metrix and Jupiter Communications. The number of seniors online is one of the most rapidly growing segments of the Internet. The number of seniors online at the beginning of was estimated at more than 23 million according to several sources. IDC, a leading industry analyst, expects the number of seniors online to grow to 34.1 million by 2004—an estimated 20% of all new Internet users. With the growth in the number of seniors taking to the online world, you will see an increase in the number of opportunities available to businesses who target this segment. Recent surveys by Harris Interactive found that “young people” in the U.S. between the ages of 18 and 24 have a significant amount of buying power, and are spending an estimated of $164 billion per year. This represents an attractive segment for businesses, because a respectable portion of the $164 billion spent is spent online and e-Business spending among this age group is more than four times the rate of e-Business spending among all adults.

e-Business brings forth a number of beneficial opportunities for existing businesses and new start-ups alike. Not only does it open the doors to new markets, but also it can open the door to new market opportunities. Consider the travel industry. Traditionally consumers would consult with their personal travel agent for vacation packages and flight information. The advent of the Internet and e-Business changed the rules for the travel industry, and new companies such as Travelocity.com and Expedia.com were able to enter into the already highly competitive market by offering rock bottom pricing and empowering the consumer with the ability to quickly and easily plan their own trips without interacting with a travel agent. These new companies were able to provide their services to an enormous market and at a much lower cost than could traditional travel agents at the time As a result, they have been quite successful. This is only one example of how businesses can be successful through e-Business.

The Internet expansion into all business and personal communications is inevitable. What was considered a “trend” is becoming the “norm.” As people are becoming more familiar and trusting of online transactions, the consumer relationship is being improved each month due to new security-based technologies that are being developed. New media support groups are also speeding up the learning curve of the average Internet users.

The future is bright for e-Businesses. Not everything is available on the Internet… yet. Hot items for sale online have always been and continue to be apparel, computer hardware/software, music, books, electronics, toys, and travel, but more and more people are coming up with new business ideas every day to meet consumers needs and changes in the online demographics. A recent survey conducted by Roper Starch found that Internet users are becoming much more open to using the Internet to conduct personal business, such as banking, and to shopping online. According to the study, in 1998 31% of people surveyed shopped online, 16% conducted personal banking online, and 11% traded stocks. In 2000, each of these numbers increased to 56%, 25%, and 16% respectively. Several studies indicate these numbers are going to continue to increase over the next few years, presenting many opportunities to businesses looking to extend their operations online. With respect to the B2B (Business to Business) marketplace, the Yankee Group estimates that 90% of all small to medium sized businesses will make at least one purchase online this year.

Online revenue is expected to increase to $3.2 trillion by 2004, according to Forrester Research. These are encouraging numbers, but for dot com businesses the year 2000 was filled with many difficult challenges. No longer can an e-Business succeed based on a good idea alone—you need the right e-Business model, the right Web site, and the right volume of targeted traffic. This year you will see e-Business move from being an option to a common aspect of many businesses daily operations—it has already begun. Whether you are a dot com or a bricks and mortar, an established business or your business is just a dream, this book will assist you in taking your business online and serve as your guide on the path to e-Business Success.

The term of “E-Business"

The term “e-Business” is used commonly, but e-Business means different things to different people. To some people, e-Business is simply having a Web site with a toll-free number visitors can call to place an order.Other people think e-Business is having a Web site that enables customers to submit their credit card information online, even though their orders may then be processed manually just like a fax or telephone order. Still others believe that e-Business means being able to place a secure online order, having immediate credit card verification, and having a fully integrated backend database that automatically updates and informs the customer of the latest prices and whether or not an item is in stock. The point is, how you define e-Business and how you implement e-Business on your site will depend upon your business and the type of products or services you are marketing on the Web.

For instance, a software development company that sells a downloadable software application (i.e., has no physical boxed version) has no inventory. Therefore, they would not require a backend inventory database to be integrated with their e-Business system. All they might need is an e-Business system that automatically verifies credit card information and takes payment. On the other hand, if you have an online business that intends to sell books, and you want to become the next Amazon.com, you will require a full-blown, fullfeatured, fully integrated e-Business system to compete with the Amazon.coms of the world. Otherwise, potential customers will shop at Amazon.com because their e-Business system is more convenient and easy to use.

The Right e-Business Model

“We are crossing a technology threshold that will forever change the way we learn, work, socialize and shop. It will affect all of us, and businesses of every type, in ways far more pervasive than most people realize.”

Bill Gates, Comdex 1994

Bill Gates was very prophetic when he made this statement in 1994, eons ago in terms of the Internet. Communicating with customers and other businesses has changed drastically over the past century. It started with print, then radio, television, phone, fax, and now the fastest medium yet—the Internet. The future is bright for businesses that utilize the Net as a primary medium of communication and sales.

The opportunity is there for anyone to create a dynamite business online if it is done right. Unfortunately, it’s not a matter of just developing a Web site, putting it online, and having the world beat a path to your door. To achieve success online, you have to choose the right business, choose the right e-Business model, develop the right Web site directed toward your target market, and then generate substantial traffic to your Web site. The online customer who visits your site is much more demanding than a typical offline buyer in many ways. The online buyer knows what he wants, how he wants it, when he wants it, and at what price. The product and service must be exactly what was ordered and must be delivered immediately to the correct place and for the lowest price he can find. Competition is fierce on the Internet, and you must do a number of things to succeed online. First, you have to create a professional and secure e-Business presence. Second, you have to target the demographic of Internet users who will use your product or service. Finally, you have to work diligently to attract traffic. Serious marketing research is required to successfully target and attract the appropriate customers.