Telecom to begin Hong Kong's first online shopping service by April
Cyber shopping malls and online retailers may soon become a feature of Hong Kong life.
Hong Kong Telecom will be the first to introduce on-line shopping through the personal computer in April when it introduces it's Internet service provider (ISP), Netvigator.
Wharf Cable, with its Cable-On-Demand service, claims it will bring out on-line shopping through cable television this summer.
Meanwhile, Asia On-Line, a local ISP with plans to become a regional player in the Internet services field, just started beta-testing its on-line retailing service, called Interactive.
Although the services have yet to see real action, all the providers expect them to be immensely profitable.
Asia On-Line predicts that Interactive will bring in $8 million a month within two years.
Hongkong Telecom is even more grandiose in it's predictions. It believes that its IMS division which includes on-line shopping will produce 15 per cent of Telecom's total revenues by the year 2000.
Telecom's 1995 revenues totalled $26.91 billion.
Nevertheless, experts doubt that 1996 will be the year that Internet or electronic shopping explodes in Hong Kong - or anywhere.
According to one survey, almost one-quarter of companies selling products on the World-Wide Web in 1995 failed to sell a single item. Another survey, by the electronic business consortium CommerceNet, found that only 18 per cent of Internet users had ever purchased anything on the Internet.
Linkage Online, a local ISP, has helped about 100 companies market themselves on the World-Wide Web, including Cathay Pacific Airlines.
Only one of those companies, Hong Kong tea-maker Bo Bo Tea, is actually attempting to sell its goods through the Net, according to Chin Man, Linkage Online director.
Bo Bo Tea has averaged sales of $10,000 per month since it started its Web page last March. That's a tiny percentage of the company's annual sales of $30 million.
Fears of credit card security certainly abound. Many people are afraid that typing their credit card number and sending it via e-mail could leave it vulnerable to clever hackers, no matter how well-encrypted in code the credit card information is.
The bigger problem facing electronic retailers is inertia. How do you lure customers into virtual malls when it's more convenient to shop the way they always have? Simple. By offering extra incentives like coupons, rebates, or plain lower prices, said Douglas Ardinger, Dataquest analyst.
'You can't just put your brochure on-line and expect people to buy,' he said.
Proponents of electronic commerce in the US often point to the huge mail-order business which totalled nearly US$57 billion (over HK$440 billion) last year.
But Asians are much less familiar with - and less trusting of - the concept of mail-order shopping, which could hamper the adoption of on-line commerce in the region.
But experts are bullish about Internet commerce's long-term future.
International Data Corp (IDC) predicts that on-line commerce will hit US$150 billion by the year 2000, and more than US$1 trillion by the year 2010.
