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Business

Lethargic UK firms risk competitive edge

UK firms know what e-commerce is, they know if they don't use it they'll be left behind, but caution rules the day
Written by Jane Wakefield, Contributor on

Nearly 83 percent of British companies believe e-commerce will be crucial to future competitiveness but only 21 percent have a strategy in place. Such lethargy could cost the UK around £18bn by 2001 according to latest estimates from industry analyst IDC, that's up from $1bn (£0.6bn) in 1997.

But for some small companies the Internet remains just a nice idea for the bigger players... Mayer Booksellers of Welwyn Garden City is a good example of a small UK business that understands the theory behind e-commerce but has yet to embrace it. Employing forty people, Mayer has a small chain of book shops and a turnover of £4m per year. Brian Finch, finance director explained why e-commerce is not yet a feasible option: "All the online bookstores, as far as I am aware, are losing money. We are only small and don't have the money to throw at such a project. There is no way we are going to leap into something with no certainty of making profits."

Finch does not see companies like Amazon as a threat in the near future, despite being in the same sector and despite Amazon's massive profile on the Web. "Such companies are competitors to mail order. There is no sign of them taking a significant amount of our business."

Nick Goode, owner of Goode Sport, a distributor of imported racket sport accessories in the UK believes apathy about the Net and its potential to wreck traditional established businesses is reckless. "People already illegally import goods from oversees and the Internet is making this far easier," he said. Despite the threat he remains hesitant about going online as he does not believe his customers are cyber shoppers yet.

Jupiter analyst Nick Jones believes UK firms give e-commerce a low priority because they are loathe to make radical changes and believes it remains a government role to lead the way.

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