Obstacles to online success in Asia

ZDNetAsia's exclusive interview with BG Lee Hsien Yang, President & CEO, Singapore TelecomZDNetAsia believes that there are several major obstacles on the superhighway leading to e-commerce success. On the heels of SESAMi.

ZDNetAsia's exclusive interview with BG Lee Hsien Yang, President & CEO, Singapore Telecom

ZDNetAsia believes that there are several major obstacles on the superhighway leading to e-commerce success. On the heels of SESAMi.com's launch of Asia's first real-time e-procurement portal, Victor Ng - Editorial Director of ZDNetAsia - had the exclusive privilege of seeking BG Lee's insights into several key issues.

Organizational inertia
"There are always internal obstacles when you want to do something differently," says BG Lee. "Sometimes it requires a new mindset; it requires change." Some groups of people, for instance, will find that their jobs are now different and there will be resistance to change.

"There are also start-up costs associated with the transition to e-commerce," he points out. A corporation has got to absorb the short-term impact for the long-term benefit. Some companies, unfortunately, are unwilling to look into the longer-term benefits of e-commerce. His suggestion: Be sensible in your approach. "Just look at it over a several-year horizon in order for this kind of decision to make sense."

These internal issues, he adds, will have to be addressed by companies such as SESAMi.com in their endeavor to create a vibrant e-commerce hub in the region.

And steps have already been taken: The way SESAMi.com is structured - and its business model - is centered on flexibility. An entire range of solutions, which allows different entry levels for enterprises of different sizes, are being offered to allow all kinds of businesses to start adopting e-procurement solutions at a rate that is most comfortable.

"We hope that as sufficient impetus is being built up from those joining on, others will see that this is the sensible thing to do and that to actually continue with the old systems of procurement is archaic and completely obsolete," says BG Lee.

E-Commerce Regulations
Government regulations will always be playing 'catch-up' with e-commerce activities, according to BG Lee. "Perhaps the lack of regulation is a boon to e-commerce. I think if you had a lot of regulations, a lot of things happening out there now would not have happened. I think one of the reasons why the Internet is so vibrant is because people could just try it out."

Moreover, nobody really knows who's supposed to regulate the Internet, he added. For instance, taxation laws for cross-border trade are one issue that's going to be very difficult to resolve.

Will things end up as a vicious spiral, when 'black sheep' of the industry cause problems so that regulatory authorities cannot but clamp down hard on e-commerce activities? "The rules of the game for e-commerce are similar to those for paper-based transactions," says BG Lee. Referring to SESAMi.com, he asserts: "We would hope that our reputation stands behind the sites we build. If there are issues, we will deal with them."

Especially issues related to quality control and authorization of fund transfers. SESAMi.com officials confirm that there are stringent measures applied when screening and monitoring the integrity and reliability of buyers and suppliers using its portal.

While ZDNetAsia believes that the banking sector in Asia today posts a major obstacle to the progress of e-commerce, BG Lee's opinion is far less skeptical. "SESAMi.com will ensure that there are appropriate and sufficient payment mechanisms. We will work with the banks to make it happen."

And he is confident that things will happen. "The banks clearly have an interest to allow their customers to transact as widely as possible with different parties. After all, the purpose of the banks is to facilitate the flow of funds."

Since banks are already very used to electronic transfer of funds, protecting their customers in e-procurement scenarios should not post a serious challenge to them. So, where the region is concerned, according to BG Lee: "I don't see that there is a problem in persuading the banks to work with us."

'Big boys' coming into the playing field may dissuade smaller regional players from getting into e-commerce game and hinder the growth of this industry in the region. But BG Lee's response to big international players competing in the Asian market is: "One has to be quick enough to build a strong position. We have the capacity to do that."

What about resistance from traditional middlemen? Says BG Lee: "Middlemen who really add value will always find a niche for themselves. But those who merely act as a conduit will see this as a potential threat." In other words, the end of non-value-adding middlemen roles is inevitable.

However, he admits it's too early to tell how e-procurement will change the complexion of how business is conducted in the region. "We think there is enormous potential in this business. But we need to bring in sufficient scale to make the project worthwhile." The speed at which this project has been pushed through reflects the desire of the market and is testimony to SESAMi.com's desire to build momentum for this business to succeed, he affirms.