The credit card barrier to e-commerce

Broadvision forsees a compromise in e-commerce transactions in which buyers view goods online and purchase through a sales agent on the phone.
Written by Charles F. Moreira, Contributor
Broadvision forsees a compromise in e-commerce transactions in which buyers view goods online and purchase through a sales agent on the phone.

KUALA LUMPUR (MyStar) - US-BASED e-commerce solutions provider BroadVision Inc believes that the fear of giving credit card numbers over the Internet will continue to be a major issue in countries like Malaysia.

Its Malaysian country manager Chin Ying Loong thus expects local business-to-consumer (B2C) e-commerce would primarily be conducted by buyers viewing goods and services on a website, then placing orders with a sales agent by phone.

"This approach has proven very successful with our customer, Lippo Shop (http://www.lippo.com) in Indonesia, and some Malaysian stores are considering adopting Lippo's approach,'' he claimed.

Sandra Vaughan, BroadVision (Asia Pacific and Japan) vice-president for marketing, noted that this fear of giving credit card numbers over the Net has ceased to be an issue in B2C e-commerce in the United States.

Still, she said, "The best possibility for successful B2C e-commerce is for established brick-and-mortar shops to extend their reach online, since they already have an established reputation with the buying public.''

"Unlike pure-play online stores, established stores don't need to spend much money on building up mindshare,'' Vaughan told In.Tech recently.

BroadVision said it is confident enough of the Malaysian potential for e-commerce solutions that it plans to open a local office, albeit only in another 6-12 months. "We expect online banking services to take off with local banks during that period, and this would be followed by foreign banks being allowed to provide online banking services next year,'' said Chin.

BroadVision considers online banking as B2C e-commerce, and Chin said he expects most banks to target these and other value-added services at middle-to-high income customers who have little time to go to the bank.

Currently selling into Malaysia from its regional office in Singapore, BroadVision's major local customers include Maybank, which uses the US company's solutions for its online banking and financial portal at http://www.maybank2u.com.

Other potential local B2C applications include travel and hospitality portals, according to the company.

BroadVision's suite of e-commerce software is used in B2C, business-to-business (B2B) and business-to-employee (B2E) e-commerce applications over the Internet, corporate intranets and extranets.

"B2E e-commerce does not involve financial transactions but instead provides an organisation's employees with personalised online information relevant to them,'' said Vaughan.

She claimed that Ericsson Sdn Bhd is a major B2E customer for BroadVision in Malaysia.

McKinsey and Associates estimates that only one-third of operations in B2B and B2C e-commerce are transactions-related, she added.

However, B2B e-commerce still makes up the largest share of BroadVision's worldwide market at 50%, with B2C comprising 40% and B2E 10%.

Chin expects its local market to be even more skewed towards B2B at 65%, with B2C taking up 30% and B2E the remaining 5% only. "We expect our worldwide revenue from B2B e-commerce to jump nearly 400% from US$166mil (RM441mil) last year to US$400mil (RM1.52bil) this year, and we expect our Malaysian revenue to grow at a similar rate,'' said Vaughan, adding that over the last three years, the company has been moving its focus to the B2B market.

Asia currently provides BroadVision with 8% of its global revenue, although Vaughan said she expects Asia's contribution to jump to 20% in two years.

Locally, BroadVision works with Andersen Consulting (to be known as Accenture, effrective Jan 1, 2001), Arthur Andersen and Deloitte Touche which provide consulting and implementation services for its software.

Its resellers include Cybertouch and Hewlett-Packard Sales Malaysia, and it said it is currently negotiating partnerships with a few more local companies.

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