What is e-business?

What is e-business | A New Investment Opportunity | The Virtual Transformation Of Business | The Exponential Growth of e-business

E-business refers to the use of the Internet and other electronic networks to purchase consumer goods and services and to conduct business-to-business transactions. This rapidly growing market includes companies that are adopting e-business strategies as well as companies that create and service these new electronic business channels.

A New Investment Opportunity

A new era is upon us. An era driven by vast computer networks and electronic infrastructure. An era in which only innovative and fast-moving organizations can thrive.

It is called the electronic business—or e-business—market, and it's here to stay. E-business is only in its earliest stage, yet it's growing at a greater rate than the traditional "bricks-and-mortar" economy. Already worth more than US $90 billion, recent reports predict that it will explode to US $1 trillion worldwide within three years. Companies adopting e-business strategies will become leaders in their respective industries. These winners in the digital economy will enjoy superior returns accompanied by significant capital appreciation for their shareholders.

Individuals have a rare opportunity to capitalize on a whole new class of business that promises strong growth in the years to come. For the savvy, long-term investor, this exciting new market offers a world of opportunity.

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The Virtual Transformation Of Business

E-business is affecting economies worldwide, altering the business landscape in almost every sector.

New distribution channels - The Internet has evolved from a specialized communications network into a viable "marketspace." Businesses, realizing they can deliver products and services 24 hours a day, seven days a week, have embraced this new medium.

New players - Established companies are finding that small start-up enterprises can use electronic networks to enter their market quickly by offering competitive products with substantially reduced overhead costs. At the same time, new cross-sector competition is arising as the boundaries between industries fall.

New global markets - Along with the worldwide trend towards trade liberalization and market deregulation, electronic networks such as the Internet have helped individuals and organizations transcend geographic boundaries.

New products and services - Electronic publications, online financial services, virtual auctions and virtual shopping are just a few of the emerging trends that are revolutionizing many industries. Existing products and services, converted into digital form, can be redesigned and repackaged to create entirely new customer offerings.

New business processes - Electronic networks are reducing costs and promoting efficiency for companies while simultaneously adding new forms of value for customers. Relationships with other businesses are being transformed as suppliers become partners and share in profit and risk.

New profit models - New competitors. New products and services. New marketspaces. To thrive in this radically changed landscape, organizations must find innovative profit models. Companies are using e-business strategies to obtain the skills, relationships and market access they need to compete in this new world. Large companies are now exploring niches once thought too small to be profitable, while small ones are reaching out to global markets.

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The Exponential Growth of e-business

  • Worldwide e-commerce revenues will grow from $98.4 billion in 1999 to over $1.2 trillion by 2003.

  • 92 million North Americans presently use the Internet, 40% of the population over 16.

  • 55 million Americans shop online, and more than half of this group have purchased products through the Internet. By 2003, 183 million people around the world will buy products online.

  • More than 400,000 companies worldwide have an Internet address.

  • By 2002, 35% of travel industry sales will take place on the Internet or US $7.4 billion. Internet sales currently account for 11%.

  • By 2003, 9.7 million U.S. households will manage $3 trillion in assets online.

  • Online health commerce will reach $2.4 billion by 2003.

  • Other early adopters to e-business (based on estimated Internet sales in 2002) include book and software companies (10% of sales on the Internet), insurance (9%), music (8%), clothing (7%) and computer hardware (5%).

  • 35.2% of business-to-business Web sites are currently operating at a profit, with an additional 19.1% expecting to become profitable in the next twelve months.

  • The U.S. represents the largest portion of Internet users. By 2002, it is estimated that the U.S. will account for 40% of users and 63% of e-business worldwide.

  • Asia-Pacific will lead the growth in Internet users. Excluding Japan, the region currently has 3.8 million people online. By 2002, the figure will grow almost nine-fold to 36.8 million.

    Other rapidly growing regions include:

  • Western Europe, from 16.8 million in 1998 to 82 million by 2002, a 389% increase.

  • Japan, from 4.9 million in 1998 to 22.1 million by 2002, a 352% increase.

  • Other regions (combined), from 4.5 million in 1998 to 43 million by 2002, an 852% increase.

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