Europe execs wary of e-commerce

European executives remain hesitant about jumping into e-commerce initiatives, according to a new report from Andersen Consulting.

2 min read
European executives remain hesitant about jumping into e-commerce initiatives, according to a new report from Andersen Consulting, which urges measures by both industry and European governments to boost online commerce.

In a survey of more than 300 European senior executives, Andersen found corporate leaders enthused about e-commerce's potential but wary about moving quickly to spend money on new systems.

Andersen, which does about a third of its $6.6 billion in revenues on the continent, believes European businesses' wavering could jeopardize the continent's long-term competitiveness.

"Europe has many things on its mind before e-commerce," said Steve Johnson, director of Andersen's e-commerce program, citing consolidation into a single market, the Euro currency, and Year 2000 problems as examples. "We think there's an opportunity for e-commerce as a potential way through that more urgent list."

Europe is perceived as lagging in Internet commerce for a number of reasons, Johnson said, including the cost of Net access in some nations, the dominance of English as the language of the Net, and a free alternative in France of the existing Minitel system.

"One other factor is the European approach to regulation. We sense a certain amount of waiting for government to act on security, privacy, encryption," he added, suggesting that Europe's private sector should take more initiative.

While 82 percent of executives surveyed think e-commerce will have a strategic impact on their businesses in the future, only 39 percent are acting on that belief today. Only 19 percent of those surveyed regard e-commerce as a serious competitive threat.

Andersen suggested several causes for the hesitation. Half of respondents blamed a lack of consumer understanding about e-commerce, and a majority see privacy, security, and the lack of a regulatory framework as key barriers.

More than 80 percent want governments to create a common international framework.

Still, the study identified several European advantages in Net commerce, including the broad use of smart cards, credit card-sized plastic cards with a computer chip embedded. Smart cards are seen as both a security device and a way to store personal data or electronic cash.

France's Minitel online system has long let consumers pay bills, shop, and order train tickets online. Andersen also cites Europe's lead in use of digital mobile telephony and a strong position in e-commerce applications for digital TV and Web phones.

Urging quick action, Andersen outlined recommendations for both the government and the private sector.

Businesses should cater to customers individually using one-to-one marketing, utilize new intermediaries and distribution channels, form online ties with suppliers and business partners, and make major investments in marketing, technology, and research, according to the report.

European governments need to work with businesses to create a regulatory regime that facilitates global e-commerce, encourages new venture capital markets, adopts e-commerce itself, ensures adequate training and retraining, and promotes e-commerce with both business and the public.

The survey was conducted between December 1997 and July 1998 among European senior executives.