IDC Projects Growth For E-Commerce in Eastern Europe

At an International Data Corp. (IDC) conference held in Prague this week, experts predicted steady growth in the field of e-commerce for Eastern Europe, driven largely by regional IT market growth.

The Eastern European IT Forum 1999 – Strategy and Vision: The Challenge of Managing Growth in Transition, featured talks by regional industry executives, and critical discussion of a number of issues involving business and technology.

2001: An E-Commerce Odyssey

According to IDC, Eastern Europe is experiencing somewhat stagnant conditions currently, with crises in the Balkans and Russia, and the regional IT market is expected to remain static through the year 2000. Experts project significant growth by 2001, however, pushed in part by new technologies and solutions.

With the number of Russian Internet users to move from just under 1 million now — to over 3 million in 2001 — the overall numbers in Eastern Europe will skyrocket, possibly matching those that Western Europe hit in 1997. Significant obstacles to growth in the region include high online access costs, a small home market and the universal concern over security issues.

“Market Leaders of the Future”

Worldwide, there are a number of IT-critical issues, including e-commerce, which will see international growth to $1.3 trillion (US$), according to IDC. Other issues include a potential Y2K computer glitch, with only 13% of companies in emerging countries currently prepared to face “the millennium bug,” and skill shortages, with only an estimated 50% of positions being filled by qualified applicants.

Steve Frantzen, Managing Director of IDC Central Europe, stated that sources of IT market growth in Eastern Europe will include changes in IT technology, direct foreign investment, economic reform and growth and telecommunications development.

“In this changing business environment,” commented Gianni Messora, Vice President and Managing Director, BDG Group, Compaq Computer, “the enterprises, and the people who run them, that embrace and exploit the Internet for real e-business, will be the market leaders of the future.”

IDC Eyes E-Commerce in Latin America

IDC this week also released a study entitled “Latin America Internet and eCommerce Strategies,” predicting that revenue from online sales will reach $8 billion in the region by 2003. There will be approximately 175% growth in e-commerce revenue this year, however, down from a 1998 high of 361%.

“As the conduit to Web commerce, the Latin American extension of the information superhighway is more riddled with silver-lined potholes than it is paved with gold,” commented Annika Alford, Product Manager for IDC Latin America’s Internet Research.

“The potential is real, but many obstacles need to be overcome,” added Alford, including weak credit card processing infrastructures, the high cost of consumer Internet access, existing tariff barriers and logistical problems such as shipping issues.

According to an IDC statement, “because of these obstacles, while consumer Web users in Latin America are making online purchases, the heavier momentum is behind the corporations in and out of the region already investing in business-to-business commerce solutions.”

IDC is a division of International Data Group, specializing in IT media research.