Creative Idea Powerhouse

I’ve been following on the local e-commerce growing and path-making landscape. Personally I found it is easy for any supplier, corporate or merchant to built a virtual store-front, and announced that they are in e-Commerce and selling to its potential 1.5billions consumers online. It is so amazing that these people have a mindset that once their portal, store front are listed on the search engine like Google or Yahoo, the next thing there will be millions of people clicking through their store and make orders. Yes, it is so simple as 1-2-3 to be listed in Google, and any SEO company can give you value added services to be on first 3 page ranking too, with little investment you willing to pay. However, that’s just the marketing talk and to be very honest, I get the response from many virtual store owners feedback, it doesn’t sell.

In Taiwan or Japan, if you would like to be successful as a B2C or C2C merchant, there is a set of detailed courses for you to go through. The course cover from front page design, product photo appearance design, product keywords design, SEO, how to gain consumer’s trust … and they have a stack of facts and statistic to guide you on what consumers look for when come to online, and this value on education is what I see lacking still in local market. Even there are people giving talks, sharing knowledge on their personal experience, there is still lacking of environment that value these knowledge. We are still in the learning path where suffcient sacrifies and wastage investment in e-Commerce is needed until the industry is mature. Should I say this. Again and again I asked myself, which is the successful e-commerce site you aware in Malaysia that is really making big bucks? Yes you can blame that the Malaysia consumer market is relevant small where economic of scale may not be sufficient to kick a big brand, or our internet penetration rate is low, or even because our retail outlet rental rate is lower compare to Japan or HK or Taiwan causing that there are still many stores out there for people to have choice and perfer physical experiencial touch. Yes all these reasons are valid, valid enough for people to stay away from this big piece of cake. ASEAN market having more than 500mil people, an open untap market, high young generation that are ready to enter the market and soon to be the largest spending machanism to continue growing the countries’ GDP.

The challenge for e-Commerce not ready in Malaysia due to IT or penetration issues? For credit card, the 3D authorisation method is good enough and strong to protect merchants and consumers, the broadband infra is ready (in fact I don’t see how fast you need your broadband connection to be to place an online oder), we have high penetration rate for internet access, and yes, 3G and Wimax does help, e-commerce technology and platform, webpage design service is available widely and cheaply (in fact you can hire a part time freshie to get you a page for very very Reasonable cost to invest, with full shopping cart function, payment gateway etc.). If the government will put some effort to enforce cyber law and take real action to follow through the online trading fraud, and create a trustable trading environment, will this help?

By far, this is just the first step e-Commerce challenge for B2C. There are still many more challenges await ahead for those who are study for potential investment into this 1.5bil consumer market. Logistic, payment gateway, security, IT infrastructure scalability, and many more issues still remain a challenge to explore. Take an example on logistic challenge, Amazon announced its 14th record holiday season, with 72.9 items ordered every second, up from 62.5 last year. How many resources are needed to be in placed to process this huge orders spike during holiday season? nearly 73 orders coming in every one second when the clock tick once. The entire supply chain, the IT capacity to process all these, and payment gateway to verify, QC to ensure right item is shipped to the right person with lowest error (imagine 1% return rate due to human error in a day will cause more than 63,000 items rejected and the cost of this error in logistic itself will result losses of $630k a day)

The day that orders peaked was on December 15th, when 6.3 million items were placed into Amazon’s checkout carts. That number was up 17 percent from the peak order day in 2007 (December 10). With five fewer shopping days this season, orders shipped peaked at 5.6 million on a single day, up 44 percent from last year. Some of the best-selling items this year included Eyeclops night vision stealth goggles, the Nintendo Wii, Razor scooters, Samsung 52-inch LCD HDTVs, The Dark Knight DVD, and the Twilight Saga books by Stephanie Meyer. Amazon says it was able to ship 99 percent of all holiday items in time for Christmas.

How does this year compare to seasons past? Barclays analyst Doug Anmuth provides the following comparisons:

Peak items ordered on a single day

2008: 6.3M
2007: 5.4M
2006: 4.0M
2005: 3.6M
2004: 3.6M

Items ordered per second

2008: 72.9
2007: 62.5
2006: 46.3
2005: 41
2004: 32

Peak items shipped on a single day

2008: 5.6M
2007: 3.9M
2006: 3.4M
2005: 2.7M
2004: 2M+