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Changing the Way Direct Marketing is Done Online

SINGAPORE – One of the strangely wonderful aspects of conducting direct marketing in the underdeveloped markets of Asia is that you’re not bogged down by inflexible, established ways of doing business.

Since a DM infrastructure doesn’t exist yet in most of Asia, “direct marketing as usual” can be anything but. When the basics are in place – such as phone lines, mail centers, printing facilities, databases, etc. – it all tends to be state-of-the-art.

Now there’s an increasing rate of adoption of e-commerce in Asia Pacific.

If 1998 heralded the arrival of the products of e-commerce in Asia, the lesson of 1999 will be that such products depend on the coordination, the concentration and hard work of an invisible back end.

If you want to do business on the Internet in Asia, you need to handle orders in any imaginable way – over the phone, the Web, via e-mail or fax, or by postal service.

In Asia, DM companies going online have found that the sticky process of working across dozens of countries in a multitude of languages can be daunting – especially while you’re taking care of credit card authorizations, routing one order to multiple suppliers, routing status updates from those suppliers to customers, and handling order cancellations and product returns.

Consumers new to DM in Asia and unfamiliar with the old ways of direct marketing expect super-fast turnaround online with intuitive ordering systems and the opportunity for safe payment transactions.

In my opinion, the biggest barrier for successful direct marketing online is the lack of capable suppliers who can handle back-end fulfillment. In the US, hundreds of e-commerce companies are outsourcing the back end to companies known as Web portals.

But who can provide that service in Asia?

Companies such as Commerce One provide electronic procurement applications that streamline traditional procurement by automating buyer and supplier transactions through the Internet. In Singapore, Singapore Telecom in June announced National Computer Systems will partner with Commerce One to service markets such as Australia, Hong Kong, India, Indonesia, the Philippines, Singapore and Thailand.

How can a direct marketing company distinguish itself on the Web in Asia? Simply by knowing more customers more intimately than the competition does, and by knowing how to use information about those customers as it becomes available. In Asia, Web portals will be better positioned than any other value-added reseller to gain this intimacy.

In Asia’s economic climate, the Internet proves particularly invaluable as a means of cutting costs, increasing efficiency and maintaining customer contact.

Some other barriers to conducting direct marketing on line in Asia include a lack of content in local languages like Mandarin Chinese, Bahasa, Tagalog etc. In addition, often there are frustratingly slow connections due to a lack of infrastructure to support the new technologies. Also, the high cost of online fees deters consumers.

Another barrier to direct marketing online in Asia is the low penetration levels. However, Internet service providers in Asia (excluding Japan) claim 10.5 million accounts, making it the fastest growing region in the world in terms of subscriber growth.

Singapore is exceptional with a current penetration rate of about 30 percent. Even in China, there are an estimated 1.2 million Chinese now online, according to the China Economic Times.

In February, the International Edition of Business Week reported The Hong Kong Trade Development Council is so convinced of the value of going online that it’s providing free Internet access to small companies there. Internet users in Hong Kong accessing the Web from home are approaching 1 million.

The barriers to online success will dissipate over time. When that happens, the issue will still be how quickly a company can package virtual inventory so it can deliver it quickly, allowing the marketer to sell anything, anytime, anywhere.

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