*Government, Regulation Pressuring E-Commerce Growth, Speakers Warn

LOS ANGELES–The Internet promises abundant growth in the coming years, but the forces of government and regulation are pressing on several fronts, DMA president/CEO H. Robert Wientzen told 800 online commerce aficionados at the DMA net.marketing conference here yesterday.

While acknowledging that Web use estimates vary, Wientzen said the number of surfers reached 150 million last year, up from only 3 million in 1993, and in four years, the number could swell to more than 300 million. Online sales hit $4.7 billion in 1998, growing 135 percent from the year before.

“Five or six years ago, e-commerce was pretty much nonexistent, and now, it’s projected that worldwide online sales for consumer and business-to-business sales combined could hit $3.2 trillion in another four years,” he said.

Taxation of Internet sales, consumers’ disdain for unsolicited bulk commercial e-mail and privacy concerns remain threats to the health of business carried out through electronic media, Wientzen said. He reiterated the DMA’s opposition to blanket opposition of unsolicited commercial e-mail, saying the organization sees spam as a “First Amendment freedom of commercial speech issue.” The DMA expects to have a free, global name-removal service for consumers available online soon.

Privacy is a global issue, Wientzen said, citing the European Union’s Data Protection Directive as a particular threat to the unfettered growth of e-commerce. The act bars the export of personal information from an EU country to a destination country that doesn’t ensure adequate privacy protection. Domestic privacy bills are pending as well, spurred by often “sensationalized” stories like those surrounding Intel’s Pentium III and its ability to identify individual personal computers. Direct marketers must respond to customers’ privacy fears, Wientzen said.

“When it comes right down to it, what we’re talking about is customer trust,” he said.

Keynote speaker Dick Anderson, general manager of enterprise Web management at IBM Corp., spoke about Big Blue’s e-commerce experience of the last year, illustrating how the Web is becoming increasingly intertwined with the technology giant.

IBM, Armonk, NY, saw the value of its e-commerce transactions explode to $1.2 billion in December 1998, up from $35 million in January of the same year. IBM’s “e-procurement,” or the amount it spent buying goods online, reached $629 million in December 1998, up from nothing at the beginning of that year. IBM foresees procurement expenditures bulging to more than $12 billion in 1999, in the process saving the company $240 million in paper invoice costs.

Anderson seconded Wientzen’s contention that customer trust will determine the future of e-commerce. This means safeguarding customers’ personal information while maintaining business relationships with them.

“Because the potential for online marketing is so incredibly rich, the spotlight is on us to ensure we establish an environment conducive to trade. Let’s not blow it,” Anderson said.

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