The UK needs more e-commerce funding.

Why is the UK lagging in the developing world of online transactions?

Almost weekly The Sunday Times runs special features on the possibilities of electronic retailing. But the Brits are stuck behind the US, Canada, Germany and Japan as well as a host of smaller countries, in the online shopping league table.

A study conducted by the NOP earlier this year and published by the DTI's Information Society Initiative, details the UK position. A global average of 18% of companies operating web sites are selling goods and services via them. The UK has only 12%.

Part of the reason is shareholder short-termism - a scepticism for the idea of seeding this new market, a feeling that it would only cannibalise the existing market. Whatever they say, one thing is certain. If there are no British stores on the electronic high street, UK customers will look abroad.

Government could help by seed-funding thousands of small-scale retailers online, simply on the grounds that it would be good for exports, but that would not eliminate the need for big companies to take the risk with their own large scale operations. The last government did little to help online commerce beyond kind words.

The Japanese, by contrast, spent œ57m of public money on 19 projects including smart cards and electronic purses.

If corporate timidity is the main reason we are lagging behind the global market, successful American internet case studies (Amazon books, Peapod groceries) may show that the lack of success of early British attempts was because they were underfinanced.

BarclaySquare, for example, has made some brave statements, but issued no evidence that backs up their claims. The DTI report quotes the cybermall as claiming visits "have exceeded our wildest exepectations". Of 300,000 visits to BarclaySquare, 91% were from the UK, but member retailers said privately they were disappointed. Not surprising considering the lack of any development budget or publicity campaign until recently.

As part of a vicious circle, online timidity extends to the consumer as well, and only 1% of UK households have tried online shopping compared to 4% of US and 3% of German. The millenium is coming, but where are the great visionaries who will build the railroads of the 21st Century? Not working for UK retailers, that's for sure.



Nick Rosen is a director of Intervid, a new-media research and design company. He can be contacted on 0171 240 2200 or nick@intervid.co.uk.

Why is the UK lagging in the developing world of online transactions?

Almost weekly The Sunday Times runs special features on the possibilities of electronic retailing. But the Brits are stuck behind the US, Canada, Germany and Japan as well as a host of smaller countries, in the online shopping league table.

A study conducted by the NOP earlier this year and published by the DTI's Information Society Initiative, details the UK position. A global average of 18% of companies operating web sites are selling goods and services via them. The UK has only 12%.

Part of the reason is shareholder short-termism - a scepticism for the idea of seeding this new market, a feeling that it would only cannibalise the existing market. Whatever they say, one thing is certain. If there are no British stores on the electronic high street, UK customers will look abroad.

Government could help by seed-funding thousands of small-scale retailers online, simply on the grounds that it would be good for exports, but that would not eliminate the need for big companies to take the risk with their own large scale operations. The last government did little to help online commerce beyond kind words.

The Japanese, by contrast, spent œ57m of public money on 19 projects including smart cards and electronic purses.

If corporate timidity is the main reason we are lagging behind the global market, successful American internet case studies (Amazon books, Peapod groceries) may show that the lack of success of early British attempts was because they were underfinanced.

BarclaySquare, for example, has made some brave statements, but issued no evidence that backs up their claims. The DTI report quotes the cybermall as claiming visits "have exceeded our wildest exepectations". Of 300,000 visits to BarclaySquare, 91% were from the UK, but member retailers said privately they were disappointed. Not surprising considering the lack of any development budget or publicity campaign until recently.

As part of a vicious circle, online timidity extends to the consumer as well, and only 1% of UK households have tried online shopping compared to 4% of US and 3% of German. The millenium is coming, but where are the great visionaries who will build the railroads of the 21st Century? Not working for UK retailers, that's for sure.



Nick Rosen is a director of Intervid, a new-media research and design company. He can be contacted on 0171 240 2200 or nick@intervid.co.uk.



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