Irish most `bullish' about ecommerce

Ireland has emerged as the European country with the greatest expectations for the growth of electronic commerce, with the introduction of the euro expected to facilitate this growth rather than drive it.

The findings of a new survey conducted for business consulting and IT services company, Cap Gemini, found companies here to be the most "bullish" in terms of their expectation of an increase in e-commerce.

"This may reflect the fact that e-commerce represents a major opportunity for Ireland as it overcomes many of the disadvantages which we may have, being located on the periphery of Europe," said Mr Noel Crowley, EMU programme manager for Cap Gemini in Ireland.

The report, "EMU Threat or Opportunity?", concluded electronic commerce will be influenced by the need for more efficient, lower cost distribution networks, and growth will be dependent on the acceptance by consumers of the Internet as a sales channel.

EMU will not be a defining factor in the growth since currency differences are not widely perceived as a major barrier to electronic sales. But for those companies already trading through electronic channels, EMU will further refine the trading relationship.

Recent research has shown that price is the major driver of international online shopping, so from a consumer perspective if EMU provides price transparency when considering an online purchase, this has to be of benefit to the consumer.

The survey suggests that customer take up of "virtual" channels, rather than the removal of multi-currencies, will be the driving force in any e-commerce breakthrough.

It also found that Ireland appears to lead Britain in its preparedness for EMU, but lags Germany, France and the Benelux region. Fifty per cent of Irish companies consider themselves to have a high or very high state of preparedness for EMU compared with 69 per cent of Benelux companies, 65 per cent of German and 53 per cent of French.

Just more than a quarter of respondents said they expected that Europe-wide price transparency to come with the introduction of the euro would have a major impact on customer purchasing patterns. An interesting anomaly also showed that even though only 24 per cent of companies anticipated an increase in foreign competition, 42 per cent expressed their own intentions to begin competing abroad.

The survey also concluded that where the introduction of the euro is concerned, government intervention in sensitive areas like price rounding is welcomed, but generally market forces are felt to be more effective than legislation. Less than half of those surveyed predict more brand internationalisation, seeing this trend as independent of EMU and more symptomatic of general globalisation.

The survey of 131 companies from "consumer facing" industries in Britain, Ireland, France, Germany and Benelux, was conducted last March by RS Consulting for Cap Gemini. Interviewees were typically chosen from director level.