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September 17, 1999
A Balanced View Of An e-Commerce Future
Shanthi Shankarkumar in Chicago
"The biggest changes we are going to see in the next five years, is the third world jumping on the e-commerce bandwagon," says Professor Mohanbir Sawhney, the widely respected e-commerce guru.
"People ask me how big is e-commerce in India and I tell them we've got only two problems in India -- we can't ship the atoms and we can't ship the pits! There are no roads and telecommunications infrastructures. The infrastructure constraints both from a logistics standpoint and a telecommunications standpoint."
"As these issues start to get resolved, countries like India and China will find the full potential of e-commerce get realized," he continues. "When that happens we cannot even visualize their effects now. In the telecom side, the leapfrogging will take place when wireless, digital technologies and cable modems will be the first to be deployed."
Thirty-six-year-old Sawhney heads the department of e-commerce and technology at Northwestern University's J L Kellogg Graduate School of Management. The school was ranked the second best business school in the United States by BusinessWeek in its 1998 rankings.
In a wide-ranging interview with rediff.com, Sawhney talked about trends and challenges in the e-commerce world.
"In five years, the word e-commerce will be a foolish word. It will be just the way business is conducted," he said. "It will be like talking about the horseless carriage."
His endorsement of the power and reach of e-commerce, does not mean he gives it an A+ grade. On the contrary, Sawhney says some "sites are unusable, the navigation is illogical, delivery policies and privacy policies are not clearly spelt out. It is hard to find what is on stock and what is not. People use all five senses when they shop in a store.
"When you sit before a computer, except for sight and sound, you are stripped of the other sense. I believe that finally a hybrid version will evolve, the clicks and mortar version -- where you can see all the merchandise off-line but do the ordering and get information online. These are two parallel universes that will eventually collide."
However, with virtual window shopping, the online experience has become so technologically savvy and realistic that sometimes just two senses are sufficient for a shopper to decide what he wants. LLBean, for instance offers blowups of its shirts with such clarity that texture and weave can be almost "felt".
Bags sells luggage online. Again, the texture of the bags can be seen because of high-resolution digital photography. Landsend, another site, creates kiosks where your body gets scanned and measurements are stored, in Microsoft 's Carpoint web site you can walk through the interiors of a car in 360 degrees.
Sawhney cautions that that online shopping should not be all dazzle and no substance.
"I think that as broadband starts entering homes, you are going to see a whole new way of e-commerce applications and technology that will allow for more realistic shopping applications," he says. "But you've got to do it in a way that adds value to the shopping experience, not just by school technology that's almost useless."
Naturally, Sawhney dismisses predictions that e-books will herald the end of paper books. A prolific reader, he says, "I'm still waiting for the paperless office we were promised years ago. I'm using more paper than ever! It'll be a long time before people cuddle up with an e-book."
The mistake of e-book marketers is to address general purpose audiences, he says.
"For specialized applications like software user manuals, it makes sense to have it on e-book, because it is easier to look up, and update," he continues.
"Secondly, I don't think the display technology is there yet. There is an interesting thing that Xerox is manufacturing called e-ink which is essentially an electronic ink or screen which you can roll up and carry in your pocket. It is like paper but is plastic laminate and will contain millions of balls that are white on one side and black on the other. They can be magnetized to create images of very fine resolution that you can erase like an etcher's sketch."
Unless the technology is perfected, "You can't carry an e-book to the bathroom, the bedroom, the beach, the briefcase and the bus."
"Ultimately, I think e-books will go into niche markets like technical documentation."
With online shopping attracting so much attention, another aspect of e-commerce, business to business commerce is going largely unnoticed even though it is much bigger than the online merchandising.
Sawhney attributes it to lack of sex appeal. He elaborates: "One of the most interesting phenomena we are seeing is the emergence of third parties who mediate transactions between buyers and sellers in business markets. These are what we call 'hubs'. They are third party neutral players who are creating essentially online market places, examples being plasticsnet.com."
"Business to business commerce will be much larger, but it is one of those things which are less sexy, so people don't understand it," he continues. "In the scheme of things, sex appeal is inversely related to profit potential; if everyone knows about it then there is not much money to be made."
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