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Entrepreneurs Hatching Their Business Ideas Online

eBay CEO and President Meg Whitman predicts an explosion in e-commerce usage will take place in the next three years, unleashing unprecedented opportunities for businesses of all shapes and sizes to succeed internationally

Users of the online trading platform eBay traded US$28 billion worth of goods last year. That breaks down to US$77 million per day or US$894 per second. Impressive as these figures are, Meg Whitman, CEO and President of eBay, reckons this is just the tip of the iceberg, as the number of online transactions is expected to skyrocket from 1.6 trillion in 2003, to 7.1 trillion in 2007.

"The Internet is fuelling an e-commerce explosion and shopping online is becoming completely mainstream," she says. "But perhaps what is most remarkable is the growth that is expected to take place in purchases online."

In 2003, an estimated 247 million people shopped online, and by 2007, that number is projected to swell to 524 million. That is good news for Hong Kong businesses, 50 percent of which actively conduct e-commerce. Speaking at the Chamber's Distinguished Speakers Series Luncheon on April 13, Ms Whitman said she also expects e-commerce usage in the SAR to grow twice as fast as anywhere else in the world.

"Perhaps the most surprising thing [about online trading] is how accessible it is to small- and medium-sized businesses," she said. "Before, we used to think only large companies would succeed with online trading. Now, the Internet has made it a level playing field."

For sellers, trading online removes the boundaries of distance and time.

Buyers benefit from the depth and breadth of products available. The minimal costs and efficiencies online trading produce also means that businesses can pass these savings on to customers.

Ms Whitman says eBay is at the centre of this global buyer-seller crossroads and charges a US$1.62 toll per transaction on its intersection. This year, the company expects to generate US$3 billion in revenue from its 95 million registered users who list between 5,000 to 6,000 items online per second.

Beyond sheer numbers, the widely acclaimed CEO said much of the success of eBay stems from the fact that people list goods either before or after their peak retail season.

Businesses unsure how customers will react or how much they are willing to pay for new products can test the market during the launch of a new product cycle. After the peak retail season, they can then off load what would in stores be considered obsolete merchandise as vintage products.

"Buyers and sellers just follow their passion for particular goods that they are looking for, and there is a small-town trust which is at work through interaction between individuals," she says.

Although most of eBay users are individuals, Ms Whitman says people are increasingly establishing trading companies on eBay.

"People are starting businesses on eBay and making a living on the site," she says. "This global platform allows users to grow internationally."

The challenges of shipping, customs, language and now tax issues for these virtual trading companies are being taken up by entrepreneurs offering eBay users service solutions.

"It is easier than ever before to start a new business on the Internet," she says. "eBay is opening up international trade to businesses of all sizes. It is not just the large companies that are succeeding, now it is little businesses that can have a window on the global marketplace."



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