International Wireless Technologies and Markets
Over 300 million people outside the United States have cell phones, with the number rapidly
increasing each month. [*** “Top International Wireless Markets 2000"
<www.refreq.com/Facts_Stats/Top_intmarket.htm>***] Exact figures
vary, but by all analyst accounts, it is an explosive market. In this section, we consider major
wireless markets outside the United States, as well as some developing markets.
e-Fact 9.7
According to the Canadian Wireless Telecommunications Association (CWTA) 50 per cent
of all calls in the world will be wireless by 2005. [*** “Wireless Facts,” <www.cwta.ca/
industry_guide/facts.php3>***] 9.7
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9.4.1 Asia and the Pacific
Asia has one of most advanced wireless markets. Over 200 million wireless users reside in
the Asia-Pacific region, more than in the European Union. In South Korea, Taiwan and
Hong Kong, there are more mobile subscribers than wireline subscribers. Although parts of
Asia have widespread adoption, some regions of Asia are still untapped. China, for instance,
has over 46 million cell-phone subscribers, but this market penetration is still only
a small percentage of China’s one billion plus population. (Fig. 9.1). [***W. Bratton,
“Asia Breathes Mobile Fire,” Financial Times 6 December 2000: 32***]
e-Fact 9.8
According to a Management and Coordination Agency (MCA), 59 percent of Japanese high
school juniors have their own mobile phone. [***W. Auckerman, “Survey Shows Cell
Phone Secrets of Japanese Youth” Asia Wireless News 2 January 2001, <asia.internet.
com/wireless/2001/01/0102-japan.html>***] 9.8
Japan is a world leader in wireless technologies and cell-phone adoption. NTT
DoCoMo announced the May 2001 launch of the world’s first 3G mobile communications
service called the Freedom of Mobile Multimedia Access (FOMA). The May 2001 estimate
may be optimistic, considering DoCoMo’s announcement that only two out of the 11 contracted
handset manufacturing companies will be able to deliver 3G handsets by
DoCoMo’s deadline. [*** “Handsets Not Ready for DoCoMo’s 3G Launch,” Communications
Update <www.citpubs.com/commms/130301.htm> 13 March
2001.***] [***W. Bratton, “Asia Breathes Mobile Fire” Financial Times 6 December
2000: 32***]
e-Fact 9.9
According to the Telecommunications Carriers Association, half of the Japanese population
carries a cell phone and approximately 10 percent of the population uses cell phones to access
the Internet. [***S. Phan, “Who Needs a PC?” Business 2.0 14 November 2000:
52.***] 9.9
China is the second largest Asian wireless market by number of subscribers, even with
its single-digit market penetration. The Chinese government is debating what standard it
wants for its cell-phone market. [***A. Hamilton, “The China Syndrome” Red Herring
13 February 2001: 48***]
In December 2000, two out of three available South Korean 3G licenses were awarded.
The South Korean government is also trying to establish a standard technology, and expects
to decide by 2002. [***M. Williams, “South Korea Awards Two 3G Licenses,”
<www.e-business.com/english/crd_korea_320005.html> 18 December
2000. ***]
More than half the population in Taiwan are cell phone subscribers, ranking it eleventh
in the world market. [*** “Top International Wireless Markets 2000"
<www.refreq.com/Facts_Stats/Top_intmarket.htm>***] In December
2000, Taiwan announced that it would issue three 3G licenses. At the time of the announcement,
the Taiwanese government had set no timetable for issuing the licenses. [***
“Taiwan May Auction Three 3G Licenses,” 3G Newsroom.com
<www.3gnewsroom.com/3g_news/news_0086.shtml>***]
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Indonesia and India also have available markets. [T. McCawley, “Telekom, Indosat
Cut Cross-Holding Ties” Financial Times 16 February 2001: 18***] India is a large
potential market for cellular phone service. For a population of almost one billion people,
there are only 28 million wireline phones and three million mobile phones. Indians have
not bought into the wireless market as quickly as providers had hoped. The popular mobile
service is the inexpensive limited mobility service—subscribers with this wireless service
can use it within a 50 meter band and not outside of a region. [***C. Daniel, “Big Struggle
to Deliver Mobiles to the Masses” Financial Times 21 February 2001: 17***]
Fig. 9.1 Top Asian/Pacific cell phone markets. [***”Top International Wireless
Markets 2000" <www.refreq.com/Facts_Stats/
Top_intmarket.htm>***]
9.4.2 Europe
Europe leads in mobile phone market penetration (Fig. 9.2). Because of cell-phone popularity,
Europe’s cell-phone market has been lucrative. This profitability is one of the reasons
that companies spent $100 billion in the year 2000 3G license bidding and why
European wireless companies are active in the worldwide market. Finland is at the forefront
of research and development by modeling an entirely wireless community.
Britain’s Vodafone is the world’s largest wireless provider. Vodafone is involved in
markets in Europe, United States, Asia/Pacific, Middle East and Africa. The company is
moving to expand its wireless data offerings, and it has partnered with France's Vivendi to
develop the Vizzavi Internet portal, a wireless Internet portal. [*** “Vodafone Group
PLC,” Hoovers Online <www.hoovers.com/co/capsule/2/
0,2163,47982,00.html>***]
Italy, at one time thought to have been left behind in technology, has embraced mobilephone
technologies. By 2000, more than half the Italian population had a cell phone (Fig.
9.2). Italians under 24 years old make up 31 percent of the market, and 9 percent of users
are over the age of 55. [***A. Walker, “The Old World Embraces the New,” Near Magazine
September 2000: 7***]
Telefonica Moviles, the wireless unit of Telefonica of Spain, has 22 million subscribers
worldwide. In 2000, the company invested in licenses in Germany, Italy, Austria
and Switzerland. Moviles has an extensive subscriber base in South America. [***L.
Crawford “Moviles Looks to South America for Most Growth,” Financial Times 27
February 2001: 20.***]
Country Subscribers Penetration
Japan 57.95 43.4
China 46.5 3.7
South Korea 27.5 53.3
Taiwan 11.45 51.6
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Sweden’s Ericsson has 30 percent of the world market of existing wireless systems,
and a 50 percent share of new contracts (as of November 2000) to develop 3G networks
and technologies. Ericsson has also purchased or bought into 16 of the 21 European 3G
licenses that had been given up to November 2000. [***R. Evans, “Mixed Signals,” Barrons
27 November 2000: 17.***]
e-Fact 9.10
According to IDC, the number of Americans with Web-enabled telephones will grow from 8
million to 40 million by 2003. [***B. Cohn, “No Strings Attached” The Industry Standard
November 2000: 5.***] 9.10
In 2000, the number of Czechoslovakians with cell phones surpassed the number using
wireline telephone service. Reportedly, the number grew from 19 percent to 43 percent by
the end of 2000, and is expected to reach 55 percent by the end of 2001. [***R. Anderson,
“Target Price Set for Mobile Licenses” Financial Times 15 February 2001: 20***]
Helsinki, Finland is the home of the Helsinki Virtual Village, a testing ground for wireless
products and services. By 2005, 5,000 households and 1,000 companies will be using
wireless phones and other devices incorporated into their lifestyles. Mobile phones will be
connected to home appliances. Residents will contribute to virtual community forums, participate
in church services via a virtual chapel and cell phones will act as a combined PDA
and PC. [***V. Maheshwari, “Virtual Village Project: Test-bed for the ‘Smart’
Phones,” Financial Times <www.ft.com/ftsurveys/country/scef92.htm>
2000***] Finland’s cell phone penetration is reported as high as 75 percent. [***B. Cohn,
“No Strings Attached” The Industry Standard November 2000: 5.***]
Fig. 9.2 Top European cell phone markets. [***”Top International Wireless
Markets 2000" <www.refreq.com/Facts_Stats/
Top_intmarket.htm>***]
9.4.3 North, Central and South America
Excluding the United States, three countries in North America, Central America and South
America are in the top 20 cell phone markets (Fig. 9.3), despite having immature wireless
markets.
Country Subscribers Penetration
Italy 31.1 52.2
UK 25.5 42.9
Germany 25.0 30.2
France 21.1 35.5
Spain 16.4 41
Turkey 9.2 14
Netherlands 7.1 44.9
Sweden 5.4 60
Portugal 4.8 47.8
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e-Fact 9.11
International Data Corp. (IDC) reports that Brazil’s mobile phone subscriber market will
grow 25 percent a year through 2004. [***E. Brown, “Brazil Takes to Wireless,” m-Business
January 2001: 34***] 9.11
The Canadian cell-phone market is forecasted to grow at 20 to 30 per cent per year.
This equals a market of 16.6 million subscribers by 2003 according to Toronto’s International
Data Corp. (Canada). [*** “Wireless Facts,” CWTA Web site <www.cwta.ca/
industry_guide/facts.php3>***]
Central America has been slow in embracing cell-phone technology. Guatemala, for
example, has one of Central America’s stronger economies, but only 5 percent of its population
owns a cell phone. [*** “Datafile of Latin America Telecommunications: Guatemala,”
CIT Publications January 2001 <www.citpubs.com/lata/
jan2001.htm>***]
South America is a particularly attractive market for foreign investment. For instance,
Spain’s Telefonica Moviles reported a 47 percent increase in Latin American subscribers,
adding nine million customers in Latin America in 2000. [***E. Daily, “Spanish Wireless
Profit is Up,” New York Times 27 February 2001: W1.***] Brazil is the largest South
American cell-phone market (Fig 9.3). Major players in Brazil’s market are the U.S.’s Bell-
South, Telecom Italia, Telesp Celular, Global Telecom and Telefonica do Brasil. [***E.
Brown, “Brazil Takes to Wireless,” m-Business January 2001: 35-36.***] Argentina’s
Comision Nacional de Comunicaciones (CNC) eased licensing regulations and opened the
spectrum market in November 2000. [***L. Crawford, “Moviles Looks to South
America for Most Growth,” Financial Times 27 February 2001: 20.***]
Fig. 9.3 Top North and South American cell phone markets. [***”Top International
Wireless Markets 2000" <www.refreq.com/Facts_Stats/
Top_intmarket.htm>***]
9.4.4 Australia and New Zealand
In 2000, Australia had 7.8 million cell-phone subscribers, 40 percent of its population. The
government’s Communications Authority announced that it will auction 3G licenses in the
first city-by-city auction. The intent is that wireless operators would enter into agreements
regarding roaming services with operators from other regions rather than not offering roaming
services. The government announced that the revenue target for the licensing auction
was $2.6 Australian. The largest wireless operators in Australia expected to vie for the licensing
are Telstra, Telecom Mobilnet and Optus. [*** “Australia Cuts 3G Into City
Country Subscribers Penetration
Brazil 14.4 8.3
Mexico 8.7 8.6
Canada 7.0 22.4
Argentina 4.7 12.7
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Units,” 3G Newsroom <www.3gnewsroom.com/3g_news/news_0062.shtml>
11 December 2000***]
In New Zealand, four companies won 3G licenses in an auction that lasted over 6
months and involved over 400 bidding rounds. Telecom New Zealand, British Telecom’s
Clear Communications, Vodafone Mobile New Zealand and Australia’s Telstra Saturn
were the successful bidders. The auction earned the government approximately $23 million.
[***K. Griggs, “Kiwi Spectrum Finds a Home,” Wired News <www.wired.
com/news/printe/0,1294,41278,00.html> 18 January 2001***]
9.4.5 Africa
African countries are attracting foreign investors by developing wireless infrastructure and
technologies for their populations. [***J. Drummond, “North Africa’s Mobile Connections,”
Financial Times 1 February 2001: 20.***] During 1997 and 1998, almost 20 new
cell-phone networks began operation. In 1997, more than half the new phone subscribers
signed up for cellular service. [***M. Minges, “African Communications and Information
Technology”, MBendi Information for Africa <www.mbendi.co.za/indy/
cotl/af/p0005.htm>***]
Morocco was the first African country to offer an additional 15-year GSM license to a
private company. It was purchased by Spain’s Telefonica Moviles and Portugal’s Telecom
and a consortium of Moroccan-based Banque Marocaine du Commerce Exterieur and the
Afriquia group. The consortium created Meditel, a cell-phone operator, in March 2000.
Tunisian and Algerian governments have announced that they will offer GSM licences in
2001 or 2002. [***J. Drummond, “North Africa’s Mobile Connections,” Financial
Times 1 February 2001: 20.***]
South Africa is in the top 20 of worldwide wireless markets. It has 5.3 million cellphone
subscribers, which represents a 12.2 percent market penetration. [*** “Top International
Wireless Markets 2000" <www.refreq.com/Facts_Stats/
Top_intmarket.htm>***] One estimate is that 250,000 new subscribers enter the
market each month. The country offered three 3G licenses for bidding in a process that took
over 18 months. Vodacom and Mobile Telephone Network are the major wireless operators.
[*** “Controversy Surrounds Third South African Mobile License Award,”
Communications Update <www.citpubs.com/comms/020800.htm> 2 August
2000***]
9.5 Creating an m-Business with Global Capabilities
Globalization is an excellent opportunity for businesses, but it is also an ambitious and expensive
investment that does not guarantee increased revenue. Global m-business is still in
its formative stages. Other than SMS, specific applications that work on a wide variety of
wireless devices from anywhere are not on the market. This section focuses on the topic of
launching a global business, while raising wireless-specific issues. We discuss m-business
in detail in Chapter 2, m-Business.
Before companies decide to operate overseas or create an international application,
they should ask themselves whether the revenues they gain from expansion will cover the
costs involved and whether other cultures will react positively to what the companies sell.
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In this section, we begin to develop guidelines for evaluating international opportunities
and transforming businesses into global businesses.
9.5.1 Choosing an International Market
Once a business has chosen to pursue globalization, it must target markets. Initially, it is
advisable for a business to focus its time and money in one or two key markets until it experiences
some success. [***T. McCollum, “Foreign Affairs,” The Industry Standard 7
August 2000: 175.***]
While researching various possibilities for taking a U.S.-based business into the global
marketplace, a good beginning is to check with the business’ Web host and ask for a copy
of the site’s access logs. The access logs track Web surfers from foreign domains that have
accessed the site. [***S. Tapper, “Is Globalization Right for You?” Webtechniques
September 2000: 26.***] This would provide a starting point in researching international
markets that are appropriate for the business.
It is important to research a business’ potential competitors. In locations where other
companies have entered a market that may be appropriate for a product, visit their Web sites
and evaluate the status of their products and efforts. If the market is saturated with similar
applications, search for another country or region with less product saturation. When
deciding on a market, factors such as the number of wireless subscribers, Internet and technology
usage rates, per capita income and consumers’ probable expectations of the business
must be considered.
Determining future business demand requires more extensive research than determining
current demand. Research resources are available on the Web and through other
media. Visit Web sites such as the U.S. International Trade Administration’s Office of
Trade and Economic Statistics (www.ita.doc.gov/td/industry/otea). It is a
thorough site with monthly foreign trade data and a foreign trade reference page. Idiom
Inc.’s site (www.idiominc.com) contains information that allows users to search for
articles and information pertaining to specific foreign markets and topics. Internet statistics
segmented by language are available at the Global Reach site (www.glreach.com/
globstats/index.php3). Internet usage statistics are relevant to m-business because
they denote technology-savvy users. Specific wireless information is at
www.refreq.com, which offers links to other relevant sites to learn more about the
development of m-business internationally. The U.S. Office of Telecommunications Technologies
Web site (telecom.ita.doc.gov) tracks information by regions and industries
and provides statistics. Other possible sources include data from the U.S. Department
of Commerce, the United Nations and various research firms. Be aware that smaller, less
obvious markets are sometimes better choices for marketing specific products.
To create a business with a truly global reach, a company should develop separate Web
sites. The Web sites should be geared toward different countries and cultures. The .com
domain name is the most universally recognized on the Web. Some companies connect
country-specific sites as links from the main page of a .com domain Web site. This option
can make a business seem truly global. However, foreign consumers may locate a Web site
more easily if it is registered and hosted in their own country. For this reason, registering a
new domain name ending with the local country name extension is often advisable. [***S.
Tapper, “Is Globalization Right for You?” Webtechniques September 2000: 26***]
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Domain-name registration in foreign countries is often more complex than registering
a .com domain in the U.S. It may require owning a trademark or incorporating your business
in the foreign country. [***L. Hakan Sjoo, “Set Up Shop in Europe,” e-Business
Advisor February 2000: 21.***] Even if a business is not planning to launch international
Web sites immediately, registering a domain name for the company in foreign markets can
help avoid cybersquatters and problems obtaining the domain name later. For information
on registering foreign domain names, visit the Web site of the Internet Assigned Numbers
Authority (IANA) at www.iana.org/cctld.html. NetNames (www.netnames.
co.uk) is the largest global registrar of domain names; their site allows users to
search for the availability of specific domain names and register those names in domains
worldwide.
9.5.2 Internationalization and Localization
Globalizing content and products comprises two major steps: internationalization and localization.
Internationalization involves restructuring the business software so that it can
process foreign languages, currencies, date formats and other variations involved in conducting
global business. [***H. Schwartz, “Going Global,” Webtechniques September
2000: 54.***] To accept and fulfill orders in German or Japanese, the business database
will have to be restructured to accommodate those languages. International software must
be compatible with 16-bit character encoding systems and other international computing
standards. Unicode (www.unicode.org ), a 16-bit encoding system that assigns a
unique number to almost every character in every language, enables the system to handle
iconic languages such as Chinese, Japanese or Korean. [***J. DiSabitino, “Web Site Globalization,”
Computer World 10 July 2000: 56.***]
Localization includes the translation and cultural adaptation of the site’s content and
presentation. Understanding and applying appropriate conventions is imperative. A variety
of translation options is available to companies that have different expectations and budgets.
Some services and software are designed to automate the translation. The Enterprise
Translation Server from Transparent Language (www.transparentlanguage.com)
allows customers to click on a link from the Web site and view the site translated into various
languages. Transparent Language’s Web site offers a free demonstration that allows
viewing of any Web site in the specified language. Alis Technologies (www.alis.com)
offers a similar solution called AutoTranslate . Netscape Navigator 6 uses this solution;
users can go to the View Menu and select Translate to view any Web site in another language.
Logos (www.logos.it) (see the Logos Group, Italy feature) and AltaVista’s
Babelfish (www.babelfish.altavista.com) also offer fast translations. This technology
can be useful, especially for real-time customer-service or e-mail inquiry translation.
Be aware that translations are normally not perfect, so mistakes could result in
misunderstandings.
e-Fact 9.12
Providing information in more than one language is key to conducting business globally; according
to Forrester Research, consumers are three times more likely to purchase products
or services from a Web site presented in their native language. [*** H. Schwartz, “Going
Global,” Webtechniques September 2000: 54***] 9.12
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Because machines cannot be relied upon to translate grammar, idioms and humor correctly,
human translators should be hired to create a complete foreign language Web site.
A bilingual translator and an editor should be employed, preferably ones living abroad and
aware of cultural variations, terminology, market trends and other regional issues. [***H.
Logos Group, Italy [***<www.logos.it>.***]
Logos (www.logos.it), an Italian translation company, provides various services
including an online language translation dictionary. This multi-lingual e-translation
portal can translate any typed word or phrase into many different languages (Figs. 12.2
and 12.3). You can also click on a button to hear how a word is pronounced. If you are
not sure how one of the translated words is used, Logos’ Wordtheque demonstrates the
word in context. From here, you can click on the Word Exchange Forum, where professionals
around the world help you with difficult words or phrases.
Fig. 9.4 Logos dictionary query page with the English word “why” translated
into several other languages. (Courtesy of Logos Group, Italy.)
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Schwartz, “Going Global,” Webtechniques September 2000: 57.***] Translators
familiar with the context of the information are also desirable, especially if the content is
technical in nature. [***J. Yunker, “Speaking in Charsets,” Webtechniques September
2000: 62.***] Aquarius (www.aquarius.net), an e-marketplace that connects businesses
with freelance translators and translation agencies, is an excellent resource to locate
translators for most foreign languages (Fig. 9.5).
Aquarius.net [***<www.aquarius.net>***]
Fig. 9.5 Aquarius.net translator search. (Courtesy of Language Networks
BV.)
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Even trained translators may not solve all the problems when localizing a Web site’s
content and design. When considering the design of a foreign-language site or wireless
application, be aware that European language translation can expand English text up to 40
percent in length. Asian languages require slightly less space than equivalent English text.
[***J. Yunker, “Speaking in Charsets,” Webtechniques September 2000: 62.***] Site
layout and application interfaces must be adapted to accommodate languages which are
read vertically, such as Chinese, or those which read right to left, such as Hebrew. The language
in which text appears also affects the appropriate font size. For example, although
text size can reduce to fit more information on a page, languages such as Japanese are difficult
to read clearly in an 8-point font. [***J. DiSabitino, “Web Site Globalization,”
Computer World 10 July 2000: 56.***] This is especially vital if the information is presented
on smaller mobile device screens.
Localization must also consider the cultural associations of colors in different parts of
the world (Fig. 9.6). It is important to realize that cultures and religions view colors differently
and the use of color can affect the way consumers view your site and make their purchasing
decisions. For example, if a business has a Chinese audience, it may include red,
which signifies celebration and good luck in Chinese culture. Americans commonly relate
green with money, but people from countries where money is printed in other colors will
not make the same connection. Blue is viewed positively in most cultures and is the best
choice for global business interfaces. [***J. DiSabitino, “Web Site Globalization,” Computer
World 10 July 2000: 56.***] Few existing wireless devices support color, but the
next generation of devices will, so knowledge of cultural differences with respect to color
is still important.
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Fig. 9.6 eBay’s Chinatown site uses a red background signifying celebration and
good luck. (These materials have been reproduced with the permission
of eBay Inc. COPYRIGHT © EBAY INC. ALL RIGHTS RESERVED.)
Content also needs to be localized. Content of foreign sites should be as linguistically
and culturally neutral as possible. [***J. DiSabitino, “Web Site Globalization,” Computer
World 10 July 2000: 56.***] It is best not to use American slang, idioms, and specific
examples from American or Western culture; for example, if a business is selling hot
dogs in China, avoid content about eating hot dogs at a football game or at the mall.
Companies should also consider adapting icons and logos for the targeted foreign culture.
The most common example of a business that uses a culturally specific icon is
America Online ( www.aol.com), whose trademark mailbox icon is understood by Americans
to signify mail, but it is not a recognized symbol in all cultures. As a result, America
Online has replaced the mailbox logo with a more universally recognized envelope on its
French site (www.aol.fr) and with a picture of a typical European mail box on their
German site (www.aol.de). However, other international America Online sites, such as
that servicing Japan (www.jp.aol.com), retain the original mailbox logo. Companies
must weigh the benefits of offering recognizable symbols to their customers against the
costs of sacrificing brand association.
International customers will be hesitant to buy a product if they do not understand the
pricing information. Make sure that prices are available in the local currency or that the
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exchange-rate information is available. Offer customers current and accurate exchange-rate
information by linking a site to an online currency conversion service. For an example, visit
the Olsen & Associates’s site ( www.oanda.com). [***B. Sawyer, D. Greely and J. Cataudella.
Creating Stores on the Web: 2nd Edition. Berkeley, CA: Peachpit Press,
2000: 314.***]
Researching the predominant culture, customs and business practices of the area into
which a business is expanding is important to localization. However, to create global
branding, or recognizable business identity, localized Web sites should retain the overall
look and feel of the company. If a company intends to use complex graphics and streaming
media, be aware of the visitor’s ability to download this material, especially given the limitations
of many mobile devices.
Experts often categorize information available on Web sites as global, regional or local
content. Global content refers to information and design that requires translation, but is
essentially the same for all cultures. This typically includes logos, trademarks and company
history and mission. Regional content, such as product and marketing information, is usually
written once in English and then adapted for various markets. Material on specific
regional pages that appears only on that Web site, such as regional promotions, pricing,
delivery and store or office locations, is called local content. [***H. Schwartz, “Going
Global,” Webtechniques September 2000: 56.***] This division can help balance cultural
adaptation with consistency throughout all markets. It is also a useful tool in managing
and distributing responsibility for updates of content. It is advisable to inform users if certain
sections of a foreign Web site have not been localized, so they will not be mislead.
[***O. Lagon, 50***]
Fig. 9.7 Various America Online icons. (AOL screenshots copyright © 2000
America Online, Inc. Used with permission.)
For businesses that prefer to outsource localization, several companies offer translation
and localization solutions. Localization services specialize in adapting Web sites and
content for other cultures, and they address a range of issues that extend beyond simple
translation. eTranslate specializes in end-to-end globalization solutions. Businesses can
outsource the entire globalization process to eTranslate (www.etranslate.com),
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which consults with the client to create customized technology integration, translation and
content adaptation for the client’s foreign Web sites. After the foreign site is created,
eTranslate translates the site directly back into English, allowing clients to see how localization
has affected the content. [***P. Musich, “A Small World, After All,” eWeek 21
August 2000: 27***] General Electric Co., one of eTranslate’s clients, has experienced a
27 percent increase in lead generation for its information portal after eTranslate created
Web sites for the portal in German, Japanese, Chinese and Korean. [***P. Musich, “A
Small World, After All,” eWeek 21 August 2000: 27***] Other companies that offer similar
globalization software and services include Bowne Global Solutions (www.bowneglobal.
com), GlobalSight (www.globalsight.com), Idiom
(www.idiominc.com), Lionbridge Technologies (www.lionbridge.com) and
WorldPoint Interactive (www.worldpoint.com).
9.5.3 Partnering and Hiring
A local, brick-and-mortar presence gives a company an important advantage. Many foreign
businesses partner with existing companies in foreign markets. Local partners provide other
advantages, including a physical presence in the target country, a recognized brand, extensive
knowledge of the target market and localized content and customer service. Yahoo
(www.yahoo.com) is an American Internet portal that has successfully penetrated many
foreign markets. Yahoo is currently ranked first in Internet traffic in Japan and the United
Kingdom, and the portal attributes its popularity to the more than 300 partnerships it has
created with local content providers worldwide. [*** S. Syre and C. Stein, “Crossing the
Ocean Still a Crucial Test,” The Boston Globe 21 July 2000: C10. B. McCarthy, “All
E-Business is Global,” InformationWeek 5 June 2000: 204.***]
If a business chooses to build a local presence and hire foreign employees, it must educate
itself about local employment practices. Consulting firms that specialize in employee
relations are available online. If a business expands beyond a single country or region,
hiring employees who are proficient in more than one language is advisable.
9.5.4 Payment Systems
When transacting business in another part of the world, it is important to localize the company
payment system to accommodate foreign customers. In the United States, many online
goods and services are purchased with credit cards; some businesses do not offer
alternatives to credit-card payment. However, credit cards are less common in other parts
of the world no matter the individual’s economic status because of infrastructure and trust
issues. When planning expansion into a particular market, investigate the payment systems
used by the most established e-businesses and m-businesses there. What percentage of online
sales at these sites are made with credit cards? What alternative payment methods are
used?
e-Fact 9.13
Only approximately 30 percent of Europeans have credit cards, and many feel uncomfortable
revealing credit-card numbers over the telephone or Internet. [***T. Mullen, “Service Aids
Selling to Europeans,” InternetWeek 17 July 2000: 13.***] 9.13
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Businesses in Europe should offer a c.o.d. (cash on delivery) option and should consider
other means of monetary transfer that do not involve credit cards. Giros (wire transfers
between bank accounts) offer an alternative for companies that work in some northern
European countries. [***L. Hakan Sjoo, “Set Up Shop in Europe,” e-Business Advisor
February 2000: 20.***] However, giros sometimes require that customers send authorizations
through the mail, which slows the transaction process. DirectDebitë™, a new e-payment
service from an American company called EuroDebit, enables electronic debits from
European customers’ bank accounts to be sent to merchants’ bank accounts for a small fee.
DirectDebit is currently available only in Germany, but the company is negotiating with
banks to offer the service in Austria, Belgium, the Netherlands, Switzerland, Luxembourg,
Sweden and the United Kingdom. [***T. Mullen, 13.***] Additionally, forms of electronic
cash have been developed for use in e-commerce and m-commerce transactions. For
further discussion of payments, see Chapter 5, Wireless Payment Options. In the near
future, one or more of these systems may be used internationally and enable simpler monetary
exchange between parties involved in global m-commerce.
9.5.5 Distribution
Conducting international business successfully often depends on distribution methods.
Does the country have the infrastructure in place to support the business on a broad scale?
What kind of distribution channels reach consumers? What are the shipping costs to the
various countries?
When shipping within foreign countries or regions, investigate local distribution
options. For example, because there is no integrated postal system serving the European
continent, choosing the most appropriate delivery system for European customers can be
confusing.
If a business is shipping within one European country, the best solution may be offered
by that country’s national postal service. Even when shipping between countries, national
postal services often have partnerships with other companies and services that ensure fast
and affordable delivery. Information about the British Post Office is at www.postoffice.
co.uk and the Deutsche Post at www.post-ag.de (which can be viewed in
either German or English). The United States Postal Service ( www.usps.com) also offers
international shipping services. To locate shipping options in other areas of the world,
research national postal services and local couriers.
If a business enters multiple international markets, creating regional distribution centers
may be impractical. In this case, a well-established international shipping and handling
company may offer the best solution. Two United States’ companies, Federal Express
(www.ups.com) and UPS (www.fedex.com) offer service to most European nations,
but such carriers charge significantly more than they do in the United States. [***L. Hakan
Sjoo, “Set Up Shop in Europe,” e-Business Advisor February 2000: 21.***] UPS
delivers to over 200 countries and offers next-day or two-day delivery to most locations.
To find out more about UPS’s services in a particular area of the world, go to the UPS Web
site and click on your area of interest in the box headed “Global Regions.” Federal Express
provides comparable fast delivery to locations around the world. The company’s site also
includes the “Global Trade Manager,” a database of online resources for businesses which
ship internationally that includes international shipping news, export/import guidelines,
downloadable customs documents, a universal currency converter, and information on
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international time zones and holidays. For a tour of Federal Express’s “Global Trade Manager,”
go to www.fedex.com/us/international and click on the “tour” option.
To ensure the best shipping price, use InterShipper (www.intershipper.com), a free
service that compares the shipping prices and arrival times of eight major shipping companies
according to a specific package’s weight and destination. Intershipper also offers free
integration tools so that its technology can be added to any online store.
When shipping internationally, it is important to indicate to buyers that the distribution
center is located outside their home country which will generate additional costs. Customers
will want to know that additional taxes levied by their country’s customs house will
be added to the cost of their purchases, and that goods may be delayed at customs.
9.5.6 Legal and Taxation Systems
Every government has a unique strategy when it comes to regulating traditional business
and business over the Internet, and every nation has a different set of laws relating to these
topics. In some countries, including the United States, laws may even vary by state or region.
Companies that wish to buy or sell products in the global market must obey both the
export laws of their own country and the import laws of the country into which they ship
products.
Shipping companies and customs agencies that process internationally distributed
goods often facilitate compliance with regulations. [***B. Sawyer, D. Greely and J. Cataudella.
Creating Stores on the Web: 2nd Edition. Berkeley, CA: Peachpit Press,
2000: 472.***] However, when international commerce is conducted on the Web, transactions
can be completed quickly without the involvement of third parties. The relative ease
with which m-businesses and e-businesses can buy and sell internationally is a major
advantage, but this also makes import and export laws easier to violate.
Every government places restrictions on international trade. Most nations require a
special permit to sell animals, plants, products made from endangered species, arms and
explosives, bulletproof clothes, toy guns, weapons of any kind, toy coins, pornography,
controlled substances and poisons. [***S. Tapper, “Is Globalization Right for You?”
Webtechniques September 2000: 30.***] Other rules are more specific, and a business
might only learn of them through extensive research. Exporting countries also have their
own sets of regulations; for example, due to national security concerns, the United States
prohibits the sale of certain software and computer technology to other areas of the world.
[***B. Sawyer, D. Greely and J. Cataudella. Creating Stores on the Web: 2nd Edition.
Berkeley, CA: Peachpit Press, 2000: 473.***]
The United States also maintains lists of embargoed countries, sanctioned countries,
denied persons (people who are not allowed to buy any goods or services from the U.S.)
and debarred parties (people or groups who are not allowed to buy specific goods or services
from the U.S.) [***J. Shen, “The Commerce Diplomats: Enabling the Free Flow
of Goods,” Webtechniques November 2000: 48.***]
In addition to the already extensive list of international commerce regulations, m-businesses
must comply with each country’s Internet regulations. For example, the European
Union’s privacy laws that forbid the unauthorized collection of personal data from Internet
users may well apply to m-business. This topic is pending. Other governments, such as that
of Saudi Arabia, have strict regulations on content that they view as offensive or pornographic.
[***D. DePalma, “International E-Commerce: The Time is Now,” e-Business
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Advisor October 2000: 31.***] Because of the complexity of the rules and regulations that
govern international commerce, a business should research local laws and consult with
legal experts before exporting goods or services to a particular foreign market.
Taxation also creates difficulties for global m-businesses. Before you begin processing
sales in another country, investigate international tax laws in that country as they apply to
Internet sales and to the specific products you wish to market. In many countries, including
all members of the European Union, a value-added tax (VAT) is charged for all goods sold
to consumers. If significant taxes are placed on the goods or services you offer, evaluate
whether the product prices will remain competitive once those taxes are added. Ideally, the
m-business should include all applicable taxes in listed product prices so that customers
know the total amount they are spending. Commercial tax software such as that offered by
Taxware International, Inc. (www.taxware.com) can help your m-business calculate
applicable taxes more quickly and easily.
Several companies provide solutions that can simplify the entire process of calculating
international taxes and fees and complying with international distribution regulations.
MyCustoms™ (www.mycustoms.com) offers an online backend service that provides
landed costs (the total cost to a customer, which includes the price of the product, shipping
costs, insurance, taxes, duties, and import/export fees) for a businesses’ international customers
in real time. The landed cost of a product is. MyCustoms guarantees its cited landed
costs and ensures that international transactions authorized by its system comply with all
international trade laws. In addition, myCustoms automatically generates the documents
needed to ship goods internationally and pays any fees involved. A similar service is provided
by World Tariff (www.worldtariff.com), a company that tracks customs duty
and tax information for global businesses. Although World Tariff does not provide landed
costs for specific transactions, it offers e-businesses the information necessary to calculate
landed costs accurately. Vastera (www.vastera.com) and ClearCross (www.clearcross.
com) are other companies that provide information about the costs and documentation
involved in international distribution. [***J. Shen, “The Commerce Diplomats:
Enabling the Free Flow of Goods,” Webtechniques November 2000: 48-49.***]
9.5.7 Promotions
Creating an internationally established business is contingent on successful global marketing.
When writing promotional material for foreign audiences, investigate the interpretation
of the company and product names in the languages in which the business is
advertising. Do they translate appropriately (i.e. does the literal meaning change when
translated), or should they be adapted for the product’s target market? Often, product names
and advertising slogans cannot be directly translated.
For example, both Pepsi and Coke have had problems marketing in foreign nations.
Pepsi’s “Choice for the next generation” slogan translated into “Pepsi brings your ancestors
back from the grave” in Chinese. The name Coca-Cola means “Bite the wax tadpole” in
one Chinese dialect and “female horse stuffed with wax” in another. It was eventually
resolved to translate into “happiness in the mouth.” To view these and other marketing
errors, visit www.the-net-effect.com/articles/multiculture.html.
Other companies’ names and advertisements did not create such blatant misunderstandings
but were modified for other reasons. When America Online expanded to Europe
and Asia, the company changed the official name of its overseas operations to AOL in an
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attempt to seem more inclusive and less American. In addition, many American advertising
tactics, such as the “hard sell,” are not effective in other cultures and should be avoided.
Other advertising tactics are strictly prohibited in other countries; for example, it is illegal
to directly mention competitors when advertising in Germany. [***B. Sawyer, D. Greely
and J. Cataudella. Creating Stores on the Web: 2nd Edition. Berkeley, CA: Peachpit
Press, 2000: 473.***] The sending unsolicited commercial e-mail, or spam, is also
restricted in many countries.
Once promotional material has been culturally adapted, select the marketing campaign’s
advertising media. Investigate various options such as billboards, print advertisements,
radio and television spots, and various forms of online promotion. Which channels
will allow the business to reach the largest number of potential customers at the lowest possible
cost in the targeted country or region? Answers to this question will vary considerably
among markets, so it is important to reevaluate advertising strategy each time a new foreign
market is entered.
If a business chooses to advertise on foreign Web sites, be aware that site performance
data in most foreign markets is less reliable and more difficult to obtain than in the U.S.
However, some Internet ratings firms have begun to offer performance information on
international sites. Media Matrix, an American ratings firm, has partnered with Germany’s
GfK and Britain’s Ipsos to form MMXI (www.mmxi.com), a company that provides
Internet ratings for the U.S., Canada, the United Kingdom, France, Germany, Sweden,
Australia and New Zealand. The company plans to offer data on Japanese, Chinese and
other European sites in the near future. Other companies that offer international Internet ratings
are Paris-based NetValue (www.netvalue.com) and ACNielsen eRatings.
com. [***S. Lawrence, “Measuring Up: The Race is on to Deliver Internet
Ratings in Europe,” The Industry Standard 14 February 2000: 212***] In markets
where there is little or no site performance information available, look for advertising space
on sites of companies that sell similar or complementary products.
Many issues relating to international advertising and promotions are complex. Consulting
experts may be the best way to ensure successful marketing efforts. Companies that
offer comprehensive localization solutions will assist with promotions in foreign markets.
9.6 Future of Global m-Business
Wireless technologies, specifically cell phones, are helping to bridge the world’s digital divide.
Undeveloped countries are installing wireless infrastructures, enabling people to
make their first phone calls. Worldwide cell-phone subscriptions continue to grow and cellphone
use will continue into the future, but in what form and with what applications and
enhancements?
e-Fact 9.14
According to Gartner Group, by 2004, 61 percent of business-to-consumer online transactions
and 63 percent of business-to-business online transactions will originate outside the
United States.[***B. McCarthy, “All E-Business Is Global,” Information Week 5 June
2000: 204.***] 9.14
Network operators must have returns on their investments to remain viable businesses.
They must decide when, or even whether to deploy 3G networks and technologies
depending on costs and the demands of popular applications. The number of joint ventures
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and takeovers in the wireless industry will increase as debt builds and deadlines draw
closer. This environment will continue until the wireless industry consolidates, just as other
telecom segments and industries have. The future of global m-business hinges on whether
companies can respond to the financial factors and if customers adopt the new services and
applications.
American m-businesses realize that if they do not continue to provide and expand services
aimed at an international customer base, competitors will. Businesses that do not produce
applications useful to international users exclude more than two-thirds of their
potential customers.Globalization is a major part of the future of m-businesses, and success
is contingent on implementing intelligent and thorough globalization strategies.
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