In the latest asian internet report, morgan stanley asia executive director and regional internet analyst sunil gupta estimated that the total value of the b2c market in asian markets prior to 2004 was $3. 4 billion, of which $1. 9 billion (56 per cent) represented the total value of the online advertising market and $1. 5 billion came from e-commerce activities。
Given the limited size of the market and the marked differences in market demand across asia, he expected large-scale integration of the b2c market in asia. In addition, the b2c portal has a high fixed cost and the advantages of a large scale of operations will drive the industry to consolidate。
According to an analysis of the historical performance of the united states market, the yahoo business model and asian b2c market leaders, gupta predicts that only four or five websites will make money by 2004。
Morgan stanley estimates that there will be 157 million internet users globally, or 6 per cent of the total population。
United states market data show that when the online advertising market in the united states reached $1. 9 billion in 1998, only two sites were profitable; last year, $4. 6 billion was spent on online advertising and only three sites were profitable。
In addition, gupta noted that yahoo, created in 1995, was not able to make a gain until 1998, when its turnover was $245 million, indicating that it took at least hundreds of millions of dollars of income to achieve a balance of payments on the united states website。
Despite the relatively low average cost of human resources spending and promotion in asia, gupta estimates that the asian website still has to earn about $100 million in income to make a profit。
According to gupta, the asian internet market is three or four years behind the united states. Moreover, credit cards are not widespread in some asian countries and are one of the obstacles to the development of b2c e-commerce。
Of the $1. 9 billion projected online advertising market in 2004, gupta projected that korea would account for $439 million (23 per cent), followed by australia (22 per cent) and china (16 per cent); singapore ranked sixth in asia on the size of the online market at $87 million。
It is worth noting that online advertising in asia accounted for only about 5 per cent of the total advertising market in 2004; the current share is less than 0. 5 per cent. Given the limited size of the b2c market in most asian countries, gupta stated that a portal dedicated to a national market would not be viable in the long term。
However, he did not think that a pan-asian primer would be feasible, since asian countries had different customs and cultures, divided into at least five or six markets, and it was therefore not possible to identify a comprehensive asian-wide site。
Referring to the conditions for a successful portal, he stressed the importance of its content. It is therefore intended that only internet service providers and instrument manufacturers with a user-size win, or traditional media companies that supply only one source of news, will be unable to compete with the primer (horizontalportal) that integrates news and information from all over。
He cited the fact that only yahoo, the united states online and lecoth, all of which were pro-active, were currently in the world。
According to morgan stanley's study, yahoo's page views amounted to 625 million a day; the new york times and the american today portal received less than 25 per cent of their daily page views。
In addition, gupta stated that the united states-listed pro portal had a much higher revenue and expenditure ratio than the dedicated introductory website, which showed that investors had a higher rating of the former。
Gupta, on the other hand, considers the wap functionality an indispensable condition for a successful portal. He expected that users in asia who had access to the internet through the wfp mobile phone would be expected to move beyond computer internet users in a few years。
