Disease is pushing more business onto the Internet

SARS has forced Taiwanese firms to increase their reliance on doing business over the Internet, making online transactions, videoconferencing and e-mail more pervasive after the disease disappeared in the summer, officials said yesterday.

"After the impact of SARS earlier this year, the Internet became an indispensable tool for Taiwanese businesses," said Huang Wen-rong (黃文榮), director of the Internet department at the China External Trade Development Council (CETRA). "We still had to carry on with business even though travel was limited, so the Internet and video-conferencing increased. After SARS receded [in June], these became regular business channels."

CETRA's own Internet-based trading site, TaiwanTrade.com.tw, which lists over 120,000 products from more than 10,000 local companies saw a 20-percent increase in transactions in the period from April to September this year as a direct result of SARS, Huang said.

The threat of manufacturing plants being closed by SARS has forced companies to outsource to more partners in order to spread the risk of a break in their supply chain, said Simon Lin (林憲銘), chairman of Acer manufacturing spin-off Wistron Corp (緯創資通).

"You don't know what's coming next -- today it's SARS, tomorrow who knows what?" Lin told reporters at a press conference to launch a new online computer trade show in Taipei yesterday.

The show, Computex Online (www.computex.biz), was created in May by the Taipei Computer Association (台北電腦公會) after Computex Taipei was canceled in June due to SARS. Computex was later rescheduled to September.

But Taiwanese companies need to do more business over the Internet, or risk losing out to competitors, a senior government official warned yesterday.

"Facing a global economic downturn, international trade conditions are touchy, therefore it is essential for Taiwan IT companies to get used to the e-business environment ? to stay competitive," Director-general of the Bureau of Foreign Trade Huang Chih-peng (黃志鵬) said.

A positive side effect of increased Internet business is cost savings.

"Business to business transactions over the Internet shorten the sales channel and so save costs," said Waldo Yeh (葉益成), chairman of consultants Expense Reduction Analysts Taiwan Ltd (ERA, 中華毅業). Winning customers through Internet marketing also saves on expensive print media advertising, he added.

In a survey conducted by US-based research firm Gartner Inc in the summer, the average American company could save US$10 million in annual costs by putting more services on the Net.

The average company sends out 75,000 paper bills at US$5 each month, while Web-based bills cost only US$2 each. That adds up to an annual saving of US$2.7 million if all bills are sent via the Web, Gartner reported. Redirecting invoice-related telephone calls to a company's Web site saves a further US$3.2 million.

Not all Taiwanese businesses are taking advantage of the Internet. Last year, just over 60 percent of companies in Taiwan were doing business over the Internet, and only 36 percent had Web sites, according to George Wei (魏志強), manager of the E-commerce Resources Center at the semi-official research body Institute for Information Industry in Taipei.

Some low-cost suppliers may also be shy of using the Web.

"At ERA we have a global on-line tendering system, but it is not always a success," Yeh said. "Some more traditional suppliers give us the best prices, but don't like to use the Internet."