Globalization and E-Commerce: Diffusion and Impacts of the Internet and E-Commerce in Germany

Article type: Research Article

Authors: Koenig, Wolfgang | Wigand, Rolf T.

Affiliations: Johann Wolfgang Goethe University, Frankfurt am Main, Germany. E-mail: wkoenig@wiwi.uni-frankfurt.de; rbeck@wiwi.uni-frankfurt.de | Maulden-Entergy Chair and Distinguished Professor of Information Science and Management, University of Arkansas at Little Rock, USA. E-mail: rtwigand@ualr.edu

Abstract: The diffusion of E-Commerce applications and solutions among the investigated firms in the three German industry sectors seems to have reached a high level of saturation of E-Commerce technologies. This applies more or less for both types of establishments, large as well as small and medium-sized ones (SMEs) in all of the three investigated industries (manufacturing, retail/wholesale and banking/insurance). Although a kind of E-Commerce maturity is observable, statements about the de facto usage behavior and intensity cannot be made based on the underlying survey data. In contrast to the results of the global survey, German firms less often regarded E-Commerce as an enabler for entering new markets or increasing sales at an international level. Given the existing global market orientation, German firms were already acting competitively in international markets, even in the pre-E-Commerce era. After E-Commerce solutions proved successful, SMEs were at the forefront, implementing E-Commerce applications and are therefore important drivers of innovation diffusion in Germany. Although all industry sectors are well equipped, industry-related differences remain. The manufacturing industry started from a high level of existing advanced digital technologies such as EDI or joint supply chain management systems. The retail/wholesale industry, with its large number of SMEs, can benefit more from new forms of E-Commerce such as Internet-based EDI. SMEs in this sector are able to improve their business processes more often than SMEs in other sectors where industry-related EDI standards were not in place. The banking and insurance sector heavily invests in online business models. While most benefits of online banking and brokerage appears on the customer side, firms in this sector cannot benefit in the same way. As long as banks are not able to decrease their costs, e.g., by reducing the number of branches, the multi-channel distribution strategy offers limited benefits. The relative efficient usage of E-Commerce seems to depend directly on the strategic focus of firms. While strategically unfocused firms might still be experimenting with E-Commerce applications, others are already gaining benefits from E-Commerce. SMEs as the backbone of German industry are not only able to reach the same stage of diffusion as large firms, but are also able to achieve commercial success. Especially in the retail/wholesale industry, SMEs may benefit for the first time from decreasing costs due to supply chain improvements and electronic transactions. Government and public administration as a public sector cannot be regarded as drivers of E-Commerce in Germany. Far from it, the lack of E-Commerce applications in the public sector makes electronic processes impossible for the private industry sector, resulting in additional manual coordination efforts.

Journal: I-WAYS, Digest of Electronic Commerce Policy and Regulation, vol. 27, no. 3-4, pp. 197-227, 2004