Business News

E-commerce and e-business in the Czech Republic

E-commerce and e-business, two new expressions that have aggressively made their way to the vocabulary of many languages. The rapid development of electronic trading has also hit the Czech Republic, with an explosive increase in the number of Internet users who have tasted the convenience and benefits of e-commerce.

However, it is not only individuals who find it useful to be able to purchase goods and services, or communicate with their bank over the Internet. A recent survey by PricewaterhouseCoopers revealed that the overwhelming majority of Czech companies regard e-business as very important. They believe it will have a major impact on competition in their industry and recognise that they need to rapidly expand their e-business activities in order to remain competitive.

Currently, most Czech companies are not earning any significant revenues from e-business. In fact, a full 51 percent of respondents indicated they generated no revenue from e-business. However, within 5 years, a quarter of the companies expect to earn more than 20 percent of their revenue using the Internet.

PricewaterhouseCoopers estimates that by 2003, the volume of business-to-business electronic transactions in the Czech Republic will exceed 2 hundred million USD annually, on the condition that the main stumbling blocks are removed. These include issues like the security of data sent over the Internet, the underdeveloped infrastructure for electronic transactions between companies, and an inadequate legislative framework. Another problem, though not Czech-specific, but more serious, is the development of global standards for privacy protection, security and authentication, and dispute resolution.

Denis Henderson, PricewaterhouseCoopers' Senior Manager of Global Risk Management Solutions, noted that only 20 percent of Czech companies believe there is a fair amount of government encouragement for Internet and e-business development in the Czech Republic. This is, in his opinion, a real pity, as the opportunity exists for Czech e-business to grow quicker than has been experienced in Western Europe and North America, since Czech companies are not burdened with legacy information systems or old telecommunications infrastructure.

In the Czech Republic, the largest amount of transactions in the electronic environment are of the business-to-customer type. Although this sector is considered very important, PricewaterhouseCoopers sees the future in business-to-business electronic transactions.

One of the industries that--by its very nature--has to focus on developing business-to-customer relations, is air transport. Radio Prague's David Vaughan spoke to Barbara Cassani, the chief executive officer of British Airways' low-cost airline, Go, which operates here in the Czech Republic. Go uses an on-line booking system, but as Ms. Cassani explained, they have taken it a step further from what one would imagine as simply booking a ticket.