Internet was supposed to give traditional retailers a tough life, now instead it looks some of them are coming back to dominate it. Following thanksgiving day in US Americans came back to their office computers to take advantage of high speed internet links and to go for Christmas presents. Visits to some retail sites doubled and online spending via credit cards grew 26%y/y.
Online purchases are not only soaring in US but in most countries. And not so surprising the web sites run by conventional retailers are growing fastest. On thanksgiving the number of visitors to Wall Mart’s web site exceeded those who visited Amazon, a first timer.
Online sales in America for Christmas are expected to reach $19bn up 24%y/y. Online sales of computer games, and jewelry are expected to grow even faster. In many countries the web sites run by ebay and Amazon get the most visitors. While both are internet plays only their business models have changed to online versions of huge departmental stores, with thousands of big and small third parties also offering their wares.
Amazon on its part sold during thanksgiving more consumer electronics than books, again a first timer. Amazon proved earlier online retailing could be a huge business and still leads the pack. But things could change very fast. The online rise of Wall Mart, the worlds biggest retailer, is closely followed by its chief rival Target., which now operates the fourth most popular retail web site in America. In UK Argos earlier a pure catalogue retailer has become the third most popular web site, followed by Tesco the country’s biggest supermarket chain. In continetal Europe it does not look different.
Europeans are surfing the web in record numbers and almost half now visit retail web sites, especially those of traditional merchants. Far from wrecking retailers businesses the web plays to their strength. Shopping comparison sites in US and especially western Europe are among the fastest growing web sites. These sites allow users to compare products, read reviews and most see who is offering the lowest prices. These results can be used by offline retailers for advertisement purposes. There are also other advantages in expanding their stores online. One is that expansion in cyberspace is no problem, contrary often to the situation when supermarkets want to expand their local space offshore. Via web new markets can be tested, before going full speed into the introduction of new products offshore.
Retailers are starting to recognize that their most profitable customers find the convenience of an offline offering complimentary to an instore pick up experience, Why do they buy online and still want to pick up? Well the pick up guarantees the buyer the opportunity to see the purchased good first and it gives him assurance that it can be returned. So it seems that internet is substituting not so much the offline retailer but offers the possibility of acting like a catalogue seller as well. And no doubt. The internet is by far more flexible than the catalogue could ever have been.

Almost free Internet phone calls herald the slow death of traditional telephony
Voice over Internet protocol (VOIP) promises to be of a highly disruptive character and of even higher benefit to consumers than personal computers. VOIP's leading proponent is Skype, a small firm whose software allows people to make free calls to other Skype users over the internet and very cheap calls to traditional telephones which spells trouble for incumbent telecom operators.
Mind you Skype a small firm with little turnover, no profits and very small equity has made its founders another billionaire as eBay, is buying the company for $2.6 bn. in cash plus and additional $1.5bn if certain performance targets can be hit in coming years. As the company is very young the jackpot hit in the infotech sector again.
For eBay it means that the company can introduce click to call advertisement. That means you see some thing interesting, you simply click, and you can talk with someone for free. Internet becoming even more a communication centers worldwide.
What does it mean for the traditional telephony? Well our Nepal telecom seems to be nearer to death. and what does it mean for our mobile operators? Probably the same. But don't worry for them we don't talk of tomorrow. The ability to make free or almost free calls over a fast Internet connection fatally undermines the existing pricing model for telephony. According to one of Skype cofounder's you shouldn't have to pay for making phone calls in future just as you don't pay to send email. That means not just the end of distance and time based pricing, it also means the slow death of the trillion dollar voice telephony market as a marginal price of making phone calls heads inexorably downwards. Many providers allow a VOIP account to be associated with a traditional telephone number or with multiple numbers. So you can associate a Mumbay, a Delhi number and a Kathmandu number with your computer or VOIP phone and then be reached via a local call by anyone in any of those cities.
You phone or computer will ring wherever you are in the world as soon as it is plugged in to the internet. You can take you Kathmandu number with you to Mumay or to Singapore. It is great news for consumers but terrible for telecoms operators. What can they do?
As is always the case with a disruptive technology, the incumbents it threatens are dividing into those who are trying to block the new technology in the hope that it will simply go away and those who are moving to embrace it even though it undermines their existing businesses. Since VOIP will cause revenue from voice calls to wither away the most vulnerable operators are those that are most dependent on such revenue. Mind you these are the mobile operators which up to now struggle to get other activities beside of voice. Fixed line operators which can invest in new networks based on internet technology will be able to benefit from the greater efficiency and lower cost of VOIP. Looks as if NTC has a chance, provided they can invest. But these guys don’t have money, so why not to privatize

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