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UNIVERSITÀ DELLA CALABRIA
DIPARTIMENTO DI SCIENZE AZIENDALI E GIURIDICHE
Corso di Laurea Magistrale in Economia Aziendale
Tesi di laurea magistrale
E-COMMERCE SALES AS A RESULT OF E-COMMERCE
ADOPTION: THE CASE STUDY OF INDONESIA AND
ITALY
Relatore Candidato
Prof. Davide Infante Giovanni Pramudya Ariawan
(Matr. 157452)
Anno Accademico 2014/2015
ABSTRACT
The purpose of this study is to compare the state of e-commerce adoption in regard of e-
commerce sales between two different countries, Indonesia as a developing country and
Italy which represents the developed country. Furthermore, this study also examines
factors that might hinder the smoothness of e-commerce adoption. The methodology
employed in this study was by collecting and compiling relevant data between these two
countries. Sources are obtained from literatures, journals and books from antecedent
researchers, as well as sites and news which related to this study. Not to mention,
experience of living in these two countries also give a contribution in this study to develop
the ideas and convey insights whether it is positive or negative from writer point of view
regarding of these two countries, which eventually by revealing the discovered facts, it is
hoped it can be rewarding for science, especially in economic. In addition, this study also
attempt to find the effectiveness of e-commerce adoption in terms of supporting retail sales
between two countries, whether the significant aspects do really can make a significance
impact in term of electronic sales, in here, e-commerce sales.
i
ACKNOWLEDGEMENTS
Firstly, I am grateful to the God for the good health and wellbeing that were necessary to
complete this thesis. I would like to thank to Jesus Christ, for each of His unconditional
love, especially by granting me an opportunity to study in this university until finish.
A profound gratitude I would like to address to my supervisor Prof. Davide Infante for the
continuous support and guidance since the first day I started until the layout of this thesis
completed. His guidance helped me in all the time of research and writing of this thesis. I
could not have imagined having a better advisor and mentor for my thesis
Besides my supervisor, I would also like to express my gratitude to my wife, Ratna who
always believe and never give up on me. I could not reach this point without your love and
support to me. Thank you for always standing right beside me.
My sincere thanks also goes my family, especially for papa and mama, who always support
me with love and passion, gave me an insight and reflection of how important a degree is,
in order to pursue a brighter career in the future.
I address a big thank as well to my little sister, who always support me in whatever
condition that I had to go through especially when I was down. Thank you for the aid of
journals sources you had given to me, so I can completed this thesis without enduring
difficulties to find arguments I needed.
I also want to take this opportunity to express my gratitude to my best friend, Federico
Bonacci who helped me since the first time I entered this university until now, without his
help I could not have imagined surviving and finishing my study in Italy
Last but not least I would like to thank to Gianpiero Barbuto and his wife Chiara who
always supporting me in terms of studying matters, Indonesian students in Unical whether
those who already graduated or still pursuing their study, Walter who always believe in
me, not to mention my colleagues, Rini, Mbak Tytz, Mbak Nani, Mbak Jullie and Mbak
Wita for perpetually taking care of me and enlightening my days during our busy days.
ii
CONTENTS
ABSTRACT...................................................................................................................................... i
ACKNOWLEDGEMENTS..........................................................................................................ii
CONTENTS.................................................................................................................................... iii
TABLES, CHARTS AND FIGURES........................................................................................iv
CHAPTER I INTRODUCTION................................................................................................1
1.1 Overview of the study............................................................................................1
1.2 Objectives of the study...........................................................................................4
CHAPTER II LITERATURE REVIEW.................................................................................5
2.1 What is e-commerce?.............................................................................................5
2.2 Types of e-commerce.............................................................................................8
2.3 The implementation of e-commerce..................................................................12
2.4 Benefits realized by utilizing e-commerce........................................................17
2.5 Factors that hinder the adoption of e-commerce..............................................20
CHAPTER III STUDY AND FINDINGS..............................................................................26
3.1 Usage of e-commerce application in Indonesia and Italy...............................26
3.2 Benefits realized through adoption of e-commerce in Indonesia and Italy. .78
3.3 E-commerce contribution toward retail sales in Indonesia and Italy.............84
3.4 Factors that hinder the adoption of e-commerce to advance in Indonesia and
Italy.......................................................................................................................112
CHAPTER IV CONCLUSION, SUGGESTIONS, LIMITATION AND FUTURE
RESEARCH.................................................................................................................................126
4.1 Conclusion and Suggestions..............................................................................126
4.2 Limitation.............................................................................................................132
4.3 Future Research...................................................................................................132
BIBLIOGRAPHY.......................................................................................................................134
WEBSITES...................................................................................................................................144
iii
TABLES, CHARTS AND FIGURE
iv
S
CHAPTER II LITERATURE REVIEW..........................................................................5
Figure 2.1 Three Basic Participants in E - commerce.....................................................8
Figure 2.2 A Conceptual Framework for The Application and Implementation of E-
commerce.....................................................................................................15
CHAPTER III STUDY AND FINDINGS.......................................................................26
Chart 3.1 Number of Internet Users in Indonesia from 2013 to 2018 (in millions).....26
Chart 3.2 Internet Penetration Rate in Indonesia by 2012...........................................28
Table 3.1 Internet Penetration, Population and Internet Users in ASEAN by 2010....29
Chart 3.3 Percentage of Web Access through devices in ASEAN Countries..............30
Chart 3.4 Vary of Internet Connection in ASEAN Countries......................................31
Chart 3.5 Internet/E-commerce Usages in Indonesia Based on Gender, Marital Status,
Place of Residence and Education................................................................32
Chart 3.6 Internet/E-commerce Usages in Indonesia Based on Age...........................33
Chart 3.7 Internet/E-commerce Usages in Indonesia Based on Income......................34
Chart 3.8 Time spent Connected to The Internet.........................................................34
Chart 3.9 Internet/E-commerce Usages in Indonesia...................................................35
Table 3.2 Preferred Online Activities Based on Percentage........................................36
Chart 3.10 Mobile Usage in Indonesia...........................................................................37
Chart 3.11 Preferred Online Shopping Activities Based on Percentage in Indonesia. . .38
Chart 3.12 Online Shopping Favorite Sites in Indonesia...............................................39
Chart 3.13 Preferred Payment Method in Indonesia......................................................40
Chart 3.14 Number of Internet Users in Italy from 2012 to 2018 (in millions) ............41
Chart 3.15 Table of Individuals who used Computer and Individuals who used the
Internet by Sex, Age Class, Geographical Area, Employment Status and
Position, from years 2007 to 2015...............................................................44
Table 3.3 Reasons and Percentage behind Households which do not have Internet
Access (Comparison from year 2012 & 2014).............................................45
v
Table 3.4 Percentage of people from 3 years old age and over who have used the
personal computer in the last 12 months categorized by the ability to
operate, sex and age group - Year 2014.......................................................46
Table 3.5 People from 6 years old age and above who have used the Internet in the
last 12 months by type which know how to operate, sex and age group -
Year 2014 (in thousands).............................................................................48
Table 3.6 Percentage of people with aged 6 and over who have used the Internet in the
last 12 months of judgement given regarding their skills in using the
Internet in relation to certain operations, sex and age groups - Year 2014..50
Chart 3.16 Percentage of children with aged 6-17 years old who used internet by age
classes and behavior of their parents - Year 2014 (surveyed 100 children
aged 6-17 years old with the same characteristics)......................................51
Chart 3.17 Percentage from European People from 16 – 74 years old who used Internet
Regularly for the last 3 months – Year 2013................................................52
Table 3.7 Numbers of people from 6 years old age and above who used the Internet in
the last 3 months by type of communication activities took place, sex and
age group - Year 2014 (in thousands)..........................................................53
Table 3.8 Number of people age from 6 years old age and above who used the Internet
in the last three months by type of communication activities took place,
region, geographical area and type of municipality - Year 2014 (in
thousands).....................................................................................................55
Table 3.9 Number of people from 6 years old age and above who used the Internet in
the last 3 months for other activities classified by sex and age group - Year
2014..............................................................................................................57
Table 3.10 Number of people from 6 years old age and above who used internet in the
last three months for cultural products and entertainment activities matters
which performed by sex and age group - Year 2014 (in thousands)............59
Table 3.11 Number of people from 14 years old age and above who used the Internet in
the last 12 months for private use related to the Public Administration
classified by sex and age group - Year 2014................................................60
vi
Table 3.12 Percentage of people from 15 years old and above who used the Internet in
the last 12 months private use related with the Public Administration or with
public services operator, classified by gender, status and employment status
- Year 2014...................................................................................................62
Table 3.13 Number of people from 15 years old and above who used the Internet in the
last 12 months for private use related with the Public Administration or with
the of public services operator, classified by type of activity carried out, sex,
and employment status - Year 2014 (in thousands).....................................63
Table 3.14 Percentage of people aged 14 and over who used the Internet in the last 12
months and have ordered or purchased goods and / or services for private
use of the internet which classified by sex and age group - Year 2014.......65
Table 3.15 Percentage of people from 14 years old and over who used the Internet in
regard of e-commerce usage in the last 12 months and have ordered or
purchased goods and / or services for private use over the Internet in the last
12 months classified by type of goods and / or services ordered or
purchased, sex and age group - Year 2014 (with the same characteristics).67
Table 3.16 Number of people from 14 years old and over who used the Internet in
regard of e-commerce in the last 12 months and have ordered or purchased
goods and / or services for private use over the Internet in the last 12 months
classified by type of goods and / or services ordered or purchased, region,
geographical distribution and type of municipality - Year 2014 (in
thousands).....................................................................................................68
Table 3.17 Percentage of people from 14 years old and over who used the Internet in
the last 3 months in places other than home or workplace classified by type
of mobile device used, sex and age group - Year 2014................................71
Table 3.18 Percentage of people from 6 years old and above who used the Internet in
the last three months for storage use and / or share files over the Internet,
sex and age group - Year 2014.....................................................................72
Table 3.19 Number of people from 6 years old and over who used the Internet in the
last 3 months to save and share documents, pictures or other files using
storage services on the internet (eg. Google Drive, Dropbox, etc.) classified
vii
by type of file saved or shared sex and age group - Year 2014 (in thousands)
......................................................................................................................73
Table 3.20 Percentage of persons from 6 years old and above who used the Internet in
the last 3 months to save and share documents, pictures or other files using
storage services on the Internet (eg. Google Drive, Dropbox, etc.) classified
by motive, sex and age group - year 2014....................................................75
Chart 3.18 Benefits of E-commerce Experienced by Female-Owned SMEs in Urban
and Rural Areas............................................................................................79
Chart 3.19 Benefits of E-commerce Experienced by Female-owned SMEs.................79
Figure 3.1 Assumptions & Calculations of Total E-commerce Revenue in Indonesia. 85
Chart 3.20 Indonesian E-commerce Market Size forecast by 2012 – 2016...................87
Figure 3.2 Rank of Most Popular Social Media Platforms in Indonesia.......................89
Chart 3.21 A growth of Netizens in Indonesia from 2010 to 2013................................90
Chart 3.22 Growth in Number of Online Shoppers in Indonesia from 2013 to 2016....90
Chart 3.23 Percentage of Preferred E-commerce Channels or Platforms for Online
Shopping.......................................................................................................91
Chart 3.24 Popular Online Product Categories in Indonesia (2013)..............................92
Chart 3.25 Percentage of online shopper based on gender and products categories......93
Table 3.21 Comparison between Online Sales and Retail Sales in Indonesia...............94
Chart 3.26 Timeline of B2C E-Commerce in Indonesia from 2011 to 2016 (in billion
USD).............................................................................................................97
Chart 3.27 Indonesian Annual B2C E-commerce sales growth from 2012 to 2017......98
Chart 3.28 Increase of E-commerce Sales in Italy based on Amount (€) and % of
Increment......................................................................................................99
Table 3.22 E-commerce Sales Data based on amount (€) and % Increment from 2004 -
2013............................................................................................................100
Chart 3.29 The Distribution of Italian E-commerce Sales from 2006-2014................101
Figure 3.3 Growth of Mobile Commerce in Italia from 2012 to 2015........................105
viii
Chart 3.30 Timeline of B2C E-commerce sales in Italy from 2012 to 2017 (in billion
USD)...........................................................................................................106
Chart 3.31 Italian Annual B2C E-commerce sales growth in Italy from 2012 to 2017
....................................................................................................................107
Chart 3.32 Priority of Mobile Channel Activities in Italy............................................109
Figure 3.4 Percentage of Social Media Usage as an Effective E-commerce Media in
Europe........................................................................................................110
Chart 3.33 Comparison of Preferred Social Media Usages as an Effective Way of E-
commerce Platform in Some Countries in Europe.....................................111
Chart 3.34 Preferred Payment Method in Indonesia in 2013.......................................115
Figure 3.5 Italy position among EU countries in term of cash card ratios (percentage
values) and POS transactions (thousands)..................................................119
Chart 3.35 Number of transactions by electronic payment instruments per capita among
European countries – Year 2009................................................................120
Chart 3.36 A comparison regarding of relative importance of payment instruments
between Euro area and other EU countries................................................121
Table 3.23 List of payment instrument based on relative importance in EU and Euro
area.............................................................................................................122
Figure 3.6 Income concentration and use of electronic payment instruments.............123
Chart 3.37 Number of electronic payments per capita at regional level in Italy .........124
CHAPTER IV CONCLUSION, SUGGESTIONS, LIMITATION AND FUTURE
RESEARCH......................................................................................................................126
Chart 4.1 E-commerce Share of Total Retail Sales in Italy from 2012 to 2018........128
Chart 4.2 E-commerce Share of Total Retail Sales in Indonesia from 2013 to 2018 129
Table 4.1 Average of B2C E-commerce Sales per Digital Buyer Worldwide, by
Region from 2011 to 2015.........................................................................130
Table 4.2 Digital Buyers Worldwide, by Country from 2011 – 2015........................131
ix
CHAPTER I
INTRODUCTION
Contents: 1.1 Overview of the study - 1.2 Objectives of the study
1.1 Overview of the study
Nowadays, the Internet is revolutionizing our society, our economy and our technological
systems. No one knows for certain how far, or in what direction the Internet will evolve.
Nevertheless, no one could underestimate its importance. The Internet, as an integrating
force, has melded the technology of communications and computing to provide instant
connectivity and global information services to all its users at very low cost. According to
Federal Networking Council in 19951, internet is defined as a global information system,
also included in the definition, is not only the underlying communication technology, but
also higher-level protocols and end-user applications (Kahn & Cerf, 1999). The Internet
accounted for 21 percent of the GDP growth in mature economics over the past 5 years. In
that time, we went from a few thousand students accessing Facebook to more than 800
million users around the world, including many leading firms, who regularly update their
pages and share content. While large enterprises and national economies have reaped major
benefits from this technological revolution, individual consumers and small, upstart
entrepreneurs have been some of the greatest beneficiaries from the Internet's empowering
influence (Manyika & Roxburgh, 2011).
Today, the number of internet users has been steadily growing and its growth has provided
impetus and opportunities either for global or regional e-commerce. The adoption of
internet for e-commerce use especially in business is increasing rapidly in the world since
the first users started to browse the worldwide web in search of goods and services.
Electronic commerce refers to conducting business transactions over the Internet, which
includes exchange of information of value in the form of products and services as well as
payments, using web-based technologies (Fraser, Fraser & MacDonald, 2000). This covers
a wide range of activities, ranging from use of electronic mail, through to Internet based
sales and transactions and web based marketing. Different people use different terminology
such as “electronic trading”, “electronic procurement”, “electronic purchasing” or
1 http://www.fnc.gov1
“electronic marketing”. In other words e-commerce includes purchases of goods, services
and other financial transactions in which the interactive process is mediated by information
or digital technology at both separate locations, ends of the interchange.
The emergence of electronic commerce is expected to change traditional business
practices. The advent of World Wide Web has created a new way in doing business by
creating electronic or virtual marketplaces that can conduct trading activities without any
geographical and time barriers. Electronic markets, which have the advantages of greater
reach and richness than the traditional markets (Tse & Soufani, 2003) is enabling firms to
engage with more potential customers and exchange much more detailed information with
them. Indeed, e-commerce has already redefined relationship between suppliers and
customers (Daniel & Wilson, 2002). Not to mention, Internet-based of e-commerce has
been embraced as a mean of reducing operational cost and as a high potential means of
generating revenue (Gunasekaran, Marri, McGaughney & Nebhwan, 2002). Electronic
commerce or simply e-commerce also consigns companies to be able to connect with their
trading partners for “just in time production” and “just in time delivery”, which improves
their competitiveness globally (Ngai & Wat, 2002). Rapid changes brought about by e-
commerce have offered new opportunities as well as threats for business organizations
(Fraser et al., 2000). Zhu et al. (2003) point out that understanding the drivers and barriers
of e commerce adoption becomes increasingly important.
However, despite the treats which can menace business organizations, it is still believed
that e-commerce is the most possible promising application of information technology
witnessed in recent years, a true revolution as the growth of the Internet and its use is
officially become the second Internet revolution that we are experiencing since the past
few years (Gunasekaran, Marri, McGaughney & Nebhwan, 2002).
It cannot be denied that electronic commerce may have large economic effects in the
future. Internet commerce will change the face of business forever. The e-commerce has
affected the global economy in many different ways. First of all, it has affected the
information technology and all the economic sectors, however, e-commerce has enhanced
the productivity growth worldwide either for developed country or developing country.
Not to mention, electronic commerce also has substantial potential to foster the growth of
retail sales in developed and developing countries alike.
During the fledgling stage of e-commerce, the potential of the internet agitated companies.
Researchers were excited about the opportunities of the internet as an efficient channel of
distribution and communication (Hoffman and Novak, 1996). In contrary, Ghosh (1998)
2
reported that it was difficult for executives at most companies to estimate the value of their
internet investments. Thus, the internet channel was considered quite risky and profit
potential was uncertain. The e-commerce adoption decision in the retail sector was
particularly risky because of the notoriously low profit margins in the sector (Hunter,
2003). However, Javalgi and Ramsey (2001) disagreed with those arguments and argued
that e-commerce has created a large impact on businesses by improving distribution of
resources, relationships and efficiency of economies as well as increasing competitiveness
and diminishing costs.
The success of technology adoption is heavily dependent on how it is used by the adopters
and this in turn is affected by the fit between the technology and the adopters (Unhelkar,
2003). Unfortunately, technology adoption has not always been successful in developing
countries. Moreover, while many of the e-commerce benefits have been realized by
organizations in developed countries, there is still skepticism in the relevance of e-
commerce and its benefits for developing countries (Odera - Straub, 2003; Raman & Yap,
1996). As we may have known that e-commerce has already been established in developed
countries like the US, Japan and the European countries, the application of electronic
commerce itself is relatively new in developing country such as Southeast Asia, especially
in Indonesia. Not to mention, there are still a limited number of studies on the adoption of
e-commerce technologies by developing countries (Chowdhury, 2003). Italy as the third
largest economy in Europe has an internet penetration of 60%, with 61 million inhabitants
where 13 million are online shoppers could generate online sales around €11.2 billion in
20132 despite its drop in retail sales for -2.1% during the same year3. In the meantime,
Indonesia which has 254 million people4, only possess 30% of internet penetration rate
where 7% are online shoppers and solely could generate IDR 130 trillion or equal with €
9.4 billion (assume € 1 = IDR 13,891.46), yet retail sales remain positive at 12.9% with a
slight decrease of 1.6% in 20135. Although, most of developing countries have applied e-
commerce, but not all of the countries are focusing on e-commerce development in order to
improve efficiency and productivity especially in doing business.
This study will attempt to compare retail sales from e-commerce media between two
countries, which are Indonesia as a developing country, while Italy as a developed country.
2 http://ecommercenews.eu/ecommerce-per-country/ecommerce-italy/ 3 http://www.focus-economics.com/country-indicator/italy/retail-sales 4 https://www.cia.gov/library/publications/the-world-factbook/geos/id.html5 http://startupbisnis.com/data-statistik-mengenai-pertumbuhan-pangsa-pasar-e-commerce-di-indonesia-saat-
ini/
3
Factors that might hinder e-commerce adoption to advance retail sales in these two
countries will also be examined in order to discover the barriers that impede. The reason
why Indonesia and Italy were chosen as the objects of this study is because Indonesia is the
origin country where writer was born on the other hand, Italy has been a place where writer
lived for almost 3 years in order to finish his master degree. The above preliminary review
and arguments lead to the following research questions:
a. What is the extent of e-commerce adoption in Indonesia and Italy?
b. What are the benefits realized by implementing e-commerce among these two
countries
c. What percentage of e-commerce sales in contributing toward Indonesian and
Italian retail sales?
d. What factors could be hindering the adoption of e-commerce in these two
countries?
1.2 Objectives of the study
The first objective of the research is to study the extent of e-commerce adoption among
Indonesia and Italy. The second objective is to assess benefits realized by these two
countries by adopting e-commerce. The third objective is to estimate e-commerce
contribution percentage toward retail sales between two countries. The last objective is to
examine the factors that could be hindering the adoption of e-commerce among two
countries.
It is hoped that this research can provide a useful insight for scholars regarding of current
situation in e-commerce usage contributing retail sales between Italy as the representative
from developed country and Indonesia as one of developing countries, the extent of e-
commerce adoption itself as well as benefits realized from it, not to mention, all kind of
factors that might hinder its adoption. It is also expected that the results can help each
country to overcome the barriers and find the best solution to enhance e-commerce usage.
4
CHAPTER II
LITERATURE REVIEW
Contents: 2.1 What is e-commerce? - 2.2 Types of e-commerce - 2.3 The implementation
of e-commerce - 2.4 Benefits realized by utilizing e-commerce - 2.5 Factors that hinder the
adoption of e-commerce
2.1 What is e-commerce?
A combination of regulatory reform and technological innovation enabled e-commerce to
evolve as it has. Although the precursor of the Internet appeared in the late 1960s, Internet
e-commerce took off with the arrival of the World Wide Web and browsers in the early
1990s and the liberalization of the telecommunications sector and innovations that greatly
expanded the volume and capacity of communications (optic fiber, digital subscriber line
technologies, satellite). In 1994, e-commerce as we now know it was not existed yet, until
in 2005, just eleven years later, around 110 million American consumers are expected to
spend about $142–$172 billion purchasing products and services on the Internet’s World
Wide Web (Laudon, K.C. and Travis, J., 2007). Although the terms Internet and World
Wide Web are often used interchangeably, they are actually two very different things. The
Internet is a worldwide network of computer networks, and the World Wide Web is one of
the Internet’s most popular services, providing access to over 8 billion Web pages. The
history of e-commerce came along with the history of the internet itself, e-commerce has
become a huge part of today’s business. Many definitions about e-commerce are stated.
Some of them agree that e-commerce is defined as the conduct of financial transaction by
electronic means, where the buying and selling of products and services by business and
consumers over the internet6. It is also include to the sum of commercial activities and non-
profit business or service activities with the application of modern computer, network
technology and modern information communication technology and it is a new form of
trade emerged with the application of electronic information technology in trade field
(Sixun, 2013). In WTO paper (2013), they mentioned that e-commerce as the sale or
purchase of goods or services conducted over computer networks by methods specifically
designed for the purpose of receiving or placing of orders. Even though goods or services
are ordered electronically, the payment and the ultimate delivery of the goods or services 6 http://www.straight-on.com/ecommerce_definition.htm
5
do not have to be conducted online. Its transaction can be between enterprises, households,
individuals, governments, and other public or private organizations. Included in these
electronic transactions are orders made over the web, extranet or electronic data
interchange. The type of transaction made is defined by the method of placing the order.
Normally excluded are orders made by telephone calls, fax or manually typed e-mails.
According to Wikipedia, electronic commerce draws on technologies such as mobile
commerce, electronic funds transfer, supply chain management, Internet marketing, online
transaction processing, electronic data interchange (EDI), inventory management systems,
and automated data collection systems. Modern electronic commerce typically uses the
World Wide Web for at least one part of the transaction's life cycle, although it may also
use other technologies such as e-mail7. The changing market represents a vast opportunity
for businesses to improve their relevance and expand their market in the online world. The
tools and techniques to enable trading over the Internet are becoming mature, and
electronic commerce is growing very rapid. In these days, many commercial web sites
have catalogues and support online transactions, however electronic commerce is much
more than those. It includes everything from sourcing to settlement and all the processes
that underlie trading. The Internet’s WWW has become the primary driver of
contemporary electronic commerce. Although the emphasis has moved from electronic
data interchange (EDI) to the Internet, the focus is still on the technology required to
exchange information rather than supporting inter- and intra – organizational business
processes (Gunasekaran, Marri, McGaughney & Nebhwan, 2002). Electronic commerce is
not just about facilitating individual business transactions, it also involves the management
of the relationships that lead to and arise from transactions (VanderAalst, 1999). The
success and volume of electronic commerce on the web has been widely known and
reported. With success in establishing an environment in which e-commerce can grow and
flourish, every computer can become a window to open every business, large and small,
around the globe. (Gunasekaran, Marri, McGaughney & Nebhwan, 2002).
The electronic medium we call the Internet has the potential to reduce actual transaction
time and processing time dramatically, while at the same time making information
available globally. Internet-based electronic commerce has been embraced as a means of
reducing operational cost and as a high potential means of generating revenue. The
ubiquity of the web and the availability of browsers across different platforms provide a
common base upon which electronic commerce applications can be built, especially in the
7 http://en.wikipedia.org/wiki/E-commerce
6
enterprise (Bartell et al., 1999). Electronic commerce provides new channels for the global
marketing of tangible goods and presents opportunities to create new businesses providing
information and other knowledge-based intangible products. The Internet is the most
obvious example of this and a major catalyst in the diffusion of electronic commerce,
helping to foster a common environment for electronic transactions of all kinds (OECD,
1997). In the meantime, Kalakota and Whinston (1997) define electronic commerce from
these four perspectives: (a) communication perspective – electronic commerce is the
deliverer of information, products/services or payments over telephone lines, computer
networks or any other electronic means, (b) business process perspective – electronic
commerce is the application of technology towards the automation of business transactions
and work flows, (c) service perspective – electronic commerce is a tool that addresses the
desire of firms, consumers and management to cut service costs while improving the
quality of goods and increasing the speed of service delivery and (d) online perspective –
electronic commerce provides the capacity to buy and sell products and information on the
Internet as well as other online services. So it is obvious that electronic commerce can be
described in many ways. But perhaps the most useful description of e-commerce would
link it to trade, by means of new communications technology. E-commerce is actually a
generic title that describes a range of technologies and practices that are now available to
improve the effectiveness of trading relationships (Gunasekaran, Marri, McGaughney &
Nebhwan, 2002).
2.2 Types of e-commerce
E-commerce can occur within and between three basic participant groups –business,
government, and individuals (see Figure 2.1).
7
Figure 2.1
Three Basic Participants in E - commerce
In general, there are four fundamental types of e-commerce:
a. Business-to -Business (B2B)
The term "Business to Business" was initially used to describe electronic
communications between businesses, to distinguish these from communications
between businesses and customers (B2C). Nowadays it is used to describe all transfers
of products and services between businesses. B2B is also used to describe activities,
such as B2B marketing, or B2B sales, that take place between businesses8. In a
Business-to-Business (B2B) e-commerce environment, companies sell their online
goods to other companies without being engaged in sales to consumers. In most B2B e-
commerce environments entering the web shop will require a log in. B2B web shop
usually contains customer-specific pricing, customer-specific assortments and
customer-specific discounts9. Pricing is based on quantity of order and is often
negotiable10. So, B2B e-commerce can be simply defined as e-commerce between
companies with relationships between and among businesses11. Far more B2B
transactions take place than B2C transactions, largely because a number of B2B
transactions are required to produce an item which is finally sold in a single B2C
transaction. For example, a soft furnishings manufacturer may have to make several
B2B transactions to buy wood, fixings, covering and stuffing materials and springs in 8 http://www.sqa.org.uk/e-learning/ECIntro01CD/page_02.htm#B2B9 http://en.wikipedia.org/wiki/Types_of_e-commerce#Business-to-Consumer_.28B2C.29 10 http://www.digitsmith.com/ecommerce-definition.html 11
https://en.wikibooks.org/wiki/E-Commerce_and_E-_Business/Concepts_and_Definitions#What_are_the_different_types_of_e-commerce.3F
8
Source : El Gawady (2005)
order to produce a three-piece suite that is sold as a single B2C transaction12. The B2B
market has two primary components: e-frastructure and e-markets. E-frastructure is the
architecture of B2B, primarily consisting of the following:
- logistics - transportation, warehousing and distribution (e.g., Procter and Gamble);
- application service providers - deployment, hosting and management of packaged
software from a central facility (e.g., Oracle and Linkshare);
- outsourcing of functions in the process of e-commerce, such as Web-hosting,
security and customer care solutions (e.g., outsourcing providers such as eShare,
NetSales, iXL Enterprises and Universal Access);
- auction solutions software for the operation and maintenance of real-time auctions
in the Internet (e.g., Moai Technologies and OpenSite Technologies);
- content management software for the facilitation of Web site content management
and delivery (e.g., Interwoven and ProcureNet); and
- Web-based commerce enablers (e.g., Commerce One, browser-based, XML-
enabled purchasing automation software)13.
E-markets are simply defined as Web sites where buyers and sellers interact with each
other and conduct transactions. The more common B2B examples and best practice
models are IBM, Hewlett Packard (HP), Cisco and Dell. In Cisco, for instance, receives
over 90% of its product orders over the Internet. Most B2B applications are in the areas
of supplier management (especially purchase order processing), inventory management
(i.e., managing order-ship-bill cycles), distribution management (especially in the
transmission of shipping documents), channel management (i.e., information
dissemination on changes in operational conditions), and payment management (e.g.,
electronic payment systems or EPS).
b. Business-to-Consumer (B2C)
The Business-to-Consumer type of e-commerce is distinguished by the establishment
of electronic business relationships between businesses and final consumers. It
corresponds to the retail section of e-commerce, where traditional retail trade normally
operates. These types of relationships can be easier and more dynamic, but also more
sporadic or discontinued. This type of commerce has developed greatly, due to the
advent of the web, and there are already many virtual stores and malls on the Internet,
12 http://www.sqa.org.uk/e-learning/ECIntro01CD/page_02.htm#B2B 13
http://en.wikibooks.org/wiki/E-Commerce_and_E-business/Concepts_and_Definitions#What_are_the_different_types_of_e-commerce.3F
9
which sell all kinds of consumer goods, such as computers, software, books, shoes,
cars, foods, financial products, digital publications, etc14. B2C e-commerce reduces
transactions costs (particularly search costs) by increasing consumer access to
information and allowing consumers to find the most competitive price for a product or
service. B2C e-commerce also reduces market entry barriers since the cost of putting
up and maintaining a Web site is much cheaper than installing a “brick-and-mortar”
structure for a firm. In the case of information goods, B2C e-commerce is even more
attractive because it saves firms from factoring in the additional cost of a physical
distribution network. Moreover, for countries with a growing and robust Internet
population, delivering information goods becomes increasingly feasible15.
As a matter of fact, the B2C type is the second largest and the earliest form of e-
commerce. Its origins can be traced to online retailing (or e-tailing). Thus, the more
common B2C business models are the online retailing companies such as
Amazon.com, Drugstore.com, Beyond.com, Barnes and Noble and ToysRus. Other
B2C examples involving services are Trenitalia and Travelocity.
c. Consumer-to-Consumer (C2C)
Consumer-to-Consumer (C2C) type e-commerce encompasses all electronic
transactions of goods or services conducted between consumers. Generally, these
transactions are conducted through a third party, which provides the online platform
where the transactions are actually carried out16. To be simplified, C2C is simply
commerce between private individuals or consumers. Not to mention, this type of e-
commerce is characterized by the growth of electronic marketplaces and online
auctions, particularly in vertical industries where firms/businesses can bid for what
they want from among multiple suppliers. It perhaps has the greatest potential for
developing new markets. This type of e-commerce comes in at least three forms:
- Auctions/ bid facilitated at a portal as it is already mention above, such as eBay,
which allows online real-time bidding on items being sold in the Web;
- Peer-to-peer systems, such as the Napster model (a protocol for sharing files
between users used by chat forums similar to IRC) and other file exchange and later
money exchange models; and
14 http://bloomidea.com/en/blog/types-e-commerce 15 https://en.wikibooks.org/wiki/E-Commerce_and_E-Business/Concepts_and_Definitions 16 http://bloomidea.com/en/blog/types-e-commerce
10
- Classified ads at portal sites such as Excite Classifieds and eWanted,
Pakwheels.com (an interactive, online marketplace where buyers and sellers can
negotiate and which features “Buyer Leads & Want Ads”)17.
Another popular area for customer to customer transactions is online classified
advertising sites, such as Craigslist and Gumtree. Major online retailers like Amazon
also allow individuals to sell products via their sites.
C2C is expected to increase in the future, again, because it minimises the costs of using
third parties. However, it does suffer from some problems, such as lack of quality
control or payment guarantees and there can sometimes be difficulties in making
credit-card payments.18
d. Consumer-to-Business (C2B)
In C2B there is a complete reversal of the traditional sense of exchanging goods. This
type of e-commerce is very common in crowdsourcing based projects. It is the most
recent e-commerce business model, where a large number of individuals make their
services or products available to purchase where companies seeking precisely these
types of services or products by making an offer for those enterprises which are
prepared to purchase them. This business model is the opposite of the traditional B2C
model19.
C2B has come about as a result of two major changes. Unlike traditional media, which
are unidirectional, the Internet is bidirectional, making this type of relationship
possible. In addition, the decline in the cost of technology means that individuals now
have access to technologies such as powerful computer systems, audio and video
capture systems and other digital technologies that were once the exclusive province of
large companies.
Examples of such practices are the sites where designers present several proposals for a
company logo and where only one of them is selected and effectively purchased.
Another platform that is very common in this type of commerce will be the markets
that sell royalty-free photographs, images, media and design elements, such as
iStockphoto. Another example can be seen from Elance which was one of the first web
sites to offer this kind of C2B transactions. It allows sellers to advertise their skills and
17 https://en.wikibooks.org/wiki/E-Commerce_and_E-Business/Concepts_and_Definitions 18 http://www.sqa.org.uk/e-learning/ECIntro01CD/page_04.htm#C2C 19 http://bloomidea.com/en/blog/types-e-commerce
11
prospective buyers to advertise projects. Similar sites such as Peopleperhour and Guru
work on the same basis20.
There are other forms of e-commerce that involve transactions with the government.
Activities from procurement to filing taxes to business registrations until renewing
licenses such as: G2G (Government-to-Government), G2E (Government-to-
Employee), G2B (Government-to-Business), B2G (Business-to-Government), G2C
(Government-to-Citizen) and C2G (Citizen-to-Government). There are other categories
of e-commerce out there like Business-to-Administration (B2A) and Consumer-to-
Administration (C2A), but they tend to be superfluous.
2.3 The implementation of e-commerce
The internet represents a technological innovation that has transformed the way in that we
live and work. Telecommunication organizations and governments are making huge
investments in developing the network infrastructure, and many programs have been
developed to enable the exchange of e-communication, databases, and commercial
transactions via the world wide web (WWW) (Tan and Teo, 1998).
Applegate et al. (1996) have discussed the implications of e-commerce on organizational
performance and research agenda. E-commerce involves more than just buying and selling
and encompasses the range of pre-sale efforts. As well as a host of ancillary activities,
these include new approaches to market research, generation of qualified sales leads,
advertising, product purchasing and distribution, customer support, recruiting, public
relations, business operations, production management, knowledge distribution, and
financial transactions. These activities affect strategic planning, entrepreneurial
opportunities, organizational design and performance, business law, and taxation policies.
In the meantime, Lee et al. (1998) presented the results of an empirical study that used
structured interviews with 110 companies in South Korea. As noted above, the results
supported the hypothesis that electronic data interchange (EDI) controls affect its
implementation. Moreover, economic and cultural environments can affect the causal
relationship between controls and implementation.
Hoffman et al. (1995) proposed a structural framework for examining the explosion in
commercial activity on the web. They classified current commercial web site designs as:
online storefront; internet presence; content; mall; incentive site; and search agent.
20 http://www.sqa.org.uk/e-learning/ECIntro01CD/page_05.htm#C2B
12
Kalakota and Whinston (1997) classified activities on such sites as advertising, sales, and
customer oriented e-commerce activities. Ngai and Wat (2002) highlighted that e-
commerce in general can be applied in order to enhance these succeeding uses:
1. Interorganizational systems
According to Turban et al. (2000), an IOS is a unified system involving several
business partners. Typically, they employ electronic data interchange (EDI), extranets,
electronic funds transfer (EFT) and computer based supply chain management systems
2. Electronic payment systems
This covers systems for online financial exchange between buyers and sellers. This
exchange is usually in some form of digital financial instrument, such as e-cash, smart
cards, credit/debit cards, and electronic checks.
3. Financial services
This covers the common financial services provided in electronic commerce, including
online stock trading and virtual, home, and online banking. Various activities can be
conducted from home, business, or on the road, instead of at a bank location.
4. Retailing
This contains various publications associated with topics of retailing in electronic
commerce, including online and electronic shopping malls. Electronic retailing can use
either CD-ROM or the Internet as a channel to sell company products or services
5. Online publishing
This contains publications that relate to electronic delivery of newspapers, magazines,
news, and other information through the Internet.
6. Auctions
This contains published literature related to electronic auctions. Electronic auctions are
similar to traditional ones but they are performed through the computer.
7. Intraorganizational of e-commerce
This deal is helping a company to maintain and support internal business processes
between individuals, departments and collaborating organizations. The Intranet is the
popular internal network that links organizational employees by means of Internet
technology.
8. Education and training
13
This covers published literature on education or training pertaining to on-line
education and virtual classrooms. The educational instruction is delivered
electronically.
9. Marketing and advertising
This consists of the application of e-commerce to marketing and advertising, including
brand-name management, disseminating product catalogs, and sales information and
product announcements.
10.Other applications
This contains publications that discuss applications that are not among those in the
above categories, such as Internet gambling, etc.
However, apart from that, Gunasekaran and Ngai (2005) presented some major factors that
also can influence the application and implementation of e-commerce, namely: perceived
usefulness of web; perceived barriers of the internet for e-commerce; usage of the internet;
and perceived benefits of the internet for e-commerce. The model and its details are shown
below.
Figure 2.2
A Conceptual Framework for The Application and Implementation of E-commerce
14
Source: Gunasekaran and Ngai (2005).
2.3.1. Usage of internet from application perspective
The overall usage on the internet influences the success of e-commerce in a country.
For example, in some countries, the internet is mostly used for messaging and browsing,
and not for buying or selling products or downloading files. This might be due to an overall
understanding as represented in the culture of buying and selling behavior in a particular
country. The level of internet usage also indicates the extent to which internet technology
is popular in a country. In addition, the reliability and speed of the internet influences the
level of internet usage, and hence its wider applications, including e-commerce. Cos t of
internet time plays a major role in purchasing products and downloading files. Lack of
government support in making internet connections available (for example, by liberalizing
telecommunication sector policies) plays a part (Gunasekaran and Ngai, 2005).
2.3.2. Perceived usefulness of web pages
The perceived usefulness of web pages plays an important role in e-commerce application
and implementation. Most people believe that web can improve exposure from the supplier
perspective, and can increase access to global information on a variety of topics (including
products and services, politics, stock markets, travel, and so on). Because the internet has
24-hour access worldwide, companies believe that having a web page enhances their
visibility and presence, it also indicates that the company is technologically advanced. This
also provides a foundation for migrating to advanced information technologies and
systems. It might also influence overall organizational competitiveness in long-term. Web
sites offer a range of benefits to an organization, including reduced transaction times and
reduced advertising and transaction costs (Isakowitz et al., 1998).
2.3.3. Perceived benefits of the internet for e-commerce
Using the internet for business is popular nowadays, and this provides the advantage of
variety and a new channel for commerce (Walters and Lancaster, 1999). According to
Michalski (1995), the internet provides global access at a relatively low cost. It allows
firms to have a “virtual front door” to customers through a home page, as well as creating
useful interactions with customers, suppliers, and stakeholders. In addition, it provides a
simple illustration of the broad application of e-commerce. A review of the literature
indicates the following as being the major benefits of the internet for e-commerce: quick
response and access to global information; improvement in customer service by
establishing effective lines of communication; a platform for low-cost advertising and
15
hence for selling and buying products; low-cost entry for a network of firms for possible
strategic alliances and collaboration; and the potential for a global market. In addition to
this, there are intangible benefits which include strategic opportunities, a company image
associated with modern technology, and easy migration to the next level of technology.
2.3.4. Perceived barriers of the internet for e-commerce
The success of application and implementation depends upon recognizing the barriers
presented by the internet for e-commerce. Once a company is able to identify these
barriers, it can determine strategies and technologies to overcome them.
Riemenschneider and McKinney (1999) have stated that the obstacles for assessing the
adoption of e-commerce are security, cost, training, technical knowledge, and adherence to
corporate standards. Scupola (2001) has distinguished three categories of barriers to
adoption for internet commerce. The first category is the “perceived costs”, which include
financial investment, administrative changes, and the time it takes to put the system in
place. The second category is the “organizational readiness”, which is the extent to which
an organization is ready to adopt e-commerce – such as skills and knowledge of
information technology, internal IT support, and support form external parties such as IT
vendors. The third category is “external environment”, which includes government
regulation and trading partners.
2.4 Benefits realized by utilizing e-commerce
With technological innovations and rapid development of electronic commerce, customer
value perception is fundamentally changed. Kalakota and Robinson (1999) have redefined
the value of the customer’s experience as the ability of an electronic commerce company to
streamline the end-to-end experience, which provides a complete solution around a
commodity, product, or service offered by the e-commerce company. That is, customer
value spurs innovation across all service dimensions: speed, convenience, personalization,
and price. Gunasekaran and Ngai (2005) asserted that e-commerce promotes open
communication and a virtual interactive environment in which suppliers and customers can
exchange information and products. E-commerce improves communication among partners
along a value chain and offers an integrated business model by which companies can be
responsive and flexible to changing market and customer requirements. This has become
part of daily life, and it is difficult to imagine an organization without some form of e-
commerce application.
16
The argument in favor of moving to e-commerce is a belief that electronic markets have
the potential to be more efficient in developing new information-based goods and services,
and in finding global customers and trading partners with whom to conduct business. E-
commerce, via the internet or the next generation of internet protocol, will change business
institutions, operations, and products and services, as we know those today, just as the
telephone, television, fax, and e-mail have changed the way businesses and consumers
communicate. E-commerce brings the benefits of product promotion, cost saving, timely
information, shortened remittance time, information consistency, better customer service,
and better customer relationships, customization of products, competitive advantages, and
convenience of doing business (Wen et al., 2001). Poon and Swatman (1998) believed that
if companies increase to setting up their own corporate local area networks (LANs) by
intranet, and, by applying extranet and internet, can remove physical barriers to commerce
almost immediately, giving even the smallest business access to untapped markets around
the world.
Daniel and Wilson (2002) propounded that there are four benefits of using e-commerce.
First, for customer activity, business which adopts e-commerce can enhance the delivery of
the services to the customers. Ghosh (1998) mentioned how companies can develop
enhanced services by personalizing the interaction with the customer, by tailoring the
information and options the customer sees when at the company's web site. Besides that, e-
commerce can also offer the opportunity for firms to offer their services or products
outside normal opening hours. This is likely to aid in attracting customers in overseas
markets, but can also prove attractive for customers in the home market (Daniel and
Wilson, 2002). From marketing perspective instead, companies can advertise and build the
brand image to all consumers in the world all the time. Not only that, the most important
thing, it is not limited by time where customers can look and buy product all the time,
which is different with traditional buying.
Second, in the hyper-competition, the adoption of e-commerce gives an opportunity for
business to create superior value to the customers, because customers can get efficiency,
practicality, and easiness in terms of buying. Porter (2001) forecasts that e-commerce
reduces the difference among competitors offerings and frequently migrates competition to
price, rather than product features or brand perceptions.
Third, from internal business processes side, e-commerce offers cost saving. The cost
saving may arise due to the lower cost acquiring the new customers (Watson, et al., 1998),
although evidence now suggests that cost of customer acquisition may in many cases be
17
higher than for more traditional channels (Hoffman and Novak, 2000) and, indeed, much
of any benefit in the reduction in search costs may pass to buyers and not suppliers (Porter,
2001). Another source of significant cost savings is the elimination of paper within an
organization and the associated delays and re-keying of information that is often associated
with paper-based systems. The electronic handling of information within an organization
can improve both the processing time and accuracy of information, often resulting in
significant cost savings. It is this improvement in information handling within firms, and
its consequent cost savings, that many traditional IT systems have been directed towards.
Indeed Venkatraman (1994) suggests that firms pass through a number of stages in their
adoption of traditional IT systems, which commence with systems that are located within
the firm, initially within just one department, and aimed at the achievement of cost saving
via improved efficiency. Later stages of adoption see firms developing systems that link
various departments within the firm and finally systems that extend beyond the firm to
establish electronic links with customers and suppliers. Another significant reducing cost is
from the elimination of paper for communication within organization (internal) or with
external (supplier, buyer and partner).
Fourth, in perspective of supplier activity, e-commerce offers companies an access to a
greater number of suppliers and it is likely increase their power over suppliers and hence
result in the lowering of prices of goods purchased (Naim, 2000). Jacobs and Dowsland
(2000) found that, the lowest use of e-commerce was for that of purchasing. Larger
companies may often be able to negotiate reduced purchasing terms, due to the larger
volumes that they buy. If larger companies make use of e-commerce to buy their goods and
services they may be able to extend their current purchasing advantage over smaller
companies even further. E-commerce also permits companies easier to communicate and
keep their relationship with suppliers. The benefits describe above usually to be the factors
that underlying business that adopts e-commerce.
Sixun (2013) agreed that e-commerce stimulates economic growth through the
consumption, investment, government purchase and net export (export – import), where
the formula of GDP itself is composed by C + I + G + (X - M). Firstly, the development of
e-commerce has led to the development of some emerging industries such as logistics, and
created more jobs in industries such as computers and the internet, thus stimulates the
consumption. Since e-commerce has provided people with a wide variety of products and
met people's material and cultural needs to a greater extent, more and more consumers
have been keen in online shopping, increasing the consumption spending. E-commerce,
18
with its efficiency and convenience and the characteristics of breaking through the limit of
time and space, it has largely attracted businesses and consumers, both of which can work
together to promote economic development. Besides, if consumers are optimistic about the
prospects of e-commerce, they will spend more on things such as computers, which will
also lead to the increase of consumption. Secondly, in terms of investment, to compete for
the customers, all e-commerce companies must guarantee to provide items within the scope
of the time and place specified by the customers to meet their demands, which will require
a large amount of money in related areas such as quantitative stock, transport
infrastructure, leading to the increase in fixed capital investment. The prosperity of e-
commerce has also brought the prosperity of other industries, such as the advertising
industry. The development of e-commerce has promoted the development of network
advertisement and stimulated the potential of advertising investment demand. From a
practical point of view, e-commerce can expand the sources of funding and support the
construction of economic system. Thirdly, in order to meet the transportation demands
required by the rapid development of e-commerce, the increasing demands for related
roads and transportation means, which will lead to a corresponding increase of government
procurement in this area. Similarly, in response to the growth of auxiliary services
demands, infrastructures such as power generation and communication network must be
upgraded, which will also increase government procurement expenditures. In addition, due
to the strict requirement of e-commerce on network data security, corporate business credit
and personal credit, government will increase related procurement expenditures to ensure
the normal operation of e-commerce. Finally, since e-commerce has achieved a smooth
flow of information dissemination, it is beneficial to help improve the international
reputation of its enterprise products and services, which undoubtedly has played an
important role in expanding exports. Besides, the applications of e-commerce enable us to
participate in the international market competition more effectively and gain advantages
and initiative to obtain greater benefits in the process of economic globalization and
promote rapid and healthy development of economy.
2.5 Factors that hinder the adoption of e-commerce
There are many factors could be responsible for the low usage of e-commerce. According
to MacGregor and Vrazalic (2005), some of the factors are include the high costs
associated with e-commerce, lack of technical resources and expertise to implement e-
commerce, the complexity of e-commerce technology and the difficulty of measuring the
19
return on investment. The preceding reports by OECD (1998) on hindrances to e-
commerce adoption in OECD countries suggested that those hindrances are lack of
understanding and awareness about e-commerce benefits, security concern, lack of
products suitable for e-commerce, set-up cost and lack of Internet legal system. A more
updated survey by OECD (2002) showed that barriers to e-commerce among businesses
remain basically unchanged, where slackness in Internet security is the main concern.
Another findings by Pease and Rowe (2003) such as lack of awareness and understanding
of e-commerce, lack of skill and time to implement e-commerce, resistance to
technological changes, cost of implementation, lack of awareness of the benefits associated
with the adoption of e-commerce, concern about security and privacy, lack of suitable
software standards, lack of easy accessibility and bandwidth and infrastructure issues. On
the other hand, telecommunication infrastructure issues could be linked to insufficient
support from the government.
Research by Raymond (2001) found that adoption of innovative technologies could be
influenced by environmental and organizational factors. One of the organizational factors
is the lack of resources. In addition, Auger et al. (1997) identified the following factors that
might hinder the adoption of e-commerce, namely, the problem in tracking online users,
security issues, bandwidth problem, insufficient company resources – in terms of
availability of qualified IT personnel and suitability of products that could be marketed
online. Besides, earlier study by Hoffman et al. (1995) asserted that the main obstacle
related to e-commerce adoption is Internet accessibility problem, which includes issues
such as insufficient bandwidth, security and privacy and technological issues.
Another from Quayle (2002) who stated that e-commerce is too complex to implement,
which hamper the growth of e-commerce usage. Not to mention, preference for and
satisfaction with traditional manual methods, such as phone, fax and face-to-face
(Venkatesan and Fink, 2002), lack of direction, lack of available information about e-
commerce, heavy reliance on external consultants (who are often considered by small
businesses to be inadequate) to provide necessary expertise (Lawrence, 1997), lack of
critical mass among customers, suppliers and business partners to implement e-commerce
(Hadjimonolis, 1999) and lack of e-commerce standards (Tuunainen, 1998).
Ngai and Wat (2002) believed that technological issues can also hamper e-commerce
adoption whether in a country or firm, they categorized all the issues into six, which are:
1. Security
20
This consists of publications that discuss issues related to data and system security.
In data security, the common topics are related to encrypting methods, such as
private or public key cryptography. Moreover, secure sockets layer (SSL) secure
electronic transactions (SET) and cookies are other popular technologies available
to help protect privacy and security online. Individual security can include
passwords or digital signatures. In addition, firewalls, proxy servers, and virtual
private networking can ensure system security for protecting the network against
external and internal attacks, such as hackers. Therefore, these technologies can
prevent loss of data in order to preserve internal and external services (Rockwell,
1998).
2. Technological components
This consists of various Internet technologies, e.g. the common object request
broker architecture (COBRA), software agents, mobile agents, bidding and
negotiation which are distributed object management and agent software helping
users in solving business problem (Adam et al., 1999). Furthermore, markup
languages, such as standard generalized markup language (SGML), hypertext
markup language (HTML), extensible markup language (XML) and programming
languages like JAVA are the common Web software developmental tools.
3. Network technology/infrastructure
This covers network technology that is at a lower-level; e.g. network protocols,
hypertext transport protocol (HTTP) and transmission control protocol/Internet
protocol (TCP/IP), plus network management issues, like quality of service (QOS).
4. Support systems
This covers literature on decision support systems or distributed applications.
5. Algorithm/methodology
This covers technical algorithms or methodologies that assist, enhance, or improve
e-commerce applications.
6. Other technical issues
This contains publications that discuss other issues such as decision technologies.
Also according to The World Trade Organization (WTO) and the Free Trade Area of the
Americas (FTAA), there are seven areas which are considered to be issues that require
review and reconsideration (Damanpour, 2001).
1. Domestic Regulation Issues Related to E-Commerce
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Varying degrees of domestic regulation currently exist in WTO countries.
However, there are no clear-cut guidelines regarding the potential international
implications of domestic regulation. The European Union (EU) Directive on the
Protection of Personal Data requires EU member states to apply regulatory tests to
both ends of cross-border data transaction, but no regulation outside their
boundaries. Therefore, EU member states must enact legislation to ensure that
transfers of personal data outside their boundaries are allowed only to jurisdictions
offering “adequate” protection to that data. For example, a non-EU company
established in the EU would be limited in its ability to transfer data back to its head
office outside the EU, if the head office were located in a jurisdiction that did not
meet the EU adequate test.
2. Consumer Issues Related to Internet
At present there is little consumer protection on the Internet other than that offered
by the corporate sector. Consumers must basically trust that the company they are
dealing with is actually who it claims to be, is located where it claims to be, and
will provide the product and after-sales service it commits to. Resolution of any
disputes arising from an electronic transaction depends both on the willingness of
the companies involved to resolve the dispute and possibly on the consumer
protection laws in those companies’ home jurisdiction.
Another consumer issue is the accreditation of professionals who offer services via
the internet such as medical diagnostics, legal advice, accounting services,
architectural services. In this case, the inter-jurisdictional authentication of
credentials will be difficult.
3. Developing Countries and E-Commerce
The Internet presents special challenges for developing countries. While it can
disseminate cheap, fast, interactive information, it is highly dependent on
infrastructure and associated operating standards. In e-commerce, developing
countries face key problems of improving infrastructure and user accessibility.
Naturally, they need help from advanced nations to participate in trade obligations
related to e-commerce. This can be achieved via several initiatives:
Provide technical assistance and encourage also promote education related to e-
commerce.
Emphasize the potential benefits of e-commerce for LDCs (Least Developed
Countries).
22
Ensure that developing countries are able to participate in world for on the
subject.
Consider flexibility in trade agreements for developing nations on e-commerce
coverage.
4. Internet E-Commerce and Taxes or Duties
Currently, companies engaged in Internet commerce are taxed under the normal
income tax law prevailing in the jurisdiction where they are located, and customs
duties also apply for goods. Some countries, like Canada, charge sales taxes (GST)
on the provision of the service. In their 1998 ministerial declaration, WTO
ministers made a political commitment not to introduce duties on electronic Internet
transactions. The issues were addressed again at the third WTO ministerial meeting
in November 1999, but they reached no agreement. WTO ministers agreed to
impose no new duties on E-commerce, and continue the commitment until a future
date. If electronic deliverables were considered dutiable, they would have to be
classified as “goods” under the General Agreement on Tariffs and Trade (GATT).
5. Health and Education Services and E-Commerce
In Canada and Europe, health and educational services are mainly supplied by the
public sector and they are free. In the United States, they are privately owned and
services are provided at different fees. Tele-medicine is an emerging field that
consists of everything from medical advice on a long-distance line for a fee, to long
distance diagnoses of a patient in one city by a doctor in another city. Universities
are now offering courses to students through the Internet and have been offering
distance education programs for some time. New technologies have the potential to
improve access to health and educational services that would otherwise not be
available to people in remote areas or for people who are unable to access these
services (disabled, elderly, shiftworkers, etc.). As these technologies evolve further,
it is likely they will become more accessible and more user friendly. Furthermore,
private sector service providers will want to have access to the market of
WTO/FTAA/NAFTA parties.
6. E-Commerce and Labor
This issue is very difficult to deal with and may require special attention. A
company could hire employees to work online from sites around the world though
23
it may not have any corporate presence in the country where the workers live.
Questions could arise relating to the accountability of the company for failure to
pay wages, responsibility to pay health and safety premiums and accountability in
the courts for unjustified firings and other related issues. Furthermore, the
educational requirements and credentials of the professionals may differ
significantly in different jurisdictions and jurisdictions with less stringent
requirements may have advantage over other jurisdictions.
7. Intellectual Property Issues Related To E-Commerce
Global electronic trade raises issues concerning intellectual property (IP), i.e.,
issues related to copyrights, patents, trademarks, and data-protection. The
resolution will require a coordination of domestic regulations and international
cooperation. In 1994, the WTO finalized the Agreement on Trade-Related Aspects
of Intellectual Rights (TRIPS Agreement). It deals with some of the “digital IP”
issues identified before the Uruguay Round of negotiations were concluded; but it
failed to anticipate the growth of the Internet and associated IP issues. International
law has addressed to a greater degree than TRIPs the issue of copyright and
protection of works in a digital environment in the World Intellectual Property
Organization’s (WIPO) Copyright Treaty (WCT) and in the WIPO Performances
and Phonograms Treaty (WPPT). But it has not dealt with jurisdiction,
enforcement, and conflict of laws in an international context, protection for
databases, the role and liabilities of telecommunications and Internet service in
protecting IP, and the issue of trademarks.
24
CHAPTER III
STUDY AND FINDINGS
Contents: 3.1 Usage of e-commerce application in Indonesia and Italy - 3.2 Benefits
realized through adoption of e-commerce in Indonesia and Italy - 3.3 E-commerce
contribution toward retail sales in Indonesia and Italy - 3.4 Factors which hinder the
adoption of e-commerce to advance in Indonesia and Italy
3.1 Usage of e-commerce application in Indonesia and Italy
E-commerce would not be existed without a profound expansion of the internet. Thanks to
it, human being nowadays can enjoy the benefits after e-commerce has been discovered.
Number of internet users is one of many factors which affect whether e-commerce can be
succeeded or not in a country. Below are the numbers of internet users in Indonesia,
25
Chart 3.1
Number of Internet Users in Indonesia from 2013 to 2018 (in millions)
Above statistic shows the number of internet users in Indonesia from 2013 to 2018. In
2013, 72.8 million people were accessing the internet in Indonesia. This figure is projected
to grow to 102.8 million in 2016. With over 71 million internet users, Indonesia is one of
the biggest online markets worldwide. As of the first quarter of 2015, online penetration in
the country currently stands at only 28 percent. The average number of hours spent online
by internet users in Indonesia was 5.1 per day. Popular online activities include mobile
messaging and social media. The most popular social network in Indonesia is Facebook
with 14 percent of the population actively using the platform. Indonesia is also one of the
LINE chat app’s strongest markets with more than 30 million users. Mobile internet usage
is undergoing double-digit growth rates and currently stands at close to 30 percent among
the population. Indonesia was listed as “partly free” in the Freedom on the Net index,
which places the country ahead of less free Asian online markets such as China, Thailand
or Malaysia but behind Japan, South Korea and the Philippines. This rating is due to
blocked political and social content as well as various restrictions and violations of user
rights, most notably through the governmental passing of the Law on Information and
Electronic Transactions (ITE Law). The ITE law holds strong penalties such as prison
sentences and high fines for anybody convicted of online defamation charges. This law has
26
also been applied to blog posts and Facebook comments and has leaded to self-censorship
among online writers and internet users as well as an increasingly tense online
atmosphere21.
However, in comparison with other members of ASEAN countries in 2012, internet users
in Indonesia are still far way behind these countries. As we can see below, Indonesia who
has GDP nominal four times higher than Philippine cannot surpass the numbers of internet
users where Tagalog is the official language for this country, it is quite surprising how
Indonesia cannot benefit its GDP surplus at least to level the numbers from Philippine
users.
Chart 3.2
Internet Penetration Rate in Indonesia by 2012
Back to 2010, there was an official census conducted by ASEAN, it was believed that
internet penetration in Indonesia is considered low compared to other ASEAN countries
like Brunei Darussalam, Malaysia, Philippines, Singapore, Thailand and even Vietnam.
That condition indicates a disadvantage for Indonesia considering it has the largest
population during 2010 and until now22. However, by the end of 2012, Indonesia made an
improvement as the number of internet users had reached 55 million people respect to two
years behind with the rough number around 30 million people. The figure below shows 21 http://www.statista.com/statistics/254456/number-of-internet-users-in-indonesia/ 22
http://www.sqa.org.uk/e-learning/ECIntro01CD/page_05.htm#C2B
27
ranks the economies from highest to lowest Internet penetrations rates, where Indonesia
placed in 7th rank by the end of 2010. It is a pity considering Indonesia has the biggest
population among ASEAN countries, but in terms of internet users both government and
its people itself still cannot advantage the existence of internet and e-commerce.
Table 3.1
Internet Penetration, Population and Internet Users in ASEAN by 2010
Source: ASEAN E-Commerce Database Project (2010).
In this regard, Brunei Darussalam (81%), Singapore (78%), and Malaysia (65%) can be
considered as the most successful in terms of encouraging usage and providing its
population with Internet access having the highest Internet Penetration Rates.
Most ASEAN countries access the Internet through the personal computer only. However,
it is important to note that more than 25% of respondents in all countries access the
Internet with personal computer and mobile device, showing a very important trend in the
diversification of Internet access from the traditional personal computer.
The number of the Internet users surveyed who had no Internet connection at home
indicating that they go online using an office computer, a privately-shared computer, or
from Internet café. More than 10% of Internet users in Indonesia do not have a connection
at home while the rest of the ASEAN had less than 7% of which had no Internet
connection at home. Nearly every online user in Brunei Darussalam and Singapore has
home based Internet connections. It is considered that those two countries are the most
advanced countries amongst the members of ASEAN countries and only those two are
considered as countries which have high level of income according to report which
conducted from worldbank.org23 24.
23 http://data.worldbank.org/country/brunei-darussalam 24 http://data.worldbank.org/country/singapore
28
Chart 3.3
Percentage of Web Access through devices in ASEAN Countries
Source: ASEAN E-Commerce Database Project (2010).
Wired and wireless broadband connections are the most dominant Internet connection used
by more than 40% of Internet subscribers in all countries.
Singapore and Brunei Darussalam had the most number of respondents that access the
Internet both through a mobile device and personal computer. Those indicate how advance
the Internet infrastructure and availability of mobile Internet devices in those two
countries. They also represent the largest GDP per capita and the smallest land areas
among the ASEAN nations. The combination of wealth with relatively smaller land areas
to cover may be the reason for such high usage of mobile devices. Unfortunately with the
excess of GDP that Indonesia’s has, this country which has more than thousand islands still
could not maximize and convert that advantage to be at least equal with Lao PDR or
Philippines in term of web access usage whether through mobile devices or computer. It is
a pity for Indonesia considering it has a higher GDP respect to Singapore and Brunei25,
especially its government which cannot maximize and convert that advantage to improve
its internet infrastructure and the quality of internet network connection.
25 http://data.worldbank.org/country/indonesia
29
Chart 3.4
Vary of Internet Connection in ASEAN Countries
Source: ASEAN E-Commerce Database Project (2010).
In order to get a profound explanation about internet/e-commerce usage in Indonesia,
ASEAN research team has made a survey and divided four categories which can be seen in
below figure. First, based on gender, it is found that 74% of male users exceeded the
females in using internet/e-commerce media. Regarding of marital status category, it seems
that those who are still single spend their time more often using internet respect to people
who are married with a ratio 76% - 24%. An obvious result is showed in the bar graph
where 76% of urban people can enjoy internet connection as well as e-commerce benefit,
considering they have developed infrastructures rather than in rural area, which explains
why there are only 24% people from rural area who can indulge internet. Lastly from
education category, by 51.1% users from college graduated contribution makes them the
most internet/e-commerce users in Indonesia, while the second largest users are the high
school students for 25%, followed by 11.1% from post graduate students which is
unexpected as well as a surprising fact where normally internet connection is a necessary
tool in order to sustain post graduate students research, in the meantime 7.8% portion came
from some college students whether they are still enrolled or dropped out from college or
university and the rest are came from technical school.
30
Chart 3.5
Internet/E-commerce Usages in Indonesia Based on Gender, Marital Status, Place of
Residence and Education
Gender Marital Status Place of Residence Education0
10
20
30
40
50
60
70
80
MaleFemaleSingleMarriedUrbanRuralHigh SchoolCollege GradVoc/Tech SchoolPost Grad.Some College
Source: ASEAN E-Commerce Database Project (2010).
In term of age, the number of internet/e-commerce users for those who are still under 18 is
only 5%, while teenagers around 18 – 23 years old contribute 32% of proportion, which
means they are the second largest in using internet/e-commerce. Students or professionals
who are approximately in 24 – 30 years old utilize internet more often rather than other
groups which makes this range of age is the largest users in Indonesia. Those who are in
the range of ages 31 – 36 occupy the third most internet/e-commerce users in this country
which has red and white colors as the base of its flag. In the meantime only 6% of internet
users around 37 – 42 years old, followed by only 2% of portion by the age 43 – 48 and the
number of users is getting declining as the age reaches 49 – 54. It is most likely the small
number from elder people caused by the resistance to use internet as they tend to be
reluctant to learn how to utilize internet. Another probability could also come from their
mindset which they think they would not need this technology to help and ease their way
of living in this millenium age.
31
Chart 3.6
Internet/E-commerce Usages in Indonesia Based on Age
Under 18
18 - 23
24 - 30
31 - 36
37 - 42
43 - 48
49 - 54
55 - 60
Over 60
0 5 10 15 20 25 30 35 40 45
Age
Age
Source: ASEAN E-Commerce Database Project (2010).
In base of income instead, labours who have an income of USD 199 & below surprisingly
are the most users who enjoy virtual world by 51%, followed by those who have stipends
around USD 200 – 399 for 24%, while only 11% of internet/e-commerce users are come
from people who have a salary in range USD 400 – 599. Those who have income USD 600
– 799 instead, only show their interest for 5%, moreover some people who take their home
pay in range USD$ 800 – 999 only have 3% of interest in using internet/e-commerce
media, while rich people who have an income around USD 1000 & above, somehow
showing more interest rather than two groups that has been mentioned before, by
contributing 6% portion of internet users in Indonesia.
32
Chart 3.7
Internet/E-commerce Usages in Indonesia Based on Income
USD$ 199 & below
USD$ 200 - 399
USD$ 400 - 599
USD$ 600 - 799
USD$ 800 - 999
USD$ 1,000 & above
0% 10% 20% 30% 40% 50% 60%
Income
Income
Source: ASEAN E-Commerce Database Project (2010).
Most respondents spend more than 3 hours connected on the Internet while the rest follow
closely behind with an average of around 1 until 3 hours. The top activities during these
hours generally performing a general information search, connecting with friends and
doing entertainment activities which can be viewed on the next graph.
Chart 3.8
Time spent Connected to The Internet
1-3 hours 3-6 hours 6-10 hours 10-14 hours 14 & up0%5%
10%15%20%25%30%35%40%
Time Spent
Time Spent
Source: ASEAN E-Commerce Database Project (2010)
33
The online activities in term of internet or e-commerce usage in Indonesian community can
be followed in below figure.
Chart 3.9
Internet/E-commerce Usages in Indonesia
Based on above survey, research activity and social network are the most popular internet
use in Indonesia. Many Indonesian entrepreneurs and businessmen are connecting online
through online advertising and social commerce in order to get profit from those activities.
In term of frequency activities, consumers in Indonesia use the Internet for email, news,
visiting social networking sites, viewing photos, playing games, visiting retail sites, read/
write blogs and doing research on daily basis activities. Visiting social networks like
Facebook, Twitter, Linkedin, Instagram and other similar websites is the most preferred
online activities amongst of all, while buying and trading online, job hunting, and banking
transaction rank as some of the least practiced activities on the Internet. This shows that the
Internet is primarily only for social motive rather than a tool to do business or transaction.
It is highly possible that E-Commerce will always comprise of a small share in the time
spent on the Internet.
34
Table 3.2
Preferred Online Activities Based on Percentage
Activities Daily
1/
week
2-3/
week 1/mo 2-3/mo Not at all
Check or send e-mail messages 61% 16% 14% 4% 3% 3%
Read online news or magazines 64% 13% 13% 3% 2% 5%
Play games 43% 12% 9% 5% 7% 25%
Visit social networking sites 90% 6% 3% 0% 0% 1%
View photos/videos 61% 15% 15% 5% 2% 2%
Look for job opportunities 19% 18% 12% 12% 6% 33%
Search or download files 44% 27% 18% 7% 3% 4%
Read/Write blogs 34% 21% 13% 11% 4% 18%
Visit retail sites looking for
merchandise/service 41% 35% 31% 26% 10% 59%
Buy/Trade online 6% 6% 7% 18% 10% 54%
Bank online/Pay bills 7% 6% 5% 12% 7% 63%
Source: ASEAN e-commerce database (2010).
In term of mobile usage, a unique result has been found in this survey where chatting is the
primary use of mobile phone service among Indonesian people, as it is the cheapest way to
communicate with others instead of making a phone call, considering there is not any
promotion such as free calls nor free SMS services in Indonesia. Indonesian people are
very fond of chatting with their friends or colleagues, besides it is more economic rather
than sending short message service or making a phone call, they found that having
conversation using chatting application is more fun, considering every chatting
applications normally provide emoticons to express users feeling where they cannot find
that kind of feature in short message service, although every providers in Indonesia provide
MMS service, but the cost to send pictures through MMS is pretty much expensive respect
to sending it from application which does not charge their phone credits. Other than that,
the users can use it anywhere as long as there is an internet connection without worrying to
receive roaming from another provider from other countries.
35
Chart 3.10
Mobile Usage in Indonesia
Regarding of e-commerce activity to be specific in online shopping sector, a survey which
conducted by Veritrans and Daily social found that fashion goods are the most popular
things bought, followed by online travel bookings which nowadays it is the most
convenient way to create an itinerary over the Internet, plus it saves more time. However,
some of the more popular categories found in developed market (e.g. online groceries) are
virtually nonexistent. Followed by music/video/games where in these days, people tend to
buy or download music over internet and save it into their devices whether computer or
cellphone. Come to think of it, purchasing song or album or video/ video games is
considered more efficient and more handy, not to mention the price would not be as
expensive as buying a CD, concerning the digital form from those media are not in solid
form, so cost of creating file and making CD’s as the media is much more expensive
instead of just creating the file and sell it through internet with a virtual form, in other
words intangible form. This kind of way is very popular nowadays. The purchase of
electronics and books place afterwards as Indonesian prefer to buy electronics by testing it
first before buying as in Indonesia the law of returning a defect object in term of
purchasing over internet is still weak and usually disadvantaging buyers side.
36
Chart 3.11
Preferred Online Shopping Activities Based on Percentage in Indonesia
Half of the online shoppers in Indonesia use Facebook or Kaskus to purchase goods. Based
on above figure, the two top sites to shop is a model of C2C e-commerce, while B2C or
B2B style is not as quite popular in Indonesia as C2C. E-commerce market in Indonesia is
dominated mostly by local players where the portion of foreign website is very small, it is
likely because the law of e-commerce activity in Indonesia is still weak, furthermore it is
believed that it still does not exist until now. Not to mention, from the point of view from
return of investment, foreign websites still have not found any prospect of gaining a big
profit in Indonesia, as this country is still considered has not ready for doing this activity
while in developed country, e-commerce is considered as a sophisticated breakthrough of
doing trading activity.
In addition to facilitating trust for consumers with lack of trust in making purchases online,
social networks are also can be a perfect media to place ads.
37
Chart 3.12
Online Shopping Favorite Sites in Indonesia
Speaking about payment method during trading transaction, Indonesians feel convenient by
doing payment with banking transfer using ATM (Automated Teller Machine) or going
directly to the bank and perform it conventionally by using a teller service which
performed by human resources. BCA (Central Asia Bank) as the biggest private bank in
Indonesia, is the most common bank which used by almost Indonesian people throughout
this country26. BCA provides online banking which called KlikBCA27, where users are
given a token to access their account as well as to do an online payment transaction.
Although it is quite popular among Indonesian people, however, the stability of internet
connection is the main obstacle why people prefer doing payment activity by ATM or
directly from bank teller. Transaction online with credit card payment is less popular than
KlikBCA, but it is oftentimes utilized rather than doing a traditional way like COD (Cash
on Delivery) where buyer and seller agree to meet in a certain place and they do trade
when buyer receives the item and immediately pay cash to the seller. Last but not least, is
the online payment service called Mandiri Internet28 which provided by Bank Mandiri, the
26 https://id.wikipedia.org/wiki/Bank_Central_Asia 27 http://www.klikbca.com/ 28 https://ib.bankmandiri.co.id/retail/Login.do?action=form
38
largest bank in Indonesia in term of assets, loans and deposits®29. Below can be viewed an
illustration of payment method in Indonesia.
Chart 3.13
Preferred Payment Method in Indonesia
In Italian case, as we can see in below statistic, the number of internet users in Italy from
2012 to 2018. In 2013, Italy had 34.5 million internet users. This figure is projected to
grow to 37.2 million internet users in 201630. The principal factor why numbers of internet
users are having slight increase year by year, because the non-users age which about two
thirds of Europeans who are majorly around 65-74 years old and about half of those aged
55-64 having never used the internet, even worse they showed disinterest and rejection as
they feel it is unnecessary and useless. The effort to utilize internet is very little as elder
people tend not to welcome new breakthrough and feel comfort with their current situation,
they also decline to learn something new. In stark contrast, for the population aged
between 16 and 44 years the internet has become a daily tool either for studies, work, 29 https://en.wikipedia.org/wiki/Bank_Mandiri 30 http://www.statista.com/statistics/262223/number-of-internet-users-in-italy/
39
leisure or social relations. Only 4% of people aged 16 to 24 and just 15% of people aged
between 25 and 54 declared that they have never used the internet31.
Chart 3.14
Number of Internet Users in Italy from 2012 to 2018 (in millions)
According to survey conducted by ISTAT (2014) in 2014, the percentage of households
owning an access to the Internet at home (from 60.7% to 64%) and broadband access (from
59.7% to 62.7%) increases as compared to 2013.
Households with children below 18 years old are the most ICTs-oriented: 87.1% of them
own a PC, and 89% have Internet access at home. On the other hand, households
composed only by individuals aged 65 and over maintain a low level of technological
goods: only 17.8% own a Pc and 16.3% have Internet access at home.
Strong differences still persist at the territorial level in Italy in 2014. For example, in the
Centre-north area 66% of households own a PC, 66.6% have Internet access at home and
65.4% have a broadband access while in the South and Islands area of the country, the
percentages are respectively 57.3%, 58.3% and 56.4%. The technological gap between the
Centre-north and South and Islands areas of Italy is confirmed by the percentage of
households owning a mobile phone enabled to Internet connection: 58.2% in the North-
east, approximately 48% in the South and Islands.
31 https://ec.europa.eu/digital-agenda/sites/digital-agenda/files/scoreboard_life_online.pdf
40
In 2014, over half of the population aged 3 and over use a PC (54.7%) and over half of the
population aged 6 and over surf the web (57.3%). There is a significant increase in the
daily use of internet (+3.3 percentage points). Gender and generation gaps are persisting.
The percentage of men using a PC is 59.3%, while women’s percentage is 50.2%. 62.3%
of men surf the Internet, whereas 52.7% of women does it. Young people from 15-24 years
old confirm themselves as the top users of personal computer and Internet: their
percentages respectively overtake 83% and 89%. In general, Italian people able to perform
basic computer operations: 82.7% of PC users are able to move a file or a folder. 95.6% of
Italian Internet users know how to use a search engine. Only the digital natives which are
young people aged 15-24 and grown up with the Internet and the social networks, have
computer skills significantly higher than the national average.
Internet evolution permitted a considerable growth of the means for human information
and communication. In 2014, ISTAT (2014) recorded that the percentage of people who
used the web to interact with others through social networks grew by 3.8 percentage points.
The percentage of people who made web calls increased by 2.8 percentage points, while
20.5% of Internet users aged 6 and over used the web to express their own opinion about
social and political issues and 10.4% to participate in consultations or voting.
The module on ICT usage in households and by individuals also measures the use of e-
government services by individuals and provides information on the perceived quality of
public authorities' websites and satisfaction with e-government services. They cover
contacts or interactions with websites concerning citizens’ obligations, rights, official
documents, public educational services and public health services. In 2014, there is a slight
increase of Internet users who obtained information from websites (from 28.5% to 51.7%).
66.3% is satisfied with the possibility to find information and more than 7 out of ten were
satisfied with the pertinence of the information available. The activities of using e-
government websites are: income tax declaration (26.3%), enrolment in higher education
or university (21.4 %) and searching public libraries (16.9%). Below is given the table of
individual who used computer and internet from 2006 to 2014 based on sex, age class,
geographical area, employment status and position.
Compared to 2013, the share of personal computer users remains stable at around 54%
(33.5% uses it daily) while that on the use of the Internet increases from 54.8% to 57.3%
(36.9% use it daily). The greatest growth in the use of the network is recorded among
people of 60-64 years old (41.6% versus 36.4% in 2013). It significantly increases the
share of people who use the Internet daily, from 33.5% to 36.9%. Daily use of the web is
41
more common among the age 15-24 years old (over 70%) but it must be stressed the strong
increase in the daily use of the Internet among 25-34 years old (+7 percentage points) and
among young people of 15- 17 years old (+9.2 percentage points).
Young people of 15-24 years old are the largest users of personal computers and the
Internet (respectively over 83% and over 89%). Even among people with age between 45
and 54 years old, the use of the personal computer and the Internet is much lower in this
range of age (respectively 64% and 65.6%) and the proportion of users drops below the
threshold of 50% after 59 years. The only exceptions are the girls 11-17 years old and 20-
24 year olds, which exceed 3 or 4 percentage points, respectively, for the use of computers
and the Internet than boys.
In 2014, there is a strong imbalance for the use of personal computers as well Internet
usage among people living in different regions, as well as in urban and metropolitan
contexts rather than extra-urban. There are strong differences even with respect to
employment status. Almost all of the students age 15 years old and above use the personal
computer and the Internet (89.8% and 93.2% respectively), but the share of users drops
below 80% for the employed (76% and 78, 9%); the less active technologically people,
however, which consist of housewives (22.9% and 24.2%) and retired from work (19.2%
for both technologies). Among the employed, the personal computer resulted more utilized
by management, the executives and employees (90.6%) compared to managers,
entrepreneurs and self-employed (88%); they are followed with a great distance of
employed workers and adjuvants (65.3%) and workers and apprentices (60.2%).
The same differences in levels of taking advantage with reference of the Internet usage,
which is used mainly by executives, entrepreneurs, professionals freelance, management,
managers and employees (over 88%). In term of network, instead, only 66.1% of workers
and apprentices utilize it. The share of employees who use personal computers remains
stable compared to 2013 , while there is an increase of those who surf the Internet (from
75.7% to 78.9%). Last year the reduction from social differences from workers showed
percentage increases relative of 4.7% for the use of personal computers and 12.2% for the
use of the Internet, while among managers, entrepreneurs, professionals are increases
percentages for around 1.5% for both technologies.
42
Chart 3.15
Table of Individuals who used Computer and Individuals who used the Internet by Sex, Age
Class, Geographical Area, Employment Status and Position, from years 2007 to 2015
If more than half from Italian households now has an access to the Internet and a
broadband connection, however, there are still ample margins from development of the
dissemination and use of the web. In this regard, most of the families who do not have
access to the Internet from home indicate the lack of skills as the main reason for not using
the network (55.1%). A significant percentage (24.3%) does not consider the Internet
useful and interesting then followed by economic reasons which related to the high cost of
the broadband connection or the necessary tools (15.8%). The 8.5% people surf the web
43
outside from home because they access the Internet from another place. Residual is instead
the proportion of households indicating among the reasons insecurity with respect to the
protection of their privacy (1.9%) and the lack of availability of a broadband connection
(1.4%) which can be seen in table 3.3.
The reasons for the unavailability are differ depending on the type of household. In
families of only elderly the higher percentage is reported by a reason of a lack of capability
to operate it (69.6%), followed by those who do not consider it useful and interesting
(26.2%). 55.7% of households who are still underage does not have an access to the
Internet from home because of the high cost of connection services or tools required for
connection, while 20.2% accessed it from another location which can be seen from below
table that report these data.
Table 3.3
Reasons and Percentage behind Households which do not have Internet Access (Comparison from
year 2012 & 2014)
FAMILY
TYPE
Internet access
from other
location
Internet is
not useful
and I do
not care
High cost of the
tools required to
connect with the
internet or High
Cost of connection
Lack of
capability
Broadband
connection
not
available
Reasons
of
privacy
and
security
Others
FAMILIES WITH UNDERAGE
2012 21.3 16.1 42.4 19.8 4.9 4.3 8.9
2014 20.2 11.0 55.7 22.9 2.9 3.6 3.7
FAMILIES WHO CONSIST OF ELDERLY OF 65 YEARS OLD AND MORE
2012 1.9 30.5 4.3 58.8 0.5 1.4 12.5
2014 1.4 26.2 4.4 69.6 0.6 1.2 9.5
OTHER FAMILIES
2012 23.2 25.1 20.8 32.7 2.3 3.2 8.1
2014 17.2 24.3 24.9 39.1 2.5 2.7 5.9
TOTAL
2012 13.0 26.5 15.8 43.3 1.8 2.5 10.3
2014 8.5 24.3 15.8 55.1 1.4 1.9 7.8
Considering the role of information and communication technologies, internet has made a
development for society and economy, it should be noted that the data reported by ISTAT
(2014) regarding the ability of computer usage is not very positive. While almost all people
age 3 years old and over who utilized the personal computer in the recent 12 months knows
how to perform basic operations such as copy or move files or folders (82.7%) or parts of
44
Source: ISTAT (2014)
the document (82.9%), on the other hand, the percentages are lower with regard to all other
knowledge about computer usage . Only 66.8% are able to transfer files from one computer
to another and / or from other devices (such as a digital camera, or a mobile phone, mp3 /
mp4 player). They are just over half from those who are able to connect and install devices
(57.3%) or use basic arithmetic formulas in a spreadsheet (52.2%). Finally, it stands at
49.2%, the percentage of those who can compress a file and the 37.4% from those who
know how to prepare presentations with specific software (can be seen in table 3.4 below).
Table 3.4
Percentage of people from 3 years old age and over who have used the personal
computer in the last 12 months categorized by the ability to operate, sex and age
group - Year 2014
AGE
CLASSES
Operations related to the use of personal computers
Copy or
move a
file or
folder
Use the
"copy and
paste" to
copy or
move
informatio
n within a
document
Using
basic
arithmet
ic
formula
s in a
spreads
heet
(Excel
etc.).
Compre
ssing
(or
zipping)
files
Connect
and install
peripheral
s
(printers,
modems,
etc.).
Write a
computer
program
using a
programm
ing
language
Transfer files
between
computers
and / or other
devices
(digital
camera, cell
phone, mp3 /
mp4 player)
Modify or
verify the
parameter
s to
configure
software
(except
browser to
access the
Internet)
Create
presentati
ons with
specific
software
(eg.
Slide),
including
graphics,
images,
sounds or
videos
Install a
new
operatin
g system
or
replace
an old
one
MALES
3-5 5.8 3.3 - - - - - - - -
6-10 36.5 35.8 5.6 3.2 7.4 1.9 14.1 0.9 4.4 1.6
11-14 81.3 83.3 35.4 32.4 44.0 10.7 60.8 16.7 32.7 18.2
15-17 94.4 94.7 65.0 59.2 73.3 22.3 84.3 31.6 56.6 32.3
18-19 96.7 97.4 73.7 73.1 78.9 28.8 89.8 37.9 63.7 44.1
20-24 94.2 94.4 68.8 73.6 79.8 25.3 87.3 42.8 58.3 43.6
25-34 90.6 91.2 65.1 69.1 77.2 20.4 83.0 42.3 51.5 44.4
35-44 88.3 88.4 62.8 64.1 74.9 20.0 79.4 39.7 43.5 40.6
45-54 86.5 85.9 56.1 56.8 67.7 12.6 73.3 32.3 36.0 32.0
55-59 82.6 82.3 55.7 51.3 59.9 11.3 63.4 23.9 31.6 24.3
60-64 83.5 82.8 51.6 47.7 61.7 10.9 62.3 22.3 29.1 27.0
65-74 75.0 72.0 39.5 32.7 54.1 8.0 55.2 16.9 20.7 16.5
75 above 70.5 71.8 39.1 30.4 41.8 2.7 40.7 4.3 15.2 9.5
Total 83.9 83.8 55.3 55.1 65.4 16.0 71.2 31.4 39.6 32.5
45
FEMALES
3-5 9.1 5.5 - - - - - - - -
6-10 34.4 39.2 6.1 2.8 6.5 1.9 14.8 1.6 6.3 1.9
11-14 85.2 87.9 35.9 24.2 35.3 8.0 62.0 12.3 39.7 11.8
15-17 96.6 95.4 62.0 49.7 62.1 14.2 83.3 23.9 56.5 18.2
18-19 97.5 97.7 63.8 54.0 67.6 19.1 83.6 21.0 61.4 23.4
20-24 96.7 96.4 67.3 62.2 70.4 16.4 87.9 26.9 59.5 25.3
25-34 91.6 91.4 63.9 58.5 66.1 13.2 79.3 25.9 50.3 24.1
35-44 82.4 84.3 52.9 46.7 50.2 8.9 66.4 17.8 32.5 17.5
45-54 78.4 79.4 43.8 38.9 42.9 7.0 51.4 12.0 23.7 11.4
55-59 75.5 77.4 41.9 36.5 34.3 5.2 47.1 12.0 24.0 11.9
60-64 74.1 73.6 35.3 26.8 30.1 7.1 39.8 5.6 16.3 6.5
65-74 69.9 63.6 27.3 21.0 31.1 3.9 33.6 5.2 10.9 8.0
75 above 61.1 51.2 25.6 20.9 28.9 3.0 15.7 3.0 5.3 6.5
Total 81.3 82.0 48.8 42.5 48.3 9.5 61.8 16.6 34.9 15.9
MALES AND FEMALES
3-5 7.2 4.3 - - - - - - - -
6-10 35.5 37.5 5.9 3.0 7.0 1.9 14.4 1.2 5.3 1.7
11-14 83.2 85.6 35.6 28.4 39.7 9.4 61.4 14.5 36.1 15.0
15-17 95.5 95.0 63.5 54.5 67.8 18.3 83.8 27.8 56.5 25.4
18-19 97.1 97.5 69.0 63.9 73.5 24.1 86.8 29.8 62.6 34.1
20-24 95.5 95.4 68.1 67.9 75.1 20.9 87.6 34.9 58.9 34.5
25-34 91.1 91.3 64.5 63.9 71.7 16.8 81.2 34.2 50.9 34.3
35-44 85.4 86.4 58.0 55.6 62.9 14.6 73.1 29.1 38.2 29.4
45-54 82.6 82.7 50.2 48.1 55.7 9.8 62.7 22.4 30.0 22.0
55-59 79.6 80.2 49.8 44.9 48.9 8.6 56.4 18.8 28.3 19.0
60-64 79.7 79.1 45.0 39.2 48.8 9.4 53.1 15.5 23.9 18.7
65-74 73.1 69.0 35.1 28.5 45.8 6.6 47.4 12.7 17.2 13.4
75 above 68.1 66.6 35.7 28.0 38.5 2.8 34.3 3.9 12.7 8.7
Total 82.7 82.9 52.2 49.2 57.3 12.9 66.8 24.4 37.4 24.7
Source: ISTAT (2014)
Based on table 3.4 above, for more specific knowledge it shows that: only a quarter of the
users are able to install a new operating system or replace an old (24.7%) or, again, are
able to change or verify the parameters to configure software (24.4%). Activities such as
writing a computer program using a programming language, only 12.9% of users of
personal computers have this ability. The proportion of men claiming to possess such skills
is always higher than that of women.
Also in the case of Internet usage, the vast majority of Internet users who are from 6 years
old and above know how to operate all those activities with a sufficient basic knowledge.
Almost all know how to use a search engine (95.6%) and 81.8% know how to send e-mails
with attachments. Six out of ten Internet users know how to post messages in the chat,
46
newsgroups or online discussion forum (60.5%) and slightly more than half portion can
download texts, games, pictures, movies, videos and music, etc.(54.9%). For other skills
with shares below 50%, such as phone calls over the Internet (48.4%), upload text, games,
images, films or music on websites (45%), set up the security settings of browser to access
Internet (28.3%), use peer to peer for exchanging movies, music (17.8%) or create a web
page (14.3%). Also in possession of e-skills, women occupy positions behind the lines. If
the differences are minimum in term of primary Internet usage, for instance the use of
electronic mail, search engine, or the chat-line, the gap with men become larger as the
operation to perform become more complex, for example, 34.1% of men know to modify
the settings security browsers to access the Internet compared with 21.8% of women.
Juvenile between 15 and 24 years old who grow up with Internet and social networks, have
the highest percentages for all the operations which perform through Internet, for example
over 85% know how to post messages in chat rooms, newsgroups or discussion forums
online and over 70% know how to upload or download text, games, images, films, music
sites (can be seen Table 3.5).
Table 3.5
People from 6 years old age and above who have used the Internet in the last 12
months by type which know how to operate, sex and age group - Year 2014 (in
thousands)
AGE
CLASS
ES
Those
who
used the
Internet
in the
last 12
months
Operations related to the use of personal computers
Utilize
the
search
engine to
find
informat
ion
Send
with
attachm
ents
(eg.
Docum
ents,
photos,
etc.)
Post
message
s in chat,
newsgro
ups or
online
discussio
n forum
(eg. On
social
networki
ng sites)
Intern
et
calls
Use peer
to peer
for
exchangi
ng
movies,
music,
etc.
Create
a
webpa
ge
Upload
text, games,
images,
films or
music to
websites
(eg. On
social
networking
sites)
Set-up
security
settings
Download
text, games,
images,
films, videos
or music,
etc.
MALES
6-10 684 520 111 113 117 22 17 149 10 276
11-14 914 868 559 584 363 138 94 477 143 610
15-17 834 804 714 705 513 253 191 609 309 626
18-19 536 512 490 466 366 204 166 388 278 410
20-24 1,359 1,305 1,233 1,180 932 516 383 977 653 1,016
47
25-34 2,815 2,714 2,528 2,225 1,766 963 647 1,747 1,287 1,969
35-44 3,854 3,723 3,404 2,530 2,145 999 737 1,977 1,605 2,370
45-54 3,093 2,984 2,625 1,642 1,383 554 418 1,112 993 1,571
55-59 1,221 1,190 1,010 515 425 155 97 319 262 505
60-64 913 873 745 333 311 95 85 201 205 328
65-74 877 830 673 220 251 36 44 139 150 258
75 above 202 182 150 40 47 4 7 16 12 33
Total 17,303 16,505 14,243 10,555 8,618 3,941 2,884 8,109 5,906 9,971
FEMALES
6-10 613 477 105 113 91 16 3 120 4 260
11-14 922 887 622 596 415 108 130 461 132 628
15-17 822 807 732 706 474 159 184 580 229 617
18-19 500 490 461 437 327 103 113 358 170 385
20-24 1,344 1,322 1,262 1,159 863 324 251 939 470 990
25-34 2,712 2,635 2,466 2,111 1,683 509 380 1,613 927 1,752
35-44 3,620 3,490 3,072 2,180 1,705 393 354 1,446 803 1,810
45-54 2,926 2,826 2,318 1,390 1,059 195 242 791 430 1,080
55-59 928 885 722 347 319 55 94 209 143 298
60-64 624 587 487 173 193 22 35 98 55 165
65-74 502 462 374 118 139 19 22 61 31 95
75 above 70 65 42 13 12 4 5 6 4 11
Total 15,582 14,934 12,664 9,344 7,281 1,906 1,811 6,682 3,397 8,089
MALES AND FEMALES
6-10 1,296 997 216 227 208 37 20 268 14 536
11-14 1,836 1,755 1,181 1,180 778 247 224 938 275 1,238
15-17 1,657 1,611 1,446 1,411 987 412 375 1,188 538 1,243
18-19 1,036 1,002 951 904 693 307 278 746 448 795
20-24 2,702 2,627 2,496 2,339 1,795 840 634 1,916 1,123 2,006
25-34 5,527 5,349 4,994 4,337 3,449 1,472 1,026 3,360 2,214 3,721
35-44 7,474 7,213 6,476 4,709 3,850 1,392 1,091 3,423 2,408 4,180
45-54 6,019 5,810 4,943 3,032 2,442 749 659 1,903 1,422 2,650
55-59 2,150 2,076 1,733 863 745 210 190 528 405 803
60-64 1,537 1,460 1,232 507 504 117 120 298 259 493
65-74 1,378 1,293 1,047 337 390 55 66 200 181 353
75 above 272 247 192 53 59 8 12 22 16 43
Total 32,884 31,439 26,907 19,899 15,900 5,846 4,695 14,791 9,302 18,061
Source: ISTAT (2014)
Among those who said they were able to make at least one of the above-listed with the
Internet, more than 80% believe they have sufficient skills in the use of the means of
communicating with relatives, friends, colleagues, but only half population know how to
protect personal data and even fewer are those who consider themselves capable of
protecting the PC from viruses or cyber-attacks (44.6%). As it is already expect the group
of 18-24 year olds have greater confidence in their skills regarding their competence in
48
informatics (as it shown in table 3.6). Again, the total numbers from male respondents who
have sufficient skill in using internet have overpassed the numbers of female who can
operate internet for communication need, protecting data or their own computer from virus
or malware from virtual world.
Table 3.6
Percentage of people with aged 6 and over who have used the Internet in the last 12 months of
judgement given regarding their skills in using the Internet in relation to certain operations, sex
and age groups - Year 2014
AGE CLASSES
Those who used the
Internet in the last 12
months and have
shown that they
know to do at least
one transaction with
the Internet
Skills considered sufficient in the use of the Internet:
Communicate with
relatives, friends,
colleagues over the web
Protect their own personal
data
Protect their own computer
from viruses and other cyber
attacks
MALES
6-10 82.4 40.6 10.9 7.9
11-14 95.8 77.5 35.0 35.0
15-17 97.6 93.3 63.7 54.8
18-19 96.9 93.4 65.7 58.4
20-24 97.5 94.8 66.8 65.5
25-34 97.6 92.2 65.0 61.6
35-44 98.1 86.2 57.6 55.3
45-54 97.4 79.2 50.7 48.3
55-59 98.3 76.2 45.1 42.0
60-64 96.6 72.5 45.7 43.4
65-74 96.2 67.4 41.6 42.1
75 and above 93.8 66.1 34.0 35.6
Total 96.8 82.6 53.5 50.8
FEMALES
6-10 83.8 41.7 8.6 6.3
11-14 97.5 79.4 36.7 28.1
15-17 98.9 93.0 62.5 46.3
18-19 98.3 96.4 63.7 47.6
20-24 99.0 93.3 62.9 52.7
25-34 98.1 90.7 58.4 49.9
35-44 97.8 83.8 46.7 37.3
45-54 97.7 75.6 38.7 32.1
55-59 96.9 72.7 37.6 28.6
60-64 97.2 69.7 32.0 26.4
49
65-74 94.1 62.3 27.7 27.2
75 and above 93.0 48.5 25.1 15.2
Total 97.2 81.4 46.4 37.7
MALES AND FEMALES
6-10 83.0 41.1 9.8 7.1
11-14 96.7 78.5 35.9 31.5
15-17 98.2 93.2 63.1 50.5
18-19 97.6 94.9 64.7 53.1
20-24 98.2 94.1 64.8 59.1
25-34 97.8 91.5 61.7 55.8
35-44 98.0 85.0 52.3 46.6
45-54 97.5 77.5 44.9 40.4
55-59 97.7 74.7 41.9 36.3
60-64 96.8 71.4 40.1 36.4
65-74 95.4 65.6 36.6 36.7
75 and above 93.6 61.6 31.8 30.4
Total 97.0 82.0 50.1 44.6
ISTAT (2014) also noted there are 21 million 994 thousand people in 2014 aged 6 and
above who still have not utilized internet (38.3% of the population resident in Italy). The
largest shares of non-users are concentrated in the elder group and those who already exit
from the labor market: the percentage of non-users between 65-74 years old is 74.8% and
rising to 93.4% among those over 75 years old. High percentage also come from inactive
users who are very young group of age (1 million 518 thousand between 6-10 years old)
which, although described as "digital natives", turned out, for more than 50% they still do
not use the network.
However, an absurd fact come from the age factor, which strongly influences the use of the
web, the presence in the family of parents who use the Internet encourages such behavior
in their children. Sufficient to note that in families where both parents who are used the
Internet, the percentage of children aged 11 to 14 who do not use the web decline to 6.7%,
while in the case where both parents do not use Internet properly, the percentage comes the
other way around which is rise to 40.1%. Data can be seen in chart 3.16.
50
Source: ISTAT (2014)
Chart 3.16
Percentage of children with aged 6-17 years old who used internet by age classes and behavior of their
parents - Year 2014 (surveyed 100 children aged 6-17 years old with the same characteristics)
Considering the percentage of individuals from aged 16 to 74 years old who have
connected regularly (for regular use of the Internet by using the web at least once a week
(including all days)) to Internet shows that compared with a European average of 72% and
countries such as the Netherlands, Luxembourg, Sweden and Denmark that have reached
levels close to saturation, Italy ranks only third to last place in the international, with a
value equal to 56 % (equivalent to that recorded for Greece). This pattern was seen among
young people of 16-24 years, who are supposed to represent the largest segment of
"included" in the digital world. Young people are considered to be the segment of the
population for which the use of ICT plays a central role in building a professional, cultural
and social life. If in the northern European countries, almost all of the young people of 16-
24 years surf the net regularly, in Italy the percentage is 84%, placing it among the last
places in the European ranking (ISTAT, 2014).
51
Chart 3.17
Percentage from European People from 16 – 74 years old who used Internet Regularly for the last
3 months – Year 2013
Internet is characterized as an important tool for social interaction: Eight out of ten Internet
users have used it in the last three months for sending or receiving e-mail, the 62.7% utilize
it to send chat messages, blogs, online discussion forums and for instant messaging, more
than half (57%) to send messages via Facebook and Twitter. Smaller share is from those
who have made phone calls via Internet (37.3%). It should be emphasized that these
activities are already widespread among minor age between 11 and 17 years old, compared
to these operations, they can demonstrate a precocious confidence with telematic
technologies which can be viewed in below table.Table 3.7
Numbers of people from 6 years old age and above who used the Internet in the last 3 months by type
of communication activities took place, sex and age group - Year 2014 (in thousands)AGE Those who
used
Communication activities
52
CLASSES
internet for
the last 3
months
To send or
receive an
Phone
calls over
the
Internet /
video calls
via
webcam
(eg. Using
application
s such as
Skype)
Send
messages
in chat
rooms,
blogs,
newsgroup
s or online
discussion
forum
Use
instant
messagin
g
services
Participate
in social
networks
(eg. Create a
user profile,
posting
messages or
other on
Facebook,
Twitter, etc.)
Express
opinions
on political
or social
issues
through
websites
(eg. Blogs,
social
networks
etc.).
Online
participation
in
consultation
s or voting
on social
issues (civic)
or political
(eg. Urban
planning,
signing a
petition)
Upload
created
content
(text,
photographs,
music,
videos,
software,
etc.) on Web
sites to share
Create
website
s or
blogs
MALES
6-10 642 65 90 98 112 103 9 .. 51 10
11-14 871 416 281 472 481 530 103 21 256 32
15-17 821 580 386 621 612 707 210 56 339 71
18-19 519 438 252 417 385 455 158 73 251 53
20-24 1,336 1,156 639 1,031 994 1,127 440 189 636 125
25-34 2,756 2,447 1,323 1,842 1,855 2,053 871 398 1,255 240
35-44 3,749 3,275 1,480 1,974 2,046 2,273 913 431 1,282 271
45-54 2,983 2,569 992 1,243 1,316 1,324 595 356 801 125
55-59 1,170 992 368 359 432 391 200 117 247 40
60-64 892 753 249 262 266 264 144 122 203 44
65-74 836 666 231 188 196 201 125 83 156 17
75 and above 196 156 45 31 25 29 21 12 31 4
Total 16,774 13,513 6,336 8,537 8,720 9,458 3,788 1,857 5,508 1,033
FEMALES
6-10 584 83 89 102 124 95 3 2 48 1
11-14 894 464 342 536 543 542 76 22 307 29
15-17 794 559 355 594 573 685 181 45 396 44
18-19 492 431 245 389 382 438 104 46 286 45
20-24 1,299 1,161 618 985 978 1,129 351 150 689 88
25-34 2,643 2,337 1,207 1,731 1,804 2,041 663 324 1,199 149
35-44 3,510 2,966 1,238 1,667 1,848 1,964 636 339 1,178 116
45-54 2,825 2,309 853 1,086 1,117 1,214 452 305 635 80
55-59 898 739 270 298 318 306 145 97 193 34
60-64 590 451 175 125 167 159 59 79 88 13
65-74 476 375 124 96 89 109 59 46 84 17
75 and above 63 43 16 12 14 12 7 5 8 -
Total 15,067 11,921 5,531 7,620 7,955 8,695 2,737 1,461 5,111 617
MALES AND FEMALES
6-10 1,226 148 178 200 236 198 12 2 99 11
11-14 1,765 880 623 1,008 1,024 1,072 179 43 562 61
15-17 1,615 1,139 741 1,215 1,185 1,392 391 100 735 115
18-19 1,012 869 496 805 767 893 262 119 537 99
20-24 2,635 2,317 1,257 2,016 1,972 2,256 792 339 1,325 213
25-34 5,399 4,784 2,530 3,573 3,659 4,094 1,534 723 2,454 389
35-44 7,260 6,241 2,717 3,642 3,894 4,238 1,549 770 2,459 388
45-54 5,808 4,879 1,845 2,329 2,433 2,538 1,047 660 1,436 206
55-59 2,068 1,731 638 658 750 697 345 214 440 74
60-64 1,483 1,204 424 387 433 423 203 201 291 58
53
65-74 1,312 1,041 355 284 285 310 183 129 240 34
75 and above 259 200 61 43 39 41 29 18 39 4
Total 31,841 25,434 11,867 16,157 16,676 18,152 6,525 3,318 10,618 1,650
Source: ISTAT (2014)
Regarding of territorial, in the South and Islands of Italian territory, it shows that there is a
greater practical use of a new form in communication through the Internet. In particular, in
the South 63.1% of Internet users have created a user profile, or other messages sent on
Facebook or Twitter (compared to 51.1% of users in the North-west) and 24.5% has
exchanged opinions on web social or political problems (compared to 16.9% in the North-
west). In the center-north is more widespread use of the network to send or receive e-mail
(more than 80% against 76.1% in the South) which described in table below.
However, in average, Italian people who live in North-west tend to be active in using
internet whether for sending or receiving emails, making phone calls over internet
connection or making video calls using web camera, having conversation on chatting
application, writing some blogs or forum discussion, being registered in social media,
online consultation or online voting, or uploading contents such as video or pictures.
People in North-west Italy only outnumbered in a slight number with people in South area
regarding of expressing opinion either politic or social issue through websites. It is quite
surprising, considering the number of internet users in South not as many as those users in
North-west.
Table 3.8
Number of people age from 6 years old age and above who used the Internet in the
last three months by type of communication activities took place, region, geographical
area and type of municipality - Year 2014 (in thousands)
54
REGIONS,
GEOGRAPHICAL
DISTRIBUTION AND
TYPES OF COMMON
Those
who
used
internet
for the
last 3
months
Type of communication activities
Send or
receive
an e-
Phone
calls over
the
Internet /
video calls
via
webcam
(eg. Using
application
s such as
Skype)
Send
messages
on chat,
blogs,
newsgro
ups and
online
discussio
n forums
Use
instant
messag
ing
service
s
Participate in
social
networks (eg.
Create a user
profile,
posting
messages or
other on
Facebook,
Twitter, etc.)
Express
opinions on
political or
social issues
through
websites (eg.
Blogs, social
networks
etc.).
Online
participation
in
consultation
s or voting
on social
issues (civic)
or political
(eg. Urban
planning,
signing a
petition)
Upload
created
content
(text,
photograp
hs, music,
videos,
software,
etc.) On
Web sites
to share
Create
website
s or
blogs
Piemonte 2,381 1,926 807 1,125 1,190 1,258 425 236 763 121
Valle
d'Aosta/Vallée
d'Aoste 72 60 21 31 31 32 12 5 20 2
Liguria 888 738 310 409 428 437 171 81 217 42
Lombardia 5,796 4,674 2,038 2,744 2,929 2,944 932 486 1,888 320
Trentino-Alto
Adige 624 501 223 272 243 313 124 68 199 44
Bolzano/Bozen 313 253 111 138 108 162 70 38 100 21
Trento 310 248 112 134 134 151 54 31 99 23
Veneto 2,714 2,130 952 1,252 1,296 1,451 546 368 867 152
Friuli-Venezia
Giulia 709 585 258 316 336 347 140 67 209 36
Emilia-Romagna 2,520 2,078 884 1,168 1,304 1,364 421 259 856 107
Toscana 2,077 1,762 788 1,091 1,141 1,200 488 247 742 93
Umbria 458 383 167 262 262 295 113 60 170 26
Marche 829 646 330 418 415 487 164 83 290 44
Lazio 3,271 2,742 1,473 1,847 1,956 2,016 724 382 1,112 177
Abruzzo 647 501 234 342 354 394 146 67 218 38
Molise 155 119 66 77 75 86 33 15 62 6
Campania 2,595 1,972 1,096 1,517 1,432 1,712 675 238 852 161
Puglia 1,766 1,339 672 958 1,003 1,083 400 197 635 85
Basilicata 252 189 103 144 137 155 70 25 91 10
Calabria 873 665 302 454 450 537 218 90 332 42
Sicilia 2,280 1,720 805 1,228 1,176 1,472 487 200 762 90
Sardegna 935 703 336 501 518 569 236 143 335 54
Nord-ovest 9,137 7,398 3,176 4,309 4,578 4,671 1,541 808 2,887 485
Nord-est 6,566 5,293 2,318 3,008 3,178 3,476 1,230 763 2,131 339
Centro 6,634 5,534 2,759 3,618 3,774 3,998 1,490 772 2,313 339
Sud 6,288 4,785 2,474 3,493 3,452 3,966 1,542 632 2,190 343
Isole 3,215 2,423 1,141 1,729 1,694 2,041 723 344 1,097 144
55
The center
"Comune" from
the metropolitan
area 5,069 4,351 2,225 2,790 2,861 3,020 1,128 650 1,617 287
Outskirts of the
metropolitan area 4,131 3,282 1,530 2,127 2,215 2,351 837 421 1,393 210
Up to 2,000
people 1,563 1,223 545 747 751 850 333 146 511 91
From 2,001 to
10,000
inhabitants 7,291 5,637 2,585 3,518 3,604 4,017 1,335 634 2,379 348
From 10,001 to
50,000
inhabitants 8,271 6,452 3,041 4,150 4,289 4,773 1,758 898 2,828 437
50,001
inhabitants and
more 5,515 4,488 1,941 2,825 2,955 3,140 1,134 569 1,890 278
Italy 31,841 25,434 11,867 16,157 16,676 18,152 6,525 3,318 10,618 1,650
Source: ISTAT (2014)
In the use of various communication platforms available in the network, compared to 2013
there was a slight decrease in the use of e-mail (81.7% of 2013 to 79.9% in 2014) in favor
of other forms of interaction, such as the use of social networks (from 53.2% in 2013 to
57% in 2014) and the use of the messaging chats, blogs, newsgroups or online discussion
forum (from 49% in 2013 to 50.7% in 2014). There is growing use of the web to make a
phone or video call (from 34.5% in 2013 to 37.3% in 2014).
Social networks are not only used as a tool to maintain relationships in their network of
friends, but also as an instrument to participate in society or politics of the country: about
one-fifth of users expressed networked opinions on social issues or political (20, 5%) and
10.4% took part in consultations or vote on these issues. 12% participate in professional
networks such as Linkedin.
The web is increasingly becoming a shared application platform, where information can be
not only distributed but also created and developed collectively. Compared to 2013 there is
a growing use of wiki to get information of any subject (from 58.7% to 60.8%), a decrease
found for the consultation of websites or web pages for information on goods and services
(from 58% to 51.7%) and the use of health information research (from 49.6% to 42%).
56
Considering the age of the users, the use of wiki is prevalent in younger age groups of 15-
24 years old, although there is a significant increase recorded in the adult group 35-44
years old (+2.9 percentage points).
Table 3.9
Number of people from 6 years old age and above who used the Internet in the last 3
months for other activities classified by sex and age group - Year 2014
AGE
CLASSES
Services use Training / information and work Searching for information Other activities
Using services related to
travel or stays
Internet banking use
Make an appointm
ent w
ith a doctor (eg. On
the site of a hospital or a
Do an online course of
any type
Utilize w
iki services for acquiring inform
ation on any topic (eg.
Wikipedia, other online
Looking for a job or posting a job offer /
applying a job
Joining a professional netw
ork (create a profile, post m
essages or other contributions on
Searching for inform
ation about goods or services
Looking for information
in any kind of activities in term
of education or training
Looking for health inform
ation (eg. A
ccident, disease, nutrition, im
proving
Selling goods or services (eg, online
auctions, e-bay)
Dow
nload software
(other than games)
MALES
6-10 0.7 - - 0.3 33.7 - - 6.3 11.6 0.9 - 4.5
11-14 5.0 - 1.0 2.9 59.3 - - 17.0 18.9 5.5 3.4 23.9
15-17 11.8 4.3 2.5 5.3 70.5 4.8 8.2 35.9 30.5 16.2 11.7 38.9
18-19 37.2 19.5 2.4 7.3 75.8 20.2 12.0 50.5 46.5 27.4 17.7 40.9
20-24 39.2 29.9 5.2 8.5 67.5 40.6 16.0 55.8 46.3 31.6 20.5 43.1
25-34 48.3 48.4 7.8 8.8 63.5 34.2 19.4 58.8 37.8 40.3 24.4 39.4
35-44 47.2 54.1 11.3 9.2 61.8 22.0 18.9 63.2 33.5 43.7 21.7 33.5
45-54 40.6 52.1 10.3 8.2 60.0 12.6 13.7 63.7 33.7 44.3 17.5 29.5
55-59 35.5 51.3 8.6 7.3 52.2 10.4 8.9 56.6 27.9 44.9 11.5 21.4
60-64 39.5 49.5 11.7 4.9 52.6 6.3 10.3 57.7 23.8 51.0 12.5 22.1
65-74 42.0 47.9 11.0 3.6 49.6 1.7 7.6 54.0 19.0 46.7 8.1 19.7
75 and above 32.4 32.7 10.6 2.8 36.7 - 2.8 35.0 16.3 42.9 3.5 11.2
Total 37.9 41.5 8.2 7.3 59.8 18.0 13.5 54.1 32.1 37.4 16.8 31.0
FEMALES
6-10 1.3 - - 0.9 33.5 - - 2.8 8.4 1.3 - 4.1
11-14 6.7 - 0.6 2.5 68.4 - - 14.9 19.2 7.8 3.3 19.0
15-17 19.6 4.6 2.6 5.1 74.8 4.5 6.6 32.3 35.6 23.5 5.4 26.9
18-19 30.2 12.6 2.9 6.0 74.7 23.5 7.5 47.4 50.2 39.8 9.7 29.9
20-24 45.6 26.5 5.0 6.8 72.6 39.6 13.0 51.3 50.8 43.1 14.0 32.8
25-34 50.2 44.5 13.0 8.7 66.5 38.2 18.5 57.5 43.1 54.1 14.5 25.2
35-44 44.1 42.4 14.1 6.7 62.2 21.9 12.2 56.7 37.6 55.4 13.1 17.0
45-54 41.9 40.6 13.8 7.5 57.0 13.6 8.8 54.9 36.9 56.3 8.6 12.4
55-59 40.3 37.4 12.5 8.8 53.1 8.8 8.4 51.5 32.7 54.2 5.3 13.0
60-64 41.2 32.2 10.7 6.4 50.0 3.5 5.3 52.6 28.5 58.1 3.3 9.2
65-74 39.3 30.8 10.4 3.5 52.2 0.6 4.0 46.0 21.2 50.5 5.2 7.1
75 and above 38.4 32.7 10.8 - 46.8 - 3.5 35.2 21.4 56.1 6.6 2.7
57
Total 38.8 32.8 10.4 6.6 61.8 19.5 10.3 49.0 36.4 47.1 9.8 18.6
MALES AND FEMALES
6-10 0.9 - - 0.6 33.6 - - 4.6 10.1 1.1 - 4.3
11-14 5.9 - 0.8 2.7 63.9 - - 15.9 19.0 6.7 3.3 21.4
15-17 15.6 4.5 2.6 5.2 72.6 4.6 7.4 34.2 33.0 19.8 8.6 33.0
18-19 33.8 16.2 2.6 6.7 75.3 21.8 9.8 49.0 48.3 33.4 13.8 35.6
20-24 42.4 28.2 5.1 7.7 70.0 40.1 14.5 53.6 48.5 37.3 17.3 38.0
25-34 49.3 46.5 10.4 8.8 65.0 36.2 18.9 58.2 40.4 47.0 19.6 32.4
35-44 45.7 48.4 12.6 8.0 62.0 22.0 15.7 60.1 35.5 49.3 17.5 25.5
45-54 41.3 46.5 12.0 7.8 58.5 13.1 11.3 59.4 35.3 50.2 13.2 21.2
55-59 37.6 45.3 10.3 8.0 52.6 9.7 8.6 54.4 30.0 48.9 8.8 17.8
60-64 40.2 42.6 11.3 5.5 51.6 5.2 8.3 55.7 25.6 53.8 8.8 17.0
65-74 41.0 41.7 10.8 3.6 50.6 1.3 6.3 51.1 19.8 48.1 7.1 15.2
75 and above 33.9 32.7 10.7 2.1 39.2 - 3.0 35.0 17.5 46.1 4.2 9.1
Total 38.3 37.4 9.2 7.0 60.8 18.7 12.0 51.7 34.1 42.0 13.5 25.1
Source: ISTAT (2014)
The availability of communications technology tends to increase the possibility of access
according to culture and habit change of usage. In 2014 more than half of internet users
have used the web to read newspapers, information, online magazines (55.8%) and 15.6%
read online or downloaded books or e-books. Men show a greater propensity than women,
to benefit the network to read newspapers, magazines or information (58% compared to
53.4% of women). Not just that, in total, the male users again surpassed the number of
female users in using internet for the last 3 months.
However, it is noted that, in classes 11-17 and 20-24 years old, women utilize more the
web pages to read news and information, while between 25-34 years gender differences are
almost non-exist. The major consumers of books online can be identified among the young
surfer from 15-24 years old: more than 21% of these use it to download online books or e-
books.
It is also noted that the use of network for the dissemination of audio and video content,
42.9% of users have benefited for downloading pictures, movies, music, 38.1% for
watching movies or video streaming , 24.6% of television programs and 26.4% of those
who are listening to online radio. The most active group in this area are young people aged
15-24 years old; in particular the 61% of them watched movies or streaming video (against
38.1% of the national average); more than a third (38%) used it for viewing television
programs (compared to 24.6% of the national average) and for listening to the radio (over
36% compared to 26.4% of the national average) which display in table 3.10.
58
Table 3.10
Number of people from 6 years old age and above who used internet in the last three months for
cultural products and entertainment activities matters which performed by sex and age group -
Year 2014 (in thousands)
AGE CLASSES
Those who
used internet
for the last 3
months
Benefitting of cultural products and entertainment
Read
newspapers,
information,
magazines
online
Read or
download
online
books or e-
books
Listen to
the radio
via web
Watching TV
shows via
web
Watch
streaming
movies
Watch
streaming
video
Download
pictures,
movies,
music
Play or
download
games
Play
games
online
with other
users
MALES
6-10 642 50 37 90 123 113 183 185 517 90
11-14 871 180 93 253 281 302 423 523 684 363
15-17 821 330 131 309 347 400 510 594 575 364
18-19 519 283 101 181 233 290 334 385 342 211
20-24 1,336 758 274 490 482 700 793 920 742 474
25-34 2,756 1,736 483 964 855 1,055 1,358 1,519 1,104 615
35-44 3,749 2,393 596 1,115 918 857 1,373 1,648 1,168 541
45-54 2,983 1,943 442 708 608 514 864 1,040 664 293
55-59 1,170 786 161 201 189 119 205 280 189 71
60-64 892 601 123 127 132 97 153 197 142 53
65-74 836 538 85 76 120 67 119 143 128 29
75 and above 196 133 23 15 14 8 17 27 30 7
Total 16,774 9,731 2,548 4,528 4,300 4,521 6,332 7,462 6,286 3,113
FEMALES
6-10 584 29 29 123 141 99 168 191 462 67
11-14 894 246 121 338 336 316 395 588 570 202
15-17 794 338 170 311 325 430 447 583 423 177
18-19 492 263 121 189 199 240 266 357 231 107
20-24 1,299 759 288 463 528 630 690 886 511 235
25-34 2,643 1,640 525 876 697 712 974 1,340 859 386
35-44 3,510 1,945 478 913 601 534 830 1,207 965 408
45-54 2,825 1,593 405 472 419 314 489 668 644 251
55-59 898 543 149 109 128 100 133 193 187 91
60-64 590 375 79 56 86 40 59 97 86 32
75 and above 63 40 9 6 10 7 5 8 7 1
Total 15,067 8,052 2,416 3,888 3,527 3,449 4,501 6,194 5,029 1,979
MALES AND FEMALES
6-10 1,226 78 66 213 263 212 351 376 979 157
11-14 1,765 426 214 592 616 618 817 1,111 1,254 565
15-17 1,615 668 301 620 673 830 958 1,177 998 541
18-19 1,012 545 222 369 432 530 600 742 572 318
20-24 2,635 1,517 562 953 1,010 1,330 1,483 1,806 1,253 709
59
25-34 5,399 3,376 1,007 1,840 1,552 1,767 2,332 2,859 1,963 1,001
35-44 7,260 4,338 1,074 2,027 1,519 1,391 2,203 2,855 2,133 948
45-54 5,808 3,536 847 1,180 1,027 828 1,354 1,708 1,308 544
55-59 2,068 1,329 310 309 317 218 337 473 377 162
60-64 1,483 976 202 182 217 137 212 295 228 85
65-74 1,312 819 127 109 177 94 165 218 213 53
75 and above 259 173 31 20 23 15 22 35 37 8
Total 31,841 17,783 4,964 8,416 7,827 7,970 10,833 13,656 11,315 5,092
Source: ISTAT (2014)
Almost three out of ten Internet users, use internet to acquire information from the websites
of public administrations. ISTAT (2014) surveyed that in 2014 just over 9 million people
age 14 years old and over (29.8% of Internet users, up from 28.5% in 2013) utilized the
web in the last 12 months to gather information from the sites of the public
administrations; 7,560 million users (25%) have used of the online services to download
forms from sites of the public administration institutions and 5,207 million users (17.2%)
for sending forms that already been filled.
In this context, there were no gender differences, but there are differences according to age.
They are, in fact, people between 45 and 64 years old especially, using Internet as a
channel of communication and exchange with public administrations: more than 34.4%
from the surfers in this age group has consulted the sites of the public administrations to
obtain information, more than 26.4% of Internet users between 45 and 64 did it to
download modules from public administrations sites.
Table 3.11
Number of people from 14 years old age and above who used the Internet in the last 12 months for
private use related to the Public Administration classified by sex and age group - Year 2014
AGE CLASSES
Obtain information from
public administration
websites or public
services operators
Download Public
Administration forms or
public services operators
Send completed forms to
public authorities or
public services operators
Last 3
months
From the
last 3
months to 1
year
Last 3
months
From the
last 3
months to 1
year
Last 3
months
From the
last 3
months to 1
year
60
MALES
14-17 9.3 3.2 3.8 3.2 2.3 1.3
18-19 16.2 3.5 15.0 6.9 9.0 4.4
20-24 17.6 6.0 15.3 6.9 10.8 6.0
25-34 17.5 9.2 15.3 8.0 10.0 6.0
35-44 22.4 9.1 18.6 8.7 14.1 6.5
45-54 24.9 9.9 19.9 9.8 12.9 6.7
55-59 25.3 9.0 19.7 7.5 11.9 4.7
60-64 27.4 12.7 23.2 12.3 11.7 9.2
65-74 24.0 9.0 21.8 9.1 12.0 5.3
75 and above 16.1 8.8 13.3 10.4 4.6 6.3
Total 21.0 8.6 17.3 8.3 11.3 5.9
FEMALES
14-17 8.0 4.2 3.7 3.2 1.6 1.8
18-19 21.7 6.9 15.5 7.4 8.7 4.9
20-24 21.8 5.4 16.3 7.9 10.7 5.9
25-34 21.3 9.1 18.4 9.0 11.9 6.2
35-44 23.1 9.5 18.1 7.3 13.9 7.0
45-54 24.9 9.0 18.9 7.5 13.8 5.8
55-59 26.4 9.3 18.3 7.3 10.6 5.3
60-64 22.2 8.5 19.6 6.8 9.5 5.0
65-74 12.7 11.0 11.0 8.6 5.2 5.9
75 and above 10.9 9.3 11.1 10.3 2.2 5.5
Total 21.6 8.5 16.8 7.4 11.3 5.8
MALES AND FEMALES
14-17 8.6 3.7 3.8 3.2 2.0 1.6
18-19 18.9 5.1 15.2 7.2 8.8 4.6
20-24 19.7 5.7 15.8 7.4 10.8 6.0
25-34 19.4 9.1 16.8 8.5 10.9 6.1
35-44 22.8 9.3 18.4 8.0 14.0 6.7
45-54 24.9 9.5 19.4 8.7 13.3 6.3
55-59 25.8 9.1 19.1 7.4 11.4 4.9
60-64 25.3 11.0 21.7 10.1 10.8 7.5
65-74 19.9 9.7 17.9 8.9 9.5 5.5
75 and above 14.7 8.9 12.8 10.4 4.0 6.1
Total 21.3 8.5 17.1 7.9 11.3 5.9
Source: ISTAT (2014)
In the meantime, significant differences were recorded compared to the employment status,
45.3% of managers, entrepreneurs, professionals used the web in the last 12 months to
acquire information from the public administration, compared with 17.5% from the
61
workers; downloading forms instead, rank in the first for 43.1%, compared with 11.6% of
the workers, while the share of people who adopted the online service for the completion
and delivery of the modules is set as follows for 34.1% and 7.9%.
The main reasons of having online with the public administration or with the public
services operator are related to the payment of taxes (26.3% of users), enrollment to high
school or college (21.4%), access to public libraries (16.9%) and make a booking for
medical appointments (16.7%). The demand of loan for social security benefits rise to the
contact with the public administrations for 11.9% of cases, followed by the booking of
diagnostic tests (10.6%) and the demand for identity card, passport or driver's license
driving (10.2%). 7.6% of those who have kept in contact online with the public
administration to access to electronic health records, 6.5% to request personal certificates
and nearly 2% to effect a change of residence.
Table 3.12
Percentage of people from 15 years old and above who used the Internet in the last 12 months
private use related with the Public Administration or with public services operator, classified by
gender, status and employment status - Year 2014
CONDITIONS AND POSITIONS OF THE PROFESSION
Obtain information from
public administration websites
or public services operator
Download forms from public
administration websites or public
services operator
Send filled forms from public
administration websites or public
services operator
Last 3
months
From the last 3
months to 1
year
Last 3 months
From the last 3
months to 1
year
Last 3 months
From the last 3
months to 1
year
MALES
Employed 22.5 9.5 18.5 9.0 13.0 6.4
Executive, Business people, self-employed professionals 33.1 11.3 31.3 10.8 24.6 9.6
Managerial and administrative staff 31.2 12.7 25.5 12.8 16.5 8.5
Manual workers and apprentices 11.0 5.5 7.3 4.7 4.9 3.1
Self-employed and assistants 16.4 8.8 13.0 7.5 10.1 5.2
Job seekers (not the first time) 16.7 6.9 13.6 7.0 8.3 5.0
First-time job seekers 13.3 7.2 9.5 4.5 5.5 2.4
Students 19.7 6.7 15.9 8.1 10.8 6.5
Retired 23.5 9.8 20.6 9.4 8.3 5.9
Other Status 17.4 4.2 17.4 4.0 10.3 1.1
Total 21.2 8.7 17.5 8.5 11.5 6.0
FEMALES
Employed 25.8 10.2 21.0 8.6 14.6 6.5
Executive, Business people, self-employed professionals 35.2 11.9 33.1 12.0 21.6 12.2
Managerial and administrative staff 30.0 12.4 25.4 10.6 17.7 7.6
Manual workers and apprentices 13.4 6.0 6.8 3.8 5.1 2.6
Self-employed and assistants 20.6 5.6 15.8 4.8 11.1 3.6
62
Job seekers (not the first time) 19.2 8.0 13.2 6.1 8.0 5.1
First-time job seekers 14.4 6.1 12.0 5.2 6.1 5.2
Housewives 11.5 6.0 7.7 4.7 7.3 4.2
Students 22.6 5.6 16.3 7.6 10.6 5.2
Retired 17.3 10.2 14.2 8.6 5.1 6.2
Other Status 18.8 8.3 14.7 5.6 4.8 7.9
Total 21.9 8.5 17.0 7.5 11.5 5.8
MALES AND FEMALES
Employed 23.9 9.8 19.6 8.8 13.7 6.4
Executive, Business people, self-employed professionals 33.8 11.5 31.9 11.2 23.7 10.4
Managerial and administrative staff 30.5 12.5 25.5 11.6 17.2 8.0
Manual workers and apprentices 11.8 5.7 7.2 4.4 4.9 2.9
Self-employed and assistants 17.8 7.7 14.0 6.5 10.5 4.6
Job seekers (not the first time) 17.8 7.4 13.4 6.6 8.2 5.0
First-time job seekers 13.9 6.6 10.9 4.9 5.9 3.9
Housewives 11.5 6.0 7.7 4.7 7.3 4.2
Students 21.2 6.1 16.1 7.8 10.7 5.8
Retired 21.5 9.9 18.5 9.1 7.2 6.0
Other Status 17.9 5.7 16.4 4.6 8.3 3.6
Total 21.5 8.6 17.3 8.0 11.5 5.9
Source: ISTAT (2014)
Men pay taxes more than women related to the public administration: 30.1% compared to
22.1% of women. The women have the highest percentages in using the sites of the public
administration in order to book medical appointments (18% versus 15.5%), enrollment in
high school or college (24.3% versus 18, 8%) or access to public libraries (19.1% versus
14.9%). The professional status is a characteristic that also affects the motivation of contact
with the public administration. Internet users who connect online with the public
administration to pay taxes, in 44% of cases are managers, entrepreneurs or self-employed
and 27% is self-employed workers and managerial staff, employees. The demand for social
security benefits online covers 19.1% of users who are in search of new jobs and 18.4% of
retired from work.
Table 3.13
Number of people from 15 years old and above who used the Internet in the last 12 months
for private use related with the Public Administration or with the of public services operator,
classified by type of activity carried out, sex, and employment status - Year 2014 (in
thousands)
CONDITIONS
AND
Those
Those w
ho used
Intern
Activities
63
POSITIONS OF
THE
PROFESSION
who used internet for the last
12 months
et in the last 12 months for private
use regarding with the Public
Adm
inistration or with the public
services operators
Pay taxes
Request of social security benefits
(unemploym
ent benefits, retirem
ent allowances for
dependent children, etc.).
Personal documents
request(passport, identity card or driving license)
Certificates request (birth,
marriage, death)
Access to public libraries
(catalogs, bibliographic)
School or university Enrollment
Change of A
ddress
Access to electronic health
records
Reservation of m
edical visits
Reservations of diagnostic tests
(eg. Blood tests, urine, etc.)
MALES
Employed 9,888 3,691 1,213 392 459 313 466 558 88 324 652 435
Executive, Business
people, self-employed
professionals 1,602 836 385 82 118 95 89 113 17 69 136 101
Managerial and
administrative staff 3,450 1,721 563 197 200 132 245 254 36 155 313 194
Manual workers and
apprentices 3,268 652 114 72 88 53 78 128 20 67 119 67
Self-employed and
assistants 1,569 482 152 41 53 33 53 63 15 32 84 73
Job seekers (not the
first time) 1,789 531 110 106 62 48 75 52 15 34 60 30
First-time job seekers 484 108 15 6 14 3 20 35 4 5 10 3
Students 1,934 621 159 15 52 18 210 361 9 19 27 15
Retired 1,368 524 162 93 58 15 50 9 3 62 106 70
Other Status 242 66 16 18 7 2 6 9 - 4 8 5
Total 15,705 5,542 1,675 630 652 399 828 1,024 119 447 863 558
FEMALES
Employed 7,290 3,069 717 418 293 198 496 534 67 248 643 418
Executive, Business
people, self-employed
professionals 723 397 158 39 43 34 53 60 7 26 98 62
Managerial and
administrative staff 4,151 2,057 474 297 203 124 356 366 55 176 446 299
Manual workers and
apprentices 1,585 350 33 49 23 18 34 65 5 26 51 29
Self-employed and
assistants 831 266 51 33 24 22 54 44 - 21 48 28
Job seekers (not the
first time) 1,414 449 63 80 32 28 93 86 7 29 78 41
First-time job seekers 568 132 17 7 12 13 37 35 - 6 19 10
Housewives 1,842 393 56 52 23 16 45 97 4 30 55 28
Students 2,118 701 221 20 46 28 252 433 8 21 56 40
Retired 674 225 28 46 19 12 28 5 2 19 45 32
Other Status 141 42 12 12 4 1 6 6 - 5 11 4
Total 14,047 5,012 1,114 635 429 295 956 1,196 88 358 907 572
64
MALES AND FEMALES
Employed 17,178 6,760 1,930 810 752 511 962 1,092 155 572 1,296 854
Executive, Business
people, self-employed
professionals 2,325 1,233 543 121 161 129 142 173 24 95 233 163
Managerial and
administrative staff 7,601 3,777 1,037 494 403 256 601 619 91 331 760 493
Manual workers and
apprentices 4,852 1,002 148 121 111 70 112 193 25 92 170 96
Self-employed and
assistants 2,400 748 202 74 77 55 107 107 15 53 133 101
Job seekers (not the
first time) 3,203 980 173 187 95 75 168 138 22 63 138 70
First-time job seekers 1,052 241 32 13 26 15 56 70 4 11 29 12
Housewives 1,842 393 56 52 23 16 45 97 4 30 55 28
Students 4,052 1,322 381 35 98 46 462 794 16 40 82 55
Retired 2,042 749 190 138 77 27 78 14 6 81 152 102
Other Status 383 108 28 29 11 3 12 16 - 9 19 10
Total 29,752 10,553 2,789 1,264 1,081 694 1,784 2,219 207 806 1,770 1,130
Source: ISTAT (2014)
ISTAT (2014) also noted that there are growth in both of e-commerce and e-banking
usage. According to ISTAT (2014) 34.1% of individuals who have age of 14 years old and
over surfed the Internet in the past 12 months prior to the survey which conducted in the
same period, commercial transactions, ordered and / or bought goods and / or services for
private use (10 million and 321 thousand people). To these are added a share of 10.5%,
which ordered and / or bought goods and / or services over a year before the interview
(3,000,000 and 180,000).
Over the last four years there was an increase of about 7 percentage points in the use of the
web to conduct transactions (from 26.4% in 2010 to 34.1% in 2014). Even last year there
was an increase of 2.6 percentage points. Nevertheless there are still some concerns on the
part of a significant portion of users who are wary of commercial transactions online: in
fact, 54.3% of users said they had never made the purchase of goods or services through
the Internet.
65
Table 3.14
Percentage of people aged 14 and over who used the Internet in the last 12 months
and have ordered or purchased goods and / or services for private use of the internet
which classified by sex and age group - Year 2014
SEX, AGE CLASSES
Those who ordered or bought goods and/or services through internet
The Last 12 months
of whichMore than a
year agoNever
The last 3 monthsFrom the last 3 months
to 1 year
SEX
Males 36.6 25.2 11.4 11.5 50.8
Females 31.3 21.0 10.3 9.4 58.3
Total 34.1 23.2 10.9 10.5 54.3
AGE CLASSES
14-17 20.5 13.1 7.3 6.3 71.8
18-19 32.2 23.5 8.7 11.1 54.8
20-24 36.2 26.2 10.0 13.7 49.2
25-34 40.7 27.5 13.2 13.1 45.2
35-44 39.6 27.1 12.5 11.5 48.1
45-54 34.0 23.8 10.1 9.6 55.5
55-59 26.8 16.5 10.3 8.8 63.3
60-64 25.9 16.4 9.5 7.3 65.0
65- 74 21.6 13.6 8.0 5.7 71.2
75 and above 13.5 6.3 7.2 5.5 77.7
Total 34.1 23.2 10.9 10.5 54.3
Source: ISTAT (2014)
Regarding of online purchases in the last 12 months, the men (36.6%) are more likely to
exceed than women (31.3%), and so are the people between 25 and 44 years old
(approximately 40 %) and those who live in the region of Northern Italy (39.7%). (Table
3.15 and 3.16)
Between 2013 and 2014 the sectors that show an absolute growth rate are the major
household goods (+5.1 percentage points) and the clothing and sporting goods (+3.8
percentage points).
In 2014 the top two places on the list of purchases via e-commerce are placed overnight
stays for holiday (37.3%) and the purchase of clothing and sporting goods (35.3%).
Followed by purchases related to travel and accommodation (train and flight tickets, etc.,
66
33.4%), books (including e-books, 27.6%), the household (25.4%), of tickets for shows
(21%), electronic equipment (20.5%), movies and music (13.5%), telecommunications
services (12.9%). Much smaller are the odds of users who ordered and / or purchased
computer software and / or their updates excluding video games (9.9%), computer
hardware (8.5%), video games and / or their updates (7.5%), and food (6.4%).
As usual, there are significant gender differences in consumer behavior. Men spent more
than women for the purchase of electronic equipment (26.9% versus 12.3%), computer
hardware (13.2% vs. 2.3%), software programs (14% against 4.7%), video games and / or
their updates (10.3% vs. 3.9%) and telecommunication services (15.1% versus 10.1%). The
female instead are interested primarily in online purchase of books including e-books
(31.6% versus 24.6% of men), clothing and sports equipment (39.4% compared with 32,
2%). Most young people buy online more frequently clothes and sporting goods, more than
46.6% in the age group 18-19 years.
Table 3.15
Percentage of people from 14 years old and over who used the Internet in regard of e-commerce
usage in the last 12 months and have ordered or purchased goods and / or services for private use
over the Internet in the last 12 months classified by type of goods and / or services ordered or
purchased, sex and age group - Year 2014 (with the same characteristics)
AG
E CLA
SSES
Those who ordered or purchased goods and / or
services for private use over the Internet in the last 12 m
onthsType of goods and / or services ordered or purchased from the Internet
Alim
entary products
Household goods (furniture, toys,
etc.).
Pharmacy
Clothing, sporting goods
Movies, M
usic
Books (including e-book)
New
spapers, magazines
Material for distance learning
Com
puter software and / or its
updates (excluding video games)
Video gam
es and / or their updates
Com
puter Hardw
are
Electronic equipment (including
cameras, telecam
eras etc.)
Telecomm
unications services (TV,
broadband subscriptions, telephone subscriptions, prepaid cards phones
Stocks/ Shares, financial services
and / or insurance
Holiday accom
modation (hotels,
retirement etc.)
Other travel costs for holiday (train
and flight tickets, car rental etc.).
Tickets for shows
Tickets for lotteries or betting
Others
MALES
14-17 19.7 2.1 7.9 0.8 34.7 18.4 14.3 4.9 0.8 8.4 33.4 8.5 17.7 5.3 - 3.2 7.3 8.9 0.8 24.6
18-19 36.1 4.8 8.8 0.8 48.1 17.7 15.2 1.5 1.0 14.0 31.0 5.8 21.5 6.7 .. 18.9 18.0 12.2 2.9 17.2
20-24 38.9 4.7 13.9 0.4 38.1 20.2 23.2 4.0 1.8 12.7 21.1 15.4 27.5 7.5 1.5 29.7 26.0 18.6 3.1 21.8
67
25-34 41.1 5.4 24.8 0.9 38.7 16.3 25.2 7.4 3.4 15.1 12.5 15.2 32.2 16.7 4.9 41.9 33.9 25.8 3.1 19.0
35-44 43.0 7.1 34.8 1.8 35.3 16.7 24.3 6.6 3.2 13.7 8.6 12.7 28.0 16.1 7.7 41.7 33.2 20.7 2.7 19.8
45-54 38.2 6.8 28.1 1.8 27.6 12.9 27.3 6.1 2.2 14.3 4.6 13.3 25.3 17.2 9.8 37.6 34.2 20.2 0.5 19.2
55-59 30.8 7.4 24.8 3.2 19.5 11.7 25.2 6.1 2.5 12.6 2.5 10.8 24.5 15.1 8.9 38.8 33.6 18.0 - 21.2
60-64 32.9 9.2 23.3 3.8 18.1 7.2 24.9 6.2 1.3 14.5 1.7 15.0 23.5 18.7 13.0 36.4 40.3 22.4 1.7 17.8
65-74 23.0 5.1 22.8 1.2 11.0 15.4 29.9 6.7 1.8 20.6 1.6 14.0 20.5 19.3 19.1 40.4 39.4 14.9 0.3 16.3
75 + 14.0 - 29.1 - 2.6 6.9 29.7 4.8 - 2.4 - 10.2 17.3 2.4 13.1 36.6 11.7 6.7 - -
Total 36.6 6.2 26.0 1.6 32.2 15.4 24.6 6.1 2.5 14.0 10.3 13.2 26.9 15.1 7.2 37.1 31.9 20.3 2.0 19.6
FEMALES
14-17 21.3 1.0 5.7 - 49.6 19.2 26.8 2.0 - 2.7 7.3 0.6 10.7 6.2 - 4.1 12.7 13.8 0.8 26.7
18-19 28.0 2.4 7.8 - 44.5 22.6 32.4 3.0 0.9 4.8 4.3 2.4 20.1 2.9 0.9 25.2 32.9 26.5 - 18.2
20-24 33.4 1.9 13.4 0.9 47.1 12.4 37.2 5.6 1.4 3.6 5.8 2.1 15.2 8.9 0.8 37.5 35.7 22.7 0.3 17.8
25-34 40.2 6.2 26.0 1.3 42.5 11.7 27.6 6.3 3.3 4.7 4.0 3.0 13.8 11.5 5.1 42.1 42.1 21.8 0.5 16.7
35-44 36.0 7.8 33.9 3.1 39.6 9.6 30.7 4.2 2.1 5.6 4.4 2.3 12.9 10.5 3.8 39.0 33.2 22.0 .. 17.6
45-54 29.4 10.0 20.9 3.3 37.0 8.1 33.0 5.5 2.5 3.9 2.4 1.9 9.4 11.2 6.6 40.6 35.3 22.9 .. 13.3
55-59 21.5 4.4 27.0 2.4 21.1 12.9 35.5 5.9 4.0 5.3 - 2.4 8.2 9.7 5.4 44.3 41.0 26.4 - 14.3
60-64 15.7 7.4 29.4 4.1 13.8 7.8 44.0 6.4 2.6 6.1 2.3 1.2 8.3 9.2 5.6 36.1 40.0 23.0 - 12.0
65-74 19.2 7.9 24.7 1.7 15.6 4.1 36.3 - 0.8 4.7 0.7 5.1 3.7 8.5 5.5 21.0 26.8 14.3 - 22.6
75 + 11.8 - - - 65.2 - 50.2 23.0 - - - - 9.1 - - 27.2 23.0 23.0 - 7.6
Total 31.3 6.5 24.5 2.2 39.4 11.0 31.6 5.0 2.3 4.7 3.9 2.3 12.3 10.1 4.2 37.4 35.3 22.0 0.2 16.9
MALES AND FEMALES
14-17 20.5 1.5 6.8 0.4 42.4 18.9 20.8 3.4 0.4 5.5 19.9 4.4 14.0 5.8 - 3.6 10.1 11.5 0.8 25.7
18-19 32.2 3.8 8.4 0.5 46.6 19.8 22.4 2.1 1.0 10.1 19.8 4.4 20.9 5.1 0.5 21.6 24.3 18.3 1.7 17.6
20-24 36.2 3.4 13.7 0.7 42.3 16.6 29.6 4.8 1.6 8.5 14.1 9.3 21.9 8.1 1.2 33.3 30.4 20.5 1.8 20.0
25-34 40.7 5.8 25.4 1.1 40.5 14.1 26.3 6.8 3.4 10.0 8.4 9.3 23.3 14.2 5.0 42.0 37.9 23.9 1.8 17.9
35-44 39.6 7.4 34.4 2.4 37.2 13.6 27.1 5.6 2.7 10.1 6.8 8.1 21.4 13.7 6.0 40.5 33.2 21.2 1.5 18.8
45-54 34.0 8.1 25.0 2.4 31.5 10.9 29.7 5.8 2.4 9.9 3.7 8.5 18.6 14.7 8.5 38.9 34.6 21.3 0.3 16.7
55-59 26.8 6.4 25.6 2.9 20.1 12.1 28.7 6.0 3.0 10.1 1.6 7.9 18.8 13.2 7.7 40.7 36.2 20.9 - 18.8
60-64 25.9 8.8 24.8 3.9 17.1 7.3 29.6 6.2 1.6 12.5 1.8 11.6 19.8 16.4 11.2 36.3 40.3 22.6 1.3 16.4
65-74 21.6 6.0 23.4 1.4 12.5 11.8 32.0 4.6 1.5 15.4 1.3 11.1 15.0 15.8 14.7 34.2 35.3 14.7 0.2 18.3
75 + 13.5 - 22.6 - 16.7 5.4 34.3 8.9 - 1.9 - 7.9 15.5 1.9 10.2 34.5 14.2 10.4 - 1.7
Total 34.1 6.4 25.4 1.9 35.3 13.5 27.6 5.6 2.4 9.9 7.5 8.5 20.5 12.9 5.9 37.3 33.4 21.0 1.2 18.4
Table 3.16
Number of people from 14 years old and over who used the Internet in regard of e-commerce in
the last 12 months and have ordered or purchased goods and / or services for private use over the
Internet in the last 12 months classified by type of goods and / or services ordered or purchased,
region, geographical distribution and type of municipality - Year 2014 (in thousands)
REG
ION
S,
GEO
GR
APH
I
Those who used
Those who
Type of goods and / or services ordered or purchased from the Internet
68
Source: ISTAT (2014)
CA
L DISTR
IBU
TION
AN
D TY
PES OF
CO
MU
NE
internet for the last 12 months
ordered or purchased goods and / or services
for private use over the Internet in the last 12
months
Alim
entary products
Household goods (furniture, toys, etc.).
Pharmacy
Clothing, sporting goods
Movies, M
usic
Books (including e-book)
New
spapers, magazines
Material for distance learning
Com
puter software and / or its updates
(excluding video games)
Video gam
es and / or their updates
Com
puter Hardw
are
Electronic equipment (including cam
eras,
telecameras etc.)
Telecomm
unications services (TV,
broadband subscriptions, telephone
Stocks/ Shares, financial services and / or insurance
Holiday accom
modation (hotels, retirem
ent
etc.)
Other travel costs for holiday (train and
flight tickets, car rental etc.).
Tickets for shows
Tickets for lotteries or betting
Others
Piemonte 2,265 879 66 233 13 282 129 252 76 31 95 56 76 168 132 61 349 309 185 15 157
Valle
d'Aosta/
Vallée
d'Aoste 68 25 2 8 1 10 4 8 2 .. 2 1 1 6 3 1 10 9 4 .. 5
Liguria 847 315 17 85 6 127 50 81 13 2 27 26 24 55 38 18 124 86 69 - 62
Lombar
dia 5,488 2,228 174 596 34 732 357 642 138 59 284 214 207 503 333 165 956 865 584 37 404
Trentino-
Alto
Adige 581 267 19 74 4 111 37 68 14 5 32 24 23 63 32 11 100 78 45 3 47
Bolzano/
Bozen 293 133 7 34 1 54 23 32 9 2 15 13 12 38 19 4 55 42 28 2 26
Trento 288 135 13 40 3 56 14 35 6 3 17 11 11 26 13 7 45 36 17 1 21
Veneto 2,570 988 59 258 22 308 119 282 53 16 100 63 77 203 126 82 360 308 198 5 196
Friuli-
Venezia
Giulia 678 286 16 74 5 106 36 98 22 6 31 25 17 57 38 20 117 93 43 3 53
Emilia-
Romagna 2,379 924 44 230 25 305 127 243 48 23 93 55 75 180 109 56 389 349 209 13 185
Toscana 1,990 782 48 206 23 269 112 217 38 15 59 60 68 191 96 40 318 269 190 7 151
Umbria 446 161 16 42 2 61 21 42 7 4 18 15 14 30 23 5 59 40 31 2 32
Marche 780 298 20 65 2 115 39 83 14 5 27 18 25 53 38 14 110 79 61 4 64
Lazio 3,105 1,036 68 290 23 396 126 306 66 22 75 80 88 190 128 57 391 320 253 9 131
Abruzzo 628 203 13 53 2 88 24 49 12 10 19 18 23 45 22 8 60 46 33 4 33
Molise 150 45 2 12 1 19 5 13 2 2 2 1 3 9 6 1 12 9 5 1 8
Campania 2,473 429 25 84 4 118 56 111 12 11 27 27 28 85 51 15 136 135 93 7 72
Puglia 1,680 417 17 67 6 149 34 87 20 15 47 32 39 73 53 17 110 121 62 10 98
Basilicata 237 58 3 11 1 25 4 17 3 2 7 1 7 12 3 2 13 14 6 - 11
Calabria 832 199 12 50 5 90 28 47 8 7 18 10 15 43 19 5 41 47 21 3 38
Sicilia 2,183 418 22 98 7 158 41 107 23 12 30 27 32 86 40 21 102 156 47 3 62
Sardegna 897 362 14 81 7 173 42 97 12 8 31 24 34 67 46 12 89 113 33 1 90
Nord-
ovest 8,667 3,447 260 923 53 1,151 539 983 230 92 409 297 309 732 506 245 1,439 1,268 841 52 628
Nord-est 6,208 2,466 139 636 56 829 319 690 137 50 256 167 192 503 304 169 966 828 495 23 481
Centro 6,321 2,277 152 603 49 842 297 648 125 46 179 172 194 464 285 117 877 709 535 22 378
Sud 5,999 1,350 72 276 18 490 150 325 56 45 120 91 115 268 155 49 372 373 219 24 260
Isole 3,079 780 36 180 14 332 83 204 36 20 61 51 66 153 87 33 192 268 80 4 152
69
The center of "C
omune" from
m
etropolitan area
4,863 1,690 119 411 40 521 240 524 142 51 171 112 165 306 277 136 707 772 510 14 264
Outskirts of the
metropolitan
area
3,895 1,414 94 365 7 516 251 398 77 24 141 111 139 276 166 97 547 511 318 19 257
Up to 2,000
people
1,492 585 25 148 8 243 75 161 23 11 52 41 38 129 59 29 171 140 91 8 130
From 2,001 to
10,000 inhabitants
6,958 2,393 173 635 46 880 286 624 139 52 222 159 175 518 282 111 827 647 407 26 458
From 10,001 to
50,000 inhabitants
7,808 2,561 148 664 54 918 316 682 108 75 272 215 216 549 322 129 905 757 465 29 476
50,001 inhabitants and m
ore
5,258 1,677 99 395 36 566 222 461 94 39 166 140 143 343 229 110 688 618 380 28 315Italy 30,275 10,321 658 2,618 191 3,644 1,389 2,850 583 253 1,024 777 875 2,121 1,335 612 3,845 3,445 2,172 125 1,900
Source: ISTAT (2014)
Significant share of users who used the Internet to take advantage of online banking
(37.4%) which recorded the highest increase (+4.5 percentage points), this can be
explained in part of the introduction for new applications, which in addition affect the
existing banks, which enabled the creation of total virtual banks, which allow customers to
operate directly on their account for fully 24 hours, without the need of intermediary
figures. People from 25-54 years olds are the biggest users of e-banking (over 46%) and
are also registered the most significant increases (it refers to table 3.9).
In recent years there has been an increase spreading the opportunity to connect into the
network at any time and in any place. In 2014, about 11 million and 396 thousand people
from 14 years old and older who said they had used the web in the past three months by
connecting in places other than home or workplace with a portable device (38.8 % of those
who used the Internet in the last 3 months). In particular, 22.4% of Internet users of age 14
years old and over used a laptop as much as 35.4% a mobile phone or a smartphone and a
small share of 6.7% other portable devices. Web surfers are mainly between 14 and 24
years old using mobile devices to connect in places other than home or place of work
70
(more than 67%), while this practice is only a third of users between 35-44 years old and
the proportion decreases sharply by increasing of age. The relationship with these
technologies is confirmed more pronounced among men (40%) than women (37.4%). It
should be noted, however, that, between 20-24 years, the women have higher rates respect
to men. It is quite surprising that people with range age 25 – 54 years old have been
outnumbered by the number of teenagers in term of using internet, whether by portable
devices, laptop devices or other devices than laptop. Workers class in Italy which around
25 – 54 years old tend to be not addicted as well as not necessary needed the connection of
internet. It is presumably, they are too busy with their job where as a result the number of
the users who used internet accessed whether from laptop, cellphone or other devices than
laptop is smaller than juvenile number who is around 14 – 24 years old and presumably
high school students and university students.
Table 3.17
Percentage of people from 14 years old and over who used the Internet in the last 3 months in
places other than home or workplace classified by type of mobile device used, sex and age
group - Year 2014AGE Those who used a portable Those who Those who used a mobile device to
71
CLASSES
device (eg. Laptop, tablet,
phone, smartphone, PDA,
PDA, MP3 player, etc.)
used a laptop
to connect to
the Internet
(eg. Laptops,
tablets)
connect to the Internet apart from the
laptop
Yes
Yes,
cellular
phone,
smartphone
Yes, other
portable
device (eg.
Handheld,
PDA, MP3
player, etc.)
MALES
14-17 69.9 37.1 66.0 65.6 15.3
18-19 72.5 42.6 69.3 68.8 13.9
20-24 65.3 37.4 62.2 61.7 13.0
25-34 53.6 31.7 50.3 50.0 9.7
35-44 37.5 22.3 35.1 34.6 7.0
45-54 27.4 18.0 24.7 24.5 4.6
55-59 18.7 11.3 16.2 16.2 2.9
60-64 17.1 11.1 13.3 12.7 2.3
65-74 14.0 9.3 10.1 9.7 2.4
75 and above 9.7 5.5 7.7 7.7 2.8
Total 40.0 23.8 37.1 36.7 7.4
FEMALES
14-17 69.3 36.8 65.2 64.4 14.3
18-19 71.7 36.9 68.0 67.5 9.9
20-24 68.9 39.3 65.9 65.6 11.1
25-34 48.3 28.7 44.8 44.5 7.5
35-44 29.0 15.2 26.6 26.4 3.9
45-54 20.6 11.7 17.3 17.0 2.7
55-59 18.3 10.8 15.7 15.3 3.5
60-64 17.3 8.6 13.2 12.4 1.8
65-74 11.4 5.8 9.7 8.9 2.0
75 and above 9.0 7.9 3.5 2.4 1.1
Total 37.4 20.8 34.3 33.9 5.8
MALES AND FEMALES
14-17 69.6 36.9 65.6 65.0 14.8
18-19 72.1 39.9 68.7 68.2 12.0
20-24 67.1 38.3 64.0 63.7 12.1
25-34 51.0 30.3 47.6 47.3 8.6
35-44 33.4 18.8 31.0 30.6 5.5
45-54 24.1 14.9 21.1 20.8 3.7
55-59 18.5 11.1 16.0 15.8 3.2
60-64 17.2 10.1 13.2 12.6 2.1
65-74 13.1 8.0 10.0 9.4 2.3
75 and above 9.5 6.1 6.7 6.4 2.3
Total 38.8 22.4 35.8 35.4 6.7
Source: ISTAT (2014)
72
Nearly a third of Internet users are using the "cloud" service. It also gives the possibility to
the outsourced infrastructure (cloud) in order to access their files at any time and on any
device. In 2014, among people from 6 years old and over who used the Internet in the last
three months, about one-third (28.3%, i.e. about 9 million Internet) used the services of
web storage to save and share documents, images or other files. However it is still a high
proportion of users who are not aware of the existence of these cloud platforms (38.5%).
Table 3.18
Percentage of people from 6 years old and above who used the Internet in the last
three months for storage use and / or share files over the Internet, sex and age group -
Year 2014
Source: ISTAT (2014)
73
Storage spaces / share on the Internet to save or share files are mostly used by men (30.2%
versus 26.1% of women), the people between 18 and 34 years old (over 35%), by students
(38.8%) and executives, entrepreneurs, professionals (36.5%). These cloud platforms are
used especially to save or share photos (73.9%), text, spreadsheet or electronic
presentations (47.4%), music (37.3%) and video including movies and TV shows (23.3%).
The small proportion comes from those who use it to share or save cultural content such as
e-books or magazines in digital format (8.6%).
Table 3.19
Number of people from 6 years old and over who used the Internet in the last 3
months to save and share documents, pictures or other files using storage services on
the internet (eg. Google Drive, Dropbox, etc.) classified by type of file saved or shared
sex and age group - Year 2014 (in thousands)
AGE
CLASSES
Those
who
used
internet
for the
last 3
months
Those who saved or
shared documents,
images, music and
other files using
storage services on
the internet (eg.
Google Drive,
Dropbox, skydrive,
Picasa, Flickr etc.)
Type of saved or shared files
Text,
spreadsheets
(eg Excel)
electronic
presentations
(eg slide)
Photos
E-book,
online
magazines
Music
Video
(film and
TV
program
s
included
)
Others
MALES
6-10 642 40 7 13 2 11 9 9
11-14 871 186 60 108 10 100 65 22
15-17 821 275 107 193 23 165 105 44
18-19 519 197 105 152 29 112 70 29
20-24 1,336 510 264 402 41 292 202 102
25-34 2,756 1,007 518 753 69 427 309 177
35-44 3,749 1,290 681 957 110 418 285 254
45-54 2,983 877 477 602 108 257 184 193
55-59 1,170 247 144 165 31 50 34 38
60-64 892 238 128 177 19 45 26 35
65-74 836 166 76 114 11 34 21 18
75+ 196 37 19 29 4 5 3 5
Total 16,774 5,070 2,585 3,664 457 1,919 1,315 924
74
FEMALES
6-10 584 36 - 12 - 22 10 4
11-14 894 226 56 165 5 140 70 18
15-17 794 235 75 193 16 148 77 21
18-19 492 171 68 142 14 88 48 17
20-24 1,299 488 227 382 43 221 109 73
25-34 2,643 879 399 720 59 343 175 93
35-44 3,510 866 352 671 65 247 148 125
45-54 2,825 603 300 411 74 151 82 77
55-59 898 203 105 144 21 43 36 46
60-64 590 124 53 83 15 14 15 13
65-74 476 79 34 47 2 14 10 11
75+ 63 21 10 18 4 4 3 3
Total 15,067 3,932 1,677 2,986 319 1,434 782 501
MALES AND FEMALES
6-10 1,226 76 7 25 2 32 19 13
11-14 1,765 412 116 273 15 241 135 40
15-17 1,615 510 182 385 39 313 182 65
18-19 1,012 369 173 294 44 200 119 46
20-24 2,635 998 490 784 85 513 311 175
25-34 5,399 1,886 917 1,472 128 771 484 270
35-44 7,260 2,156 1,033 1,628 175 665 433 379
45-54 5,808 1,480 777 1,012 182 408 265 269
55-59 2,068 450 249 308 52 93 71 83
60-64 1,483 362 181 260 35 59 40 48
65-74 1,312 245 110 161 13 48 31 30
75+ 259 58 29 47 8 9 7 7
Total 31,841 9,002 4,263 6,651 776 3,353 2,097 1,425
Source: ISTAT (2014)
Actually, the usage of cloud is to avoid losing file or important data, to share to another
platform or another users and having more space where probably hardware memory is not
sufficient to accommodate data storage anymore.
The most frequent reasons for internet users in using storage services and / or file sharing
on the Internet are required to avoid data loss (51.8%) and the ease to share files with other
users (47.7%). 32.4% using such platforms for the possibility of using the files from
different devices or places, while the 27.8% to have the possibility to use more storage
75
spaces. Only 13.3% use them to gain access to large collections of music, TV shows or
movies. Men used cloud services for almost all reasons considered except the ease with
which you can share files with other people, however, there is a greater dynamism of
women (49.1% of women compared to 46.6% of men). Age is a feature that affects the
motivation of using the services of storage on the Internet. Young people between 15 and
24 use them for the ease in order to share their files with other users (over 53%) and to
have access to storage large files or catalogs of music, TV shows or movies (over 15.6%),
while people aged 25 to 34 years old using these platforms primarily to prevent data loss
(57.6%) and to use files from different devices and or from different places (37.6%).
(Table 3.20)
Table 3.20
Percentage of persons from 6 years old and above who used the Internet in the last 3
months to save and share documents, pictures or other files using storage services on
the Internet (eg. Google Drive, Dropbox, etc.) classified by motive, sex and age group
- year 2014
AGE
CLASSES
Those who saved or
shared documents,
images, music and
other files using
storage services on
the Internet (eg.
Google Drive,
Dropbox, Skydrive,
Picasa, Flickr etc.)
Motive
Using files
from
different
devices and /
or from
multiple
locations
need a
larger
memory
space
avoiding
data loss
To easily
share files
with other
people
To have an
access to
large
archives /
catalogs of
music, TV
shows or
movies
MALES
6-10 6.2 7.7 4.4 30.2 10.4 27.2
11-14 21.3 18.5 21.4 40.7 47.5 23.7
15-17 33.5 27.2 23.6 44.4 54.4 26.3
18-19 38.0 40.0 31.7 39.5 51.2 21.1
20-24 38.1 39.8 33.7 52.7 58.7 18.1
25-34 36.5 41.8 30.4 57.3 52.7 12.3
35-44 34.4 41.5 30.7 56.0 44.8 13.3
45-54 29.4 35.9 29.9 51.9 43.7 11.0
55-59 21.1 30.8 23.7 55.3 36.1 8.3
60-64 26.7 27.9 21.6 51.7 33.4 10.3
65-74 19.9 23.0 28.6 52.6 30.2 8.8
76
75 + 19.0 28.2 29.7 48.4 23.8 -
Total 30.2 36.6 29.1 52.8 46.6 14.1
FEMALES
6-10 6.1 10.0 10.4 24.6 32.1 24.2
11-14 25.3 13.5 17.6 35.0 44.6 26.7
15-17 29.7 16.2 27.1 46.6 52.2 22.0
18-19 34.8 19.5 29.1 35.6 54.8 18.9
20-24 37.6 31.2 27.0 50.2 61.1 13.1
25-34 33.3 32.7 33.3 57.8 50.7 9.5
35-44 24.7 28.9 25.1 52.5 47.6 9.1
45-54 21.3 28.7 25.4 49.5 43.0 11.0
55-59 22.6 25.0 17.9 56.9 45.9 12.5
60-64 21.0 22.2 21.1 50.7 37.5 7.5
65-74 16.6 14.4 13.8 47.9 46.2 7.1
75 + 33.2 10.7 30.6 45.3 47.6 3.0
Total 26.1 27.0 26.2 50.6 49.1 12.4
MALES AND FEMALES
6-10 6.2 8.8 7.3 27.5 20.7 25.8
11-14 23.3 15.8 19.3 37.6 45.9 25.4
15-17 31.6 22.2 25.2 45.4 53.4 24.3
18-19 36.4 30.5 30.5 37.6 52.9 20.1
20-24 37.9 35.6 30.4 51.5 59.9 15.6
25-34 34.9 37.6 31.8 57.6 51.8 11.0
35-44 29.7 36.5 28.4 54.6 45.9 11.6
45-54 25.5 33.0 28.1 50.9 43.4 11.0
55-59 21.8 28.2 21.1 56.0 40.5 10.2
60-64 24.4 26.0 21.4 51.4 34.8 9.4
65-74 18.7 20.2 23.8 51.1 35.3 8.3
75 + 22.4 21.9 30.0 47.3 32.4 1.1
Total 28.3 32.4 27.8 51.8 47.7 13.3
Source: ISTAT (2014)
Ardizzi and Iachini (2013), stated that electronic payment not only facilitates and speeds
commercial exchanges but brings substantial cost savings for the whole society. Empirical
studies have found that in the industrialized countries the social cost of the production and
use of cash is still the largest component of the total cost of retail payment services.
Furthermore, the substitution of electronic for cash transactions will foster transparency in
exchange and shrink the so-called "shadow economy". In Italy the use of cash is still
predominant; the number of cashless transactions per capita has increased over the last few
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years, but it is still below the European average. Moreover, the use of payment instruments
is quite diversified across the Italian regions. Nevertheless, cash payments still account for
around 70 per cent of face-to-face payments in Europe, albeit with significant differences
between countries. In Italy the use of electronic instruments, such as the payment cards, is
limited and use of cash, at 90 per cent of all payments, is higher than the European
average. Moreover, the dualism that characterizes the Italian economy is reflected in the
payment habits. Electronic payment instruments are used more commonly in the northern
than in the southern regions, but even the North lags behind the European average. The
differences between countries cannot be explained by divergences in payment habits alone.
The diffusion of a particular instrument depends, in fact, also on the supply structure,
which determines accessibility and usability, and the supply structure in turn is influenced
by demand characteristics and consumers’ habits.
In regard of payment method, credit card is still the most common way to settle a fee as it
is utilized in 43% of online purchases. Turned out, this percentage has decreased
substantially (it was 70% in 2013) in favor of other payment methods, such as using digital
wallet (eg. Paypal) that rose from 12% in 2013 to 18%, and especially transfer activity,
which significantly grew from 6% in 2013 to 17%.
The introduction of MyBank service, an online banking solution that allows users to make
online transactions and charge the cost to your current account, which took place in 2013,
had an impact on this process. MyBank is already available for the merchant who request
it. It is currently integrated with over 140 banks and allows the transfer of money from
bank to bank in Europe. In addition to facilitating the purchase on line for the user, even
for high amounts of spending, it allows for the merchant side a real-time confirmation of
payment which consequent a better risk management. On the other hand, PayPal is a
payment instrument that is spreading due to the ease of use and popularity gained among
consumers. Despite having a higher cost to other services, in fact, many merchants keep
using it between the method of payment and to avoid losing customers. Activation of
payment via Paypal is also often used by small merchant who are using e-commerce
media, because of the ease of implementation.
Cash on delivery, mostly in cash, continues to have a weight in terms of number of
transactions, and is also driven by the demand side: many of the new web shopper still
have little confidence in purchasing online prefers to pay only after receiving the goods.
The payment via the mobile appears for the first time and occurs in 1% of transactions.
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The success of MyBank shows that the evolution of the mode of payment, a fundamental
aspect for the growth of e-commerce, and the introduction of new tools, not only facilitates
the completion of the transaction and the abandonment of inefficient forms of payment, but
it helps to increase the base of online shoppers.
3.2 Benefits realized through adoption of e-commerce in Indonesia and Italy
For developing country like Indonesia, integration into the global economy through
economic liberalization, deregulation, and democratization is seen as the preeminent way
to overcome poverty and inequality (Raynard and Forstater, 2002). In term of SMEs,
electronic commerce (commonly referred to as e-commerce), is where business activities
are enhanced and accelerated by the Internet, and is one of the technologies being
promoted by governments to address some of the critical issues affecting SMEs (Ramos,
2003). It provides the opportunity for low cost entry into the global marketplace where this
was once seen as impossible for the SME sector. Among other advantages noted in the
literature are increased access to markets (Poon, 2003), increased partnerships between
large/intermediate and small businesses (MacGregor and Vrazalic, 2005), and improved
communications with customers and suppliers (Daniel and Wilson, 2002). By adopting e-
commerce, the government aims to improve SMEs access to information – such as to find
potential buyers; to locate product/service suppliers; and to undertake price/product
comparisons. Other expected benefits of e-commerce were improved marketing and
improved competitiveness (Setiyadi, 2002). In the meantime, according to Kartiwi and
Gunawan (2013), the benefit of e-commerce regarding of female-owned SMEs in
Indonesia are showing that by utilizing e-commerce, they can increased new
market/costumer, improved marketing, improved competitiveness, increased sales, and
improved customer service and more interestingly, those two benefits of e-commerce can
be seen between women entrepreneurs in urban and rural areas, namely improve internal
efficiency (urban = 100%, rural = 66.7%) and reduce cost of business operation (urban=
87.5%, rural = 66.7%).
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Chart 3.18
Benefits of E-commerce Experienced by Female-Owned SMEs in Urban and Rural
Areas
Chart 3.19
Benefits of E-commerce Experienced by Female-owned SMEs
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Source: Kartiwi and Gunawan (2013)
Source: Kartiwi and Gunawan (2013)
Based on chart 3.18, the smaller number of female entrepreneurs in rural areas experienced
the “improved internal efficiency” benefit of ecommerce compared to those in urban area,
may be attributable to the nature of the businesses in this area. Generally businesses in
rural area are family businesses and many of the decisions are made personally by the
entrepreneur, thus make corporate structure simple and did not require a complicated
internal mechanism. Whereas, the smaller number of female entrepreneurs in rural areas
found that e-commerce had helped them to reduce the cost of business operation highlights
the development disparity between urban and rural areas in Indonesia. While the urban
businesses have the privilege to enjoy a fast connection broadband, while instead many of
the rural businesses are still connected to the Internet using a dial up connections. This dial
up service is often too slow as some area the speed may only be about 20-23 kbps, and yet
they still have to pay for an expensive metered call (Boerhanoeddin, 2000; Kartiwi and
MacGregor, 2005). Despite from that, the result has shown that e-commerce has
successfully level the playing field. With the development of e-commerce, female
entrepreneurs will be able to enjoy a convenient access to a greater market improved their
business competitiveness. E-commerce has also become an important avenue of the IT
enabled home based working. The e-commerce technology has provided an easier and cost
efficient for female entrepreneur, particularly those in urban area, to run a viable business
from home. The Indonesian government has a very clear sense of how its sizeable
investments in internet, communications and technology (ICT) can contribute to economic
growth—and to societal wellbeing. Indonesia has already invested substantially in fixed,
mobile and internet access nationwide. The next phase of ICT development is the
development of broadband. With the completion of the Palapa Ring initiative, establishing
the infrastructural foundations for national broadband, the government will be focusing on
how to utilize this technology meaningfully for the country. Specifically, under the Jakarta
Declaration of Meaningful Broadband 2011, the government has unveiled a US$ 9.2
billion plan to tap into broadband infrastructure to deliver services that are affordable,
usable and “empowering” to the average Indonesian. The objective is to reach 30 percent
broadband penetration nationwide by 2014—the critical mass of deployment that the
government considers necessary for the nation to remain competitive. The Jakarta
Declaration delineates two equally important initiatives: One for developing what is termed
“meaningful supply” of broadband and the other for developing “meaningful demand”,
while meaningful supply refers to provision of speedy broadband—at least 2Mbps and up
to 10Mbps—at affordable prices. It will involve fixed and wireless communication to bring
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services along the “last mile” to consumers. Meaningful demand is intended to stimulate
the creative capacity of Indonesia’s “early adopters,” including those who located outside
urban cores, to produce locally relevant content that lowers users’ costs, increases their
income, and transfers essential skills and government services to them with smart devices
and with apps that are affordable, usable, and empowering. Although the e-commerce
adoption is still low in Indonesia, however, Hafied (2007) noted that Indonesia have started
to apply and feel the positive impact from e-commerce to maintain business process. Chan
(2001) and Schneider (2002) are also agreed that e-commerce offers unmatched saving in
terms of transaction costs, reducing cost of advertising and promotion, enhancing
communication speed between buyer and seller, while the companies can also shorten their
traditions of supply chains, minimizing transport obstacles and reducing delivery costs not
to mention eliminating physical limitations of time and space which all that are already
mentioned can bring an enlightenment for Indonesian economy.
E-commerce also bring a new way of shopping where in these days, little by little the
numbers of sites which offer goods by online are growing. C2C sites like kaskus,
tokobagus.com and berniaga.com, while B2C sites like lazada, bhinneka, agoda, zalora
tiket, groupon are few examples of the numbers how e-commerce is growing in this
country. Although mostly C2C sites like kaskus, tokobagus.com or berniaga.com do not
compulsory require their users to do an online transaction. Nonetheless, thanks to the
breakthrough of online banking whether from local or foreign bank, doing an online
transaction is not a mission impossible anymore, where online transaction is really
recommended by almost all big banks in Indonesia as it is one of the objectives to be
fulfilled in order to lessen bank staffs workload. At same point, efficiency of time and
money can be achieved for both clients and the banks themselves so they do not need to
preoccupy doing online transactions anymore. As a matter of fact, online transactions are
not just utilized for purchasing motive online only, nowadays, paying bills for cable TV,
electricity, water, phone, credit card or to recharge cellular phone credit, all can be done by
online payment. Even though, in terms of e-commerce usage, Indonesia is still lacking
behind its neighbors, nevertheless the numbers of e-commerce usage is hiking year by
year. Not to mention the increment of retail sales from e-commerce which also help the
data of its national sales. Thanks to e-commerce as well, looking for a job nowadays is not
as difficult as before. As an example, Linkedin, a social media which provides a service for
job seekers who are looking for a job or companies that open job opportunities. Job seekers
who already have an account can build their resume and get connected with all their
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connections whether companies they had been worked for, or people who they recognize
which can be friends, colleagues or ex-schoolmates. Not just that, users who already have
an account can also connect with people who are related with their connections. Linkedin
also gives an advantage for those who subscribe to become a member, for example, the job
seeker can view the salary given from the company they want to apply. Apart from
Linkedin, another local – regional websites such as id.jobsdb.com/id and jobstreet.co.id,
are also quite popular among the job seekers and employers. Although Linkedin offers neat
and fun interface, similar like Facebook or Friendster, but in term of user numbers, jobsdb
and jobstreet are being the number one preference for Indonesians to look for employees or
employers, because those two sites normally post job opportunities in Indonesia or nearest
region, not to mention, they provide Indonesian language version as well, in contrary
Linkedin does not have it. Universities students also can enjoy the benefits from e-
commerce as it is getting evolve each day in Indonesia. They can access thousands of
journals from every academic source in order to help their research and assist their study.
Usually, the universities pay some amount to subscribe to be an exclusive member, so their
students can freely access the journals sources which are normally closed for public to find
related information for their study.
The growth of e-commerce in Indonesia also gives an affect in tourism sector. In these
days it is more convenient to book a room in a hotel through online, as the guests can get
lower price than actual, they also not need to bother themselves visiting hotels one by one
just to compare hotel price and rooms availability during their trip or vacation. Many
transportations company at these days also encourage their clients to buy or book their
ticket online whether it comes to trains, planes, taxis, or buses. However, unfortunately, in
term of purchasing online ticket, it is not still quite popular among Indonesian citizens in
doing it because they found there is no any advantage by doing an online reservation in
terms of ticket fares which offered online compared with purchasing directly through the
counter. So far, only Airasia, a Malaysian budget airline company which apply a lower rate
for those who make online reservation in advance, instead of coming directly to their
counters, where other local airlines such as Garuda Indonesia, Lion Air and other airlines
companies never given any advantage by making online reservation.
In Italian case instead, the penetration of e-commerce is much more advanced rather than
in Indonesia, whether in terms of usage, connections or its security. According to
wikipedia, internet connection in Italy is much more reliable and fast compared to
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Indonesia, as Italy placed in rank 33rd while Indonesia’s place in 42nd position32, a report
that published by Akamai technologies, a cloud services provider headquartered in
Cambridge, Massachusetts, in the United States33.
Concerning about its security, in term of payment online and data encryption, doing e-
commerce activities in Italy are much more secure rather than Indonesia. Besides, its
decent connection, the second or third parties always keep the privacy of information users
such as users credit card numbers or account numbers, therefore the users would not need
to worry of being hacked and getting their cash drained. Another advantage, Italians are
feeling comfortable and safe in opening new account through internet and finding it
convenience in selecting the right insurance which fits with their needs, as the privacy and
security of their information will never leak into public, as a consequence that fact makes
them feeling secure to do that kind of activities, even doing it at home, not to mention, it
saves their precious time as well where they can allocate it to do something else. Not like
Indonesia, Italy already made a few step ahead in term of e-commerce usage. Writer found
that e-commerce application is applied perfectly in this country which famous with its
pizza and spaghetti. Meaning that, e-commerce is utilized and worked properly as its main
objective back then to the first time it was presented worldwide. E-commerce should be a
tool to help human being in order to ease them doing trading activities in distant instead of
performing it in a traditional way. So, buyers who want to get a lower rate whether they
want to book airlines, trains or buses tickets, they can search it through internet/e-
commerce service and make the booking, wherein this kind of condition does not apply
properly in Indonesia, as the fares are somehow always equal whether purchasers buy the
ticket online or pay at the counter.
Another benefit can be resulted for agro-food SME in Italy who want to introduce
internationally especially Italian wines. As a matter of fact, e-commerce become an
integral part for Italian winery product to be presented globally, as Italian wines often
positioned in premium segments just like French winery. Although wine industry is still a
non – core IT industry, however, the benefits from internet and e-commerce aids, it is
likely projected to emerge in the future (Begalli et al., 2009). Again, this kind of web
marketing strategy has not still existed yet in Indonesia.
Italian enterprises really know well how to use e-commerce media for doing business
across countries as they need to expand their wings not only in local but also in
32 http://en.wikipedia.org/wiki/List_of_countries_by_Internet_connection_speeds33 http://en.wikipedia.org/wiki/Akamai_Technologies
84
international scale. On the other hand, most of Indonesian enterprises still cannot
maximizing the e-commerce media utilization, as they seldom to update their own
websites, prefer using phone or fax instead of internet, and the target markets mostly are
not capable in using information technology and most of them are the old school style
generation.
At this point, because of Italian e-commerce easy access due to its low technological
barriers, low costs, and social push, Italy has created an important opportunity of further
development in Italian e-commerce itself, it also aims at improving the relationship with
the market whether local or international and at the end discovering further chances in new
markets. Nonetheless, the benefits of e-commerce that Indonesian people enjoy in these
days (as mentioned before), back then Italy may have experienced it, not to mention, all
kind of improvement, update, and breakthrough from Italians information technology are
aimed to help them saving their time doing activities which can be done remotely and it is
worked perfectly.
3.3 E-commerce contribution toward retail sales in Indonesia and Italy
As a country with 6.5% of e-commerce users out of the internet population and with $ 256
average annual e-commerce spend per e-commerce user, while a single transaction basket
size online was only about $55 and the average basket size is about $30-50 (which is not
bad compared to the average basket size of a UK fashion retailer at $94)34, nonetheless, the
e-commerce market size in Indonesia was only $0.9 billion in 2011 based on survey which
conducted by Veritrans and Dailysocial (2012). That percentage was only 0.7% of total
retail sales, in numbers is around $134 billion. Still from the same source, those two IT
companies broke down a top – down analysis of Indonesian e-commerce market. They
estimated that the estimate average market size in Indonesia was around $0.6 - $1.2 billion.
Below is an abstract how Veritrans and Dailysocial did a calculation in order to obtain total
e-commerce revenue, both in IDR billion and $US million, as well as the percentage of
total retail sales that Indonesia has achieved in 2011.
34 http://www.convergencevc.com/indonesia-the-e-commerce-state-of-mind/#_ftn1
85
Figure 3.1
Assumptions & Calculations of Total E-commerce Revenue in Indonesia
On a sidenote, Euromonitor35 indicated that consumer electronics remain the largest e-
commerce category, but apparel and footwear remain the strongest growing sector thanks
to an increasing number of fashion e-tailers and their intensive promotional efforts.
However, according to Vela Asia36 research team which published combined information
from sources like eMarketer37 and the Association of Indonesian Internet Providers38 was
estimating that Indonesian e-commerce market will be growing each year where the
Indonesia’s growth story is built on a number of factors: 20 percent year on year increases
in internet users, rapidly growing discretionary spending among the middle class, and the
entry of a number of high profile e-commerce players within the last 12 to 18 months39.
It was forecasted that in 2012, Indonesia’s e-commerce market will be four times bigger
than 2011, and by 2013 it will double from the previous year, which is unusual growth
35 http://www.euromonitor.com/ 36 http://paraplougroup.com/about-paraplougroup/37 http://www.emarketer.com/ 38 http://www.apjii.or.id/v2/ 39 http://e27.co/indonesian-e-commerce-market-size-to-double-in-2013-to-us-8b/
86
rates in term of e-commerce especially for rapid developing countries. Not to mention, the
growth of the e-commerce market is also followed by the growth of online shoppers and
online shopping transaction baskets which is expecting to increase every year. The outlook
for Indonesian e-commerce is bullish as several key indicators remain favorable:
Internet penetration and smartphone sales continue to drive more people from across
the nation to access online retailers, especially with the expected establishment of
Indonesia Broadband project. Rakuten and Zalora already claimed that in 2014, 70% of
their orders come from rural areas.
Continued evolution of essential supporting infrastructure for e-commerce such as
logistics and payments. The establishment of aCommerce and UITOX as top e-
commerce players in regional area is followed by another local player such as JNE and
Tiki.
High investor confidence translating to healthy valuation trajectory for existing funding
rounds. If the market continues to believe in technology startups and can justify
valuation multiples, there is a good supply of capital to continue growth40.
Illustration of e-commerce growth rates can be viewed in below figure.
40 http://www.convergencevc.com/indonesia-the-e-commerce-state-of-mind/
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Chart 3.20
Indonesian E-commerce Market Size forecast by 2012 – 2016
Indonesia, a country with estimate over 252 million people and GDP (nominal) per capita
estimate $US 3,511 in 2015, is “on a roll”41. While the global media continue to track
every blip and dip in the familiar of well-known powerhouse economies such as China,
India, Brazil, Germany, and the U.S., they have largely overlooked the momentum in
Indonesia, whose economy is forecast to grow by an annual average of 6.4 percent between
2010 and 2020—faster than any other nations that have begun to attract attention, such as
Turkey and Brazil (Accenture, 2012).
Consumer spending accounts for 55 percent of Indonesia’s economy—far above the 38
percent figure for China and higher than in many other emerging markets. According to
Oxford Economics, consumer spending is likely to parallel overall growth in gross
41 http://en.wikipedia.org/wiki/Indonesia
88
domestic product (GDP) over the next eight years, outstripping consumers’ influence in
Malaysia, Brazil, Turkey, and Russia. The boost in retail activity will be impressive: in
eight years’ time, Indonesia will have as many households with disposable income
exceeding US$50,000 as there are in China today. Looking only at what we define as the
“mass-consuming class”—those households with incomes between $5,000 and $30,000 a
year—Indonesia is likely will have more of them by 2020 than those in the combined
equivalent groups in Germany, France, the U.K., and in the Netherlands (Accenture).
Between January to March 2014, Indonesia’s capital, Jakarta, contributed 2.4% of the
global total of 10.6 billion Twitter posts, making it the city generating the most tweets in
the world. A Google study on Understanding the Mobile Consumer in 2013 also supports
that Indonesians are frequent social media users, with 97% visiting social networks and
79% doing so least once a day via their smartphones. Its highly active online social
community has gained the city its nickname, “social media capital of the world.” The
country's most popular social media platforms are Facebook, Twitter and Google Plus. In
early 2013, Indonesia was ranked first worldwide in terms of growth of account owners for
twitter. As of 2014, it has 69 million active Facebook users, making it the fourth largest
user in the world. It also had 36% of its population on Google Plus and is also the second
largest user of mobile messaging app Line as of September 2014, with 30 million active
users. With 26.4% of online transactions occurring on social media platforms in 2014, it is
evident that this high level of social media activity represents a huge opportunity for global
and regional brands to engage with their customer base and ultimately drive sales in the
social space. Businesses are recognizing Indonesian's affinity for social media and are
using the opportunity to connect with existing and potential customers. There is an
increasing number of accounts on social media being created purely to sell products. The
emergence of local startups like Lakubgt and Onigi, which assist businesses to sell on these
social platforms, is another indicator that Indonesia's social commerce sector is growing.
Social media is also a great platform for businesses to address customer concerns in a
timely and personal way. An active and engaging online social presence is the key for
online success in Indonesia. Rank of social media from most favor until less favor can be
seen in below figure
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Figure 3.2
Rank of Most Popular Social Media Platforms in Indonesia
So who is Indonesian shopper? According to a survey by MarkPlus42, the number of
Indonesian internet users grew steadily from 42.2 million to 74.6 million from 2010 to
2013. Netizens, who can be defined as users who spend more than three hours per day
online, its number have also grown during the same time period from less than 20% to
more than 40%. The survey also revealed that almost half of these netizens were under the
age of 30 years, while those above the age of 45 years made up 16.7% of netizens in the
country. Most netizens access the web via smartphones (86%) and spend between IDR
50,000 ($US 5) and IDR 100,000 ($US 10) every month for internet access.
Below is the timeline of netizens growth in Indonesia from 2010 to 2013 based on survey
conduct by Tech in Asia43.
42 http://www.markplusinsight.com/43 https://www.techinasia.com/
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Chart 3.21
A growth of Netizens in Indonesia from 2010 to 2013
In 2013, there were 4.6 million Indonesians shopping online. This is expected to increase
to 8.7 million people by 2016. However, a survey conducted by eMarketer demonstrates
that every year a gradient of growth in number of online shoppers in Indonesia as shows in
bar chart below.Chart 3.22
Growth in Number of Online Shoppers in Indonesia from 2013 to 2016
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Indonesian are very social creatures and show strong preference for shopping on social
channels. On messenger groups such as Blackberry Messenger and LINE, consumers find
that they can directly converse with retailers. Other social platforms include online forums
like Kaskus and Tokobagus, where consumers can share their purchases and product
reviews.
Chart 3.23
Percentage of Preferred E-commerce Channels or Platforms for Online Shopping
In 2012, a single transaction’s average basket size was USD $55, with online shoppers
spending an average of USD $256 over the year. With personal spending levels rising by
10% annually alongside rising internet adoption rates, it is clear that online transactions are
growing steadily. While the number of customers are large, the most successful online sites
are selling products with a value of less than IDR 200,000 (USD $20). Sukamart, an
Indonesian online grocery store, says that its average basket size is IDR 300,000 to IDR
500,000 (USD $30 to $50). This compared to the average basket size of USD $94 on
asos.com, a popular UK fashion retailer.
According to a 2013 McKinsey survey, Indonesians are risk averse and late adopters of
new products and technology, regardless of their social class. This may explain the locals'
affinity towards Cash on Delivery payment methods and their preference for channels like
92
forums and social networking sites, which allow for interaction with sellers and other
customers, so that they can ask questions and receive recommendations before committing
to a purchase. While Indonesians shop across multiple categories, the most popular are
clothing and apparel (67.1%), shoes (20.2%) and bags (20%).
Chart 3.24
Popular Online Product Categories in Indonesia (2013)
Females tend to have a higher purchase rate, with the highest spending on clothing, mobile
devices, travel, laptops and accessories. As we can see from above graph chart, mostly the
top three items are the most items which females likely to purchase in order to fill their
pleasure and satisfaction in terms of shopping which can lift their pride and their level
wherein especially amongst their community. This is likely to be happened in big cities
such as Jakarta as the capital city of Indonesia, Surabaya as the second largest city as well
the capital city of East Java and last but not least Bandung, the third largest city in
Indonesia and also as the capital city of West Java.
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Chart 3.25
Percentage of online shopper based on gender and products categories
Due to the low home internet penetration, another trend seen is that online shopping is
primarily being done during office hours on an employer's internet. Retailers see a daily
peak in online shopping at 11 am, followed by a second rise in the early afternoon as
workers get back online after lunch. For e-commerce, these are key time periods for
targeted promotions and audience engagement. More than a quarter of Indonesian users
spend over 30 hours per week online, which is on par with other Asian countries such as
Malaysia and the Philippines but less than Singapore and Vietnam (Singapore Post
Limited, 2014).
Rapid economic growth in Indonesia has led to increased spending, in 2013, Indonesia’s
total GDP was USD $868.3 billion, following an average growth of 5.9% over 2009 to
2013. Growth is expected to continue at an average of 5.8% until 2020, providing a solid
foundation for new investments in the country and increasing the disposable income of the
growing middle class. Online spending is predicted to increase by 40% in 2014 and 53% in
2015. Majority of Indonesia’s businesses are small and medium businesses, representing
99% of all businesses in operation. The country’s retail sales amounted to USD $411.29
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billion in 2014, of which 0.6% (USD $2.6 billion) are online sales. Forecasts for 2015
indicate that online sales in Indonesia will reach USD $3.56 billion. Even though sales
through online channels will account for only 0.7% of total retail sales, the figures indicate
a significant opportunity. Compared to developed markets like the United States which
have e-commerce percentages closer to 5%, Indonesia’s online marketplace has plenty of
room to grow.
Table 3.21
Comparison between Online Sales and Retail Sales in Indonesia
Despite the capital city initially being the driver of e-commerce growth, both Rakuten and
Zalora say that as of 2014, 70% of their orders come from rural areas. Indonesia’s second-
and third-tier cities are growing fast but many still lack shopping malls, presenting a
largely untouched segment and an opportunity for online companies to reach customers
looking for more convenient shopping solutions where brick-and-mortar stores are not
easily accessible (Singapore Post Limited, 2014).
The rise in mobile phone ownership is a key factor driving the rise in internet adoption
rate. Mobile phone ownership doubled from 12% in March 2012 to 24% in March 2013,
with an estimated 71 million mobile phone users in Indonesia by 2015 and 16.2 million
tablet users by 2017. With users spending an average of 181 minutes on their smartphones
every day, the most amount of time in the world, there is a huge opportunity for mobile
commerce in the country. While fixed broadband internet is currently only in 1.6% of total
households, affordable mobile internet plans has allowed a whole generation of internet
users to leapfrog desktop technology and move straight to mobile devices.
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According to Google's 2013 survey on mobile consumers, smartphones are emerging as a
significant point purchase amongst Indonesians. 95% have researched a product or service
on their phone while 57% have made an actual purchase via smartphone, 64% doing so at
least once a month. In 2013, Indonesians spent USD 8.5 million in mobile commerce. In
addition to driving up numbers of online purchase, research which starts on smartphones
also lead to purchases across channels, 64% of shoppers who start the buying journey on
mobile go on to buy via computer and 68% go on to buy in-store.
Regarding of a growing middle class, Indonesia is also urbanizing at an extremely fast rate
with 71% of the total population, or 209 million people, predicted to move to urban areas
by 2030. The overall rise in disposable income will also see an estimated 90 million
Indonesians becoming part of the consuming class by 2030.
According to the Yayasan Indonesia Forum, Indonesia is also on the path to becoming a
high income country by that year with expectations for high levels of industrialization,
more advanced technology and growth in the service sector. These factors, along with the
growing sophistication of customers and their openness to other forms of retail, will
significantly contribute to even greater e-commerce rates as spending power increases
(Singapore Post Limited, 2014).
The expanding middle class has resulted in increasing urbanization and higher levels of car
ownership. According to a Wharton report in 2011, Indonesia’s car sales reached almost
900,000 units, making it the number one car market in Southeast Asia for that year. While
this is indicative of an increasingly wealthy nation, it has also contributed to transport
issues. Congestion continues to remain a challenge for the bustling cities of Indonesia. As
such, people are continuously looking for more convenient ways to shop. Online shopping
has therefore become increasingly popular as shoppers can make their purchases from the
comfort of their offices and homes while avoiding traffic.
To address the infrastructural challenges present, companies like fashion retailer Zalora
and sukamart.com, a grocery retailer owned by Japanese trading house Sumitomo, have set
up their own delivery services in greater Jakarta, one of the world’s biggest and busiest
metropolitan areas.
The key e-commerce site in Indonesia in 2014 was Lazada Indonesia from Rocket Internet
who made the jump to the top spot in 2014. This comes after their rebranding in 2014 that
showed a shift of focus away from consumer electronics to a larger range of lifestyle
products. Lazada is also better at serving the local market with native language marketing
campaigns, same day delivery and a variety of custom payment revenue. Zalora, from
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Rocket Internet’s fashion venture, is another big player in the local market, operating in ten
countries throughout Asia Pacific, their Indonesian store accounts for the largest share of
revenue across the group.
Tapping on the potential of Indonesia, Japan also entered the market with Rakuten Belanja
Online, a standalone subsidiary of the Japanese giant Rakuten operating locally. In a
culture with such distinct characteristics and low levels of risk-taking, a localized strategy
such as adding an Indonesian word Belanja (which means expenditure) to a company name
increases approachability and trust.
Kaskus is the leader of online forums in Indonesia. As of May 2014, it is reported to have
over 6.8 million registered users that create 4,000 new threads every day. The site also sees
more than 750 million page views and 25 million unique visitors every month. A visitor
typically spends about 29 minutes on the site every day. Kaskus’s biggest competitor is
OLX, formerly known as TokoBagus. It is the largest e-commerce platform and
Indonesia’s third largest local website.
Of special mention is the consumer-to-consumer (C2C) marketplace Tokopedia. Claiming
to be the biggest e-commerce site in Indonesia, they are drawing ten million monthly
visitors with shoppers buying a total average of two million products a month in 2014.
From the businesses already present, it is clear there is a local audience ready for e-
commerce, even if it is still in the early stages of development.
In terms of B2C e-commerce sales in Indonesia itself, statista reported that it will hike
moderately from time to time. Below timeline shows the B2C e-commerce sales figures in
Indonesia from 2010 to 2012. A forecast is also shown for years 2013 to 2016, in billion
US dollars. B2C e-commerce sales in Indonesia amounted to 1.04 billion US dollars in
2012 and are expected to grow to 4.49 billion US dollars by 201644.
44 http://www.statista.com/statistics/280925/b2c-e-commerce-sales-in-indonesia/
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Chart 3.26
Timeline of B2C E-Commerce in Indonesia from 2011 to 2016 (in billion USD)
While the annual B2C e-commerce sales growth, Statista found that there was a significant
decline in 2014 respect to 2013, and forecasted it will keep continue to drop gradually until
2017. Below timeline shows the year-on-year B2C e-commerce sales growth rates in
Indonesia from 2012 to 2013, with a forecast for the years 2014 to 201745.
The forecast shows a steep drop until 2017 in e-commerce sales growth, which is an alarm
for Indonesian government to take a preventive action to break statista’s forecast that it
would not be happened until that year.
45 http://www.statista.com/statistics/261334/b2c-e-commerce-sales-growth-in-indonesia/
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Chart 3.27
Indonesian Annual B2C E-commerce sales growth from 2012 to 2017
The e-commerce sales in Italy instead, according to Casaleggio Associati (2014) the value
of e-commerce sales in 2013 was estimated at 22.3 billion euros, an increase of 6% on
2012. The trend is still positive then, despite the general decline in consumption especially
evident in some sectors. For the first time since 2005 the growth rate of e-commerce is not
in double figures: stops at a value lower than that reported in 2012 and even more reduced
than in previous years.
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Chart 3.28
Increase of E-commerce Sales in Italy based on Amount (€) and % of Increment
As we can see from above figure, both variation percentage of e-commerce and e-
commerce turnover are increasing year by year. Although crisis might affect consumption
of Italian people, despite that fact, above graphic shows that trading activity using e-
commerce is getting favorable and gives an impact to boost national sales as well.
Given below are the exact amounts of e-commerce sales in Italy as well as its increment on
yearly based.
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Table 3.22
E-commerce Sales Data based on amount (€) and % Increment from 2004 -2013
YEAR AMOUNT (€) % INCREMENT
2004 € 1,645,683,000
2005 € 2,123,495,000 + 29%
2006 € 3,286,223,000 + 55%
2007 € 4,868,336,000 + 48%
2008 € 6,364,907,000 + 31%
2009 € 10,037,544,000 + 58%
2010 € 14,357,589,000 + 43%
2011 € 18,970,504,000 + 32%
2012 € 21,154,120,000 + 12%
2013 € 22,337,275,000 + 6%
Source: Casaleggio Associati, 2014.
As it has been mentioned in table 3.5, the distribution of e-commerce sales is dominated by
two mature sector industries, leisure and tourism, however, it undergoes a slight decrease
in percentage terms, due to the reduction in consumption in the segment of online gaming
respect to previous years. Online shopping malls instead, becomes a growing sector,
which includes Amazon, ebay and other big players such like zalando, privalia etc. The
competition of the latter has eroded, in fact, the turnover of the other operators especially
in the publishing, consumer products and health and beauty. Below figure depicts the
distribution of e-commerce sales in Italy in year 2013.
According to the latest estimates of E-commerce Foundation, worldwide total sales of
goods and services online will be valued about 2.1 trillion dollars by the end of 2015, or
5% of the total retail sales. Analyzing only Europe, it is forecasted that in year 2015 the
estimation will be 470 billion Euros from the total turnover of goods and services which
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purchased from e-commerce channel, with a preponderance of 54% of products compared
with 46% of services.
The European countries that rely more on e-commerce and generating more revenues are:
England 122 billion euro, Germany with 70 billion euro and France with 56.8 billion euro.
Chart 3.29
The Distribution of Italian E-commerce Sales from 2006-2014
According to netcomm46, the increase about 2 billion Euros, due to the 70% to the sale of
products, while 30% come from services. Among the product segments stand out clothing
and computing and consumer electronics, which contribute to the overall growth with
about 350 million euro from those two sectors. From services still emerges tourism sector,
which is due to a quarter of the total growth, while remaining substantially stable other
sectors (insurance, telephone recharges, tickets for events and services sold through the
sites of couponing). The value of the Italian market e-commerce (consumer purchases from
Italian sites and foreign) amounted to 14.6 billion Euros and up 16% compared to 2013
brings the penetration of online to over 3.5% of total retail sales.
46 http://www.consorzionetcomm.it/
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Increase considerably the penetration rate of the compartments and informatics consumer
electronics (7.5 to 10.5%), publishing (4-7%) and clothing (the 2.9 to almost 4%), thanks
to sales growth of respectively 31, 34 and 25%. In services, the average penetration
remains at around 8%, with no significant changes compared to 2013. In 2014, it is a start
of a relevant contributions from some areas, less significant compared to the past, but with
a great potential online. At the first place from the Food & Wine 'gourmet' sector, which in
2014 is worth over 200 million Euros, an increase of 30%, then there is the furniture,
which is worth over 130 million Euros, an increase of 100%, lastly the perfumery and
cosmetics in 2014 reached € 40 million, up 25%. Still from the same year, grocery (defined
as spending by supermarket) takes a step forward. The total market grew by 18% and
reached 160 million euro, for an impact on total retail sales still negligible (0.1%).
The result of these dynamics in 2014 is an increase in weight of the total e-commerce 40-
45%, an important step towards equality with services, waiting at this point for 2015. The
basket of Italian e-commerce however, is conforming slowly to be seen in major foreign
markets, where the product segments have a higher portion rather than services, ranging
from 65% of the UK and US, approximately 75% of France and Germany up to 80% of
China and South Korea47.
The economic crisis and the general decline in consumer spending in Italy have prompted
many owners of traditional shops which doing retail activity, using the Internet to promote
product and especially for selling online. Integrating physic shops with e-commerce can
reduce or eliminate the amount of unsold goods, thanks to the expansion of the customer
base. The promotion activity on the web, also, through the website and any advertising
activities, allows them to intercept the demand and grow the business. In 2013 the number
of activations of new e-commerce, with relative activation of the management platform of
online payments, was the highest in the last ten years, although many are still struggling to
get good returns in terms of performance (Casaleggio Associati, 2014).
Manufacturing companies are evolving to cope a change that put into a work which not
only towards the distributors, but traditionally managed the sale of products to consumers
and played an intermediary role communicative. Today manufacturers communicate and
sell directly to end users through their own website. This new model requires
manufacturers to adopt the organizational structure and technological tools and
publications to promote the brand and products to consumers. This implies the inclusion of 47 https://s3.amazonaws.com/iprs/files/attachments/201410/3b643e75-6f89-42b7-8c69-
7832e412037e__O.pdf
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personnel with specific skills, or, alternatively, the outsourcing of service in consulting and
specialized agencies in the digital environment. For instance, the campaign "Where Real
Beauty Sketches", promoted with the tag #WeAreBeautiful, which launched with a video
subtitled in 25 languages and a dedicated website. The campaign message, "You are more
beautiful than you think", has sparked an emotional involvement which helped by
spreading it virally: only in the first month of the video have been viewed over 114 million
times and have received more than 5 million of shares. The estimate of sales growth due to
the campaign is between 6% and 20%, with an estimated profit of more than $ 500 million.
Activation of online sales has prompted some manufacturers to experience how innovative
sales that allow differentiation from traditional distribution: Lancôme, for example, has
launched in the US, a service called "Auto replenish service", with which the customer can
request a periodic sending of products that they normally use.
In 2011, 21,682 Italian foreign affiliates operated in more than 161 countries. These
enterprises employed 1.7 million persons, and generated a turnover of 510 billion euros.
The economic relevance of these enterprises, as compared to resident businesses, was equal
to 15.0% of turnover, and 20.8% of turnover excluding the purchase of goods and services
(this latter variable represents a rough proxy for value added). Italian foreign affiliates in
manufacturing account for almost 6,500 enterprises, representing slightly more than a half
of Italian affiliates active in non-financial services. However, their relevance as compared
to resident businesses is more remarkable than non-financial services.
The industrial sectors, where the activity carried out abroad by multi-national enterprises is
more significant, are manufacture of motor vehicles, trailers and semi-trailers (260 units,
more than 148 thousand persons employed, 74.1 billion euros in turnover, of which 21.6
excluding the purchase of goods and services) manufacture of machinery and equipment
(1,167 Italian foreign affiliates with about 121 thousand persons employed, and with 31.9
billion euros of turnover, of which 6.9 billion net of goods and services purchase),
manufacture of textiles and textile products (596 enterprises, with more than 86 thousand
persons employed, 5.2 billion turnover, of which 1.8 excluding the purchase of goods and
services). Industrial activities carried out abroad are more remarkable in Brazil (97
thousands employed by Italian affiliates), United States (94 thousands), Romania (86
thousands persons) and China (72 thousands), while services activities carried out abroad
by MNEs are mainly located in the United States (104 thousands) and Germany (73
thousands). Goods and services exported in other countries (including Italy) by Italian-
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controlled enterprises resident abroad and active in industrial sectors account for more than
34.5% of their turnover.
The share of exported turnover to Italy in the Made in Italy sector is relevant: manufacture
of textiles and textile products (58.-2%), manufacture of wearing apparel (39.0%),
manufacture of furniture and other manufacturing (37.5%). In 2013, the e-commerce
turnover of Italian companies generated in abroad was on average 29% of total online sales
wherein Italian companies which played in international market are able to maintain
profitability indication of positive values by made investments that allow them to generate
more revenue in the coming years.
In particular, companies that have already invested to expand abroad and now have an e-
commerce site in multiple language, they found a higher incidence of exports to total sales
(41% on average). For companies, on the contrary, have not yet implemented a strategy of
internationalization, and cater to the overseas market with the only Italian-language site,
the weight of foreign sales stops at 8% of the total. Italian companies still have a limited
presence in the international market: 43% of the only operate exclusively in Italy. The
remaining 57% is active in the international arena with different strategies and operational
procedures. Companies that directly manage the sale in abroad are 40%. The prevailing
mode is the online presence with a multilingual site, adopted by 22% of companies, while
14% sell exclusively through the site in Italian. 4% have subsidiaries or operating facilities
abroad. 17% work internationally as it is part of a multinational group. The presence of a
large number of merchants that will appeal to the foreign market only with its Italian site
also come from smaller firms, in order to expand their business across the border in order
to maintain sufficient profitability.
The growth of the percentage of multinational companies (compared to 9% in 2013) is a
sign of the increasingly strong presence of international players in the Italian market and
the increasing competitiveness globally. Europe is the most important international market
for e-commerce Italian companies. The two countries where Italian companies are present
to a greater extent are France (65% of the sample) and Germany (55%), countries where
the e-commerce market is consolidated and export facilitated by the common currency.
The sale abroad is also directed towards Switzerland (49%), Great Britain (47%) and Spain
(41%). 27% of Italian companies export their products to the countries of Northern Europe.
Exports to markets outside Europe mainly concern the United States, where 31% of
companies are very or fairly, and to a lesser extent Russia, where 20% of active companies.
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Italian companies have a limited presence in Asian markets such as Japan, China and
others in Latin America and in Africa.
Figure 3.3
Growth of Mobile Commerce in Italia from 2012 to 2015
An e-commerce access through smartphones or tablet PCs, it is so-called mobile
commerce. The year 2014 in Italy, in fact was closed with a sales growth of smartphones at
an altitude of 1,087 million euro, while the estimation for 2015, it is predicted that there
will be a further growth of 68% that will bring the channel close to 2 billion euro.
According to the Osservatorio e-commerce B2c Netcomm in Italy, the country will
continue to pace the growth of e-commerce: after getting a 16% increase in 2014, the e-
commerce for 2015 is expecting a further increase of 15% which can give the market to
exceed the number for more than 15 billion euro. In particular, the full swing from mobile
commerce channel shows that Italians seem more and more appreciate to use: the purchase
via smartphones is growing, in fact, from 78% increase in 2014 and it is forecasted to reach
a further increase of 68% in 2015, with a value tripled in two years, by an increment of
total from 610 million in 2013 to 1.8 billion euro in 201548.
48 http://www.webnews.it/2015/04/21/ecommerce-boom-vendite-smartphone/
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Following the total sales, B2C sales from 2012 to 2017 (in billion USD) shows a gradual
increase. Statista denounced a report in 2012 to 2014, Italy has made a growth despite
crisis recession situation while from 2015 until 2017 Statista forecasted that this country
still gaining growth in its B2C e-commerce sales49.
Chart 3.30
Timeline of B2C E-commerce sales in Italy from 2012 to 2017 (in billion USD)
On the contrary, the annual B2C e-commerce sales growth shows a declining trend, equal
with Indonesia. However, it is reported that Italy can keep of B2C e-commerce sales
growth to not to drop sharply as Indonesia although in 2017 Statista predicted that there
will be a pretty taper declining for 2% respect to previous year.
49 http://www.statista.com/statistics/239068/b2c-e-commerce-sales-in-italy/
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Chart 3.31
Italian Annual B2C E-commerce sales growth in Italy from 2012 to 2017
Multichannel and optimization from mobile shopping experience is now a prerequisite to
pursue growth and allow web shopper to use different devices depending on the context
and the opportunity to purchase.
Investing on mobile implies the creation of services and features dedicated and designed
specifically for users who use this channel, and allows us to develop supply and
communication in different ways at different points of the buying process. The spread of
smartphones and tablets in Italy is high: 22 million Italians access the Internet from their
smartphone and tablet from 6.9 million, and these numbers are rapidly increased. The
number of people connecting from moving to sites retail grew up in Italy by more than
60% over the last year with a user's smartphone of 6 that visited by the mobile sites or
applications online retail. Also a holder of smartphone on 6 concluded a purchase with
their device mobile. It is therefore essential to be able to handle the incoming mobile
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traffic, to facilitate the completion of the purchase. A non-optimized site will bring the user
to abandon the process. App development is particularly useful to strengthen brand loyalty,
for example through digitization projects and integration of loyalty cards. Mobile
applications, in fact, are more frequently used by loyal customers: 78% of app users are
return visitors, compared to 40% on sites mobile. According to Audiweb, apps are also
effective in carrying promotional initiatives dedicated to mobile users.
The digitization of the store integrates with the mobile services where the customer can
access from their smartphone or through devices installed in the shop. Examples include
the ability to do a scan of the barcode of products to display information relative in
composition, characteristics, mode of use, tutorials available online, or provide the points
for promotion and sharing on social networks. The app Diesel through barcode scanning
product allows the customer to keep track of items and generates like on Facebook. The
app for iPad Nordstrom allows you to search other sizes or color versions of the boss that
you are testing, and share it online in real time. The app Nieman Marcus saves the favorite
products during the visit in the store, and tracks their future purchases, integrating the
shopping experience online and off line. Moreover, the same app connects the customer to
the staff of the store, who can access its profile: preferences, characteristics, purchase
history, improving the efficiency of the store.
The development of a mobile version of the website and the webshop are essential for
companies who want to exploit this channel in terms of traffic and sales. The mobile site
can be realized ad hoc, or, as more often happens, with the adoption of a design responsive
for its own web site. This solution allows them to view the website and effectively navigate
the content, since the layout is automatically adjusted to the size of the screen used.
The next step in mobile strategy, which optimizes the technology investment made and
maximize returns, is to launch services and specific initiatives for mobile.
60% of companies believe that the development of a mobile version of the site is the main
objective to grow on this channel. Following, in terms of importance, the development of
apps for smartphones (32%), the launch of promotional activities and advertising specific
to the mobile (30%), app development for tablets (22%), and other activities (9 %). 13% of
companies did not indicate any specific priority for the mobile strategy. It is really
necessary to improve the mobile channel to enhance the usage of e-commerce from mobile
devices where Italians tend to access e-commerce from their smartphone and there was
100% increase during year 2014.
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Chart 3.32
Priority of Mobile Channel Activities in Italy
A study from Idealo In term of social media, over two-thirds of Italian Internet users are
active on sharing platforms with a social penetration in Italy by 42%, higher than the
European average (40%). Facebook ranked first among the most popular social platforms
on e-commerce sites. Companies are wishing to position themselves to be effectively and
easily found in search engines and they also want to increase their own online business
wherein they no longer cannot ignore the social networks and the opportunities offered by
a multi-channel. Over two-thirds of Italian Internet users are active on sharing platforms
with a social penetration in Italy by 42%, higher than the European average (40%). For
online retailers, they are determined to advantage the social media as the key of e-
commerce where it can give a very promising result. By waiting convincing formulas in
social e-commerce or direct sales from the timeline of Facebook, Twitter, Pinterest, while
come to think of it, the recent agreement between Twitter and Amazon - the community
represent an extraordinary channel to reach customers and develop effective advertising
campaigns which can attract the traffic to their web-shop, increase leads and brand
awareness. In addition to the role of social media during presale, through social platforms
from many sites also offer interesting interaction formulas between after-sales and
customer support. As part of this international comparison, Facebook is positioned in every
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country in first place among the most popular social platforms on e-commerce sites. The
only exception is British stores, where Twitter is a slight advantage over Facebook. A
surprising fact that the microblogging platform is used by retailers in the UK overall less
(74%) than is the case in the case of retailers German and Spanish (80%) which, as for the
use of Facebook and Twitter, are awarded tied for first place in the context of this
European comparison.
Figure 3.4
Percentage of Social Media Usage as an Effective E-commerce Media in Europe
In last place among the social networks used by online retailers is, in all the countries
considered, the platform sharing photos / videos Instagram. Only in Britain blogs are used
less frequently (28%) toward Instagram (30%). Poland (Instagram and LinkedIn: 4%) and
Italy (Instagram and Blog: 10%) at least this channel is not alone in last place. Poland is
also the only country among those surveyed here, where Google+ (40%) is used by the
merchant more than Twitter (30%). In Italy, Google+ and Twitter are used by the shop to
the same extent (60%). The same thing also goes for Germany (80%).
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Chart 3.33
Comparison of Preferred Social Media Usages as an Effective Way of E-commerce
Platform in Some Countries in Europe
In Italy, Facebook (84%), Twitter (60%) and Google+ (60%) lead the rank of the most
used social media in e-commerce. Followed by the video sharing platform YouTube,
where only 28% of e-shop partners where mainly for the dissemination of advertisements
or video tutorials about products and services. Only 10% of Italian retailers surveyed aims
at the creation of thematic blogs for their online store - as a strategic communication
instrument for the growth of online commerce. The most common type is the B2C blog, a
format designed to provide customers with information on products and manufacturers,
reviews and news about the company, and the B2B blog, along with information and news
for producers or traders (especially in the case of online marketplaces). The 20% of Italian
shops using the social network for professional contacts such as LinkedIn for the purpose
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of e-recruiting and HR. When it comes to distribution of images, even the Italians shops
prefer Pinterest (26%) than Instagram (10%) - a fact that certainly depends on the
particular vocation of the two platforms. The creation and sharing platform of a thematic
board are provided in Pinterest, a particular social network which created the products of
companies and can organize a better visual content strategy. From the point of view of
content shared on Instagram, it will makes us realize that the platform is mainly used by its
members to file or record personal events in here pictures. For e-commerce, however, even
this channel can be interesting - for example in order to tell their stories in an informal and
friendly ways to the customers. In general, the unexplored potential of the Italian shop in
most of the observed channels is still considerable. In the present study, retailers Italians
and Poland are not positioned in first place in the use of any social network. Particularly
interesting in this regard reveals from survey released by WeAreSocial in reference of a
social media usage by the companies in Italy, especially speaking of the hours spent online,
and access to social media via the mobile. From the report it is said that Italians spend only
two hours every day well on social platforms, half an hour longer than the European
average. One thing that definitely gives a reflection of merchants and Italian SMEs are still
timid and hesitant to utilize these channels. The use of social media for e-commerce
purpose among Italians is still marginal or limited to the most popular, but some online
retailers may be willing to test emerging platforms and did some little test from the other
platforms such as as EyeEm, Vimeo or Tumblr. Even Instagram - a very popular social
network users (4 million members in Italy), but not the most favored one among online
businesses - has great potential (still) almost no advantage from the Italian merchant, at
least if we think there was a social network which grew more in Italy in the last six months
(let say + 25%) and is currently used by 1 user on mobile internet out of 450.
3.4 Factors which hinder the adoption of e-commerce to advance in Indonesia and Italy
Kurnia (2006/7) stated that the low Internet penetration in Indonesia is caused by the low
transmission speed capacity since most of the connections within the country use copper
wires. Only major cities have fiber optic connections, but the ‘last mile’ connections are
still through copper wires. The transmission speed in some cities is limited to 19,200 kbps,
but most areas have the transmission speed of only 9,800 kbps. At the moment it is
difficult for ISPs to increase the bandwidth because of the limited number of subscribers
50 http://www.crmwebnews.it/social-media-e-e-commerce-in-europa-uno-studio-comparativo/
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and the volatile Rupiah/US Dollar exchange rate since ISPs pay the connection to the
Internet backbone in US dollars, while the subscribers pay in Rupiah (Indonesian
currency). In consequence, many worldwide e-commerce leaders company such as
Amazon.com or Barnes and Noble still reluctant to invest or establish their office as well
as create a local domain site in Indonesia. Not to mention Paypal as a company that
provides third party payment service, as it is very risky to establish a website that related to
payment with such a poor connection.
As a response to the relatively high cost of having personal connections, public Internet
access has been introduced through the establishment of public Internet kiosks or Internet
cafes, which are known as "Warung" Internet (Warnet). The Internet cafes are cheaper than
a personal connection and provide a solution to the lack of the necessary infrastructure at
home or at work (Minges 2002). In terms of e-business readiness, like other developing
countries, Indonesia is still at the low end, because of a lack of IT infrastructure especially
among individual household and small to medium sized enterprises. Generally, there is still
a low level of PC penetration and the cost of Internet access is high. In addition, there is a
lack of security measures to facilitate online payment, awareness of the potential of e-
business, availability of IT skills and willingness to change business practice (Castle Asia
2002).
Trust is closely related to the desire of consumers conducting transactions with vendors.
The process of obtaining consumer trust plays an important role for the survival of a
system of e-commerce (Hidayanto et al., 2012). Trust is defined as an individual’s or a
trustor’s belief or expectation that another party, namely the trustee, will perform a
particular action (Mayer et al., 1995). The trustors herein are the customers and the trustees
are e-commerce websites. Trust is an important factor in the conditions of uncertainty and
risk. Although many researchers acknowledge that trust is an essential requirement for the
growth of e-commerce, however, the concept of trust in the digital environment is still at
an early stage (Othman et al., 2008). In practice, there is one integral factor in e-commerce
transaction, known as trust. Currently, the level of trust in Indonesian online consumers is
yet to be at the stage of ‘I Trust, I Buy’, but still in stage of “I Click, I Pray”, where
according to Indonesian E-commerce Association (IDEA) concluded trust to be an integral
factor in determining whether a sales transaction can be realized. Such position may
potentially hinder further growth of e-commerce transactions. Consumers desire shopping
online to be very simple; consumers want something that is practical, fast, and safe. It
cannot be denied that trustworthy is the biggest challenge for brands new to the market in
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order to convince the consumer. Compared across the Southeast Asian region, Indonesians
are the least likely to make an online purchase due to their risk averse nature. Indonesians
tend to use the internet mainly for research - 80% go online for price comparisons before
buying in-store, compared to the regional average of 60%51. A 2013 Nielsen survey
revealed that the biggest obstacle to e-commerce was the customers’ fear of fraud, with
34.6% of customers citing this as a reason for not making an online purchase. According to
the survey, six out of ten consumers said they were unwilling to provide credit cards details
online52. Another study by Google in 2013 revealed that customers’ lack of trust in credit
card security on mobile devices was the top reason for not purchasing online via their
smartphones. Data and payment security is therefore a key consideration for businesses to
present themselves as being reliable and trusted online retailers53. Currently, online
transactions are filled with a sense of concern, both in terms of security and the certainty of
goods acquired. There are many assumptions in the Indonesian community that e-
commerce is neither reliable nor secure for transactions. Simply put, e-commerce
transactions are still considered untrustworthy. Selling online also poses the challenge of a
lack of tangibility. 21.5% of consumers were not comfortable making a purchase before
they could touch and feel the quality of the items they were buying. While the average
European fashion website receives customer queries on only 5% of orders, Zalora in
Indonesia receives an average of one phone call or message per order from concerned
customers to confirm if their request has been received, a strong indicator of customers’
concerns with online shopping. Low responses and slow delivery time also affect
utilization of e-commerce in Indonesia. Unreliable customer support, dull design,
complicated system as well as unreasonable price, doubtful quality and little variety also
give a huge impact why users are hesitate to practice e-commerce54.
Therefore, trust in e-commerce website is a very important factor in the customer’s
decision making process to make transactions on the e-commerce websites (Othman et al.,
2008). E-banking as a part of e-commerce is growing very slow in Indonesia. Uncertainty,
security and privacy are the main concerns why e-banking in Indonesia is still lacking
behind its neighbors such as Malaysia or Singapore. Slow and unreliable connection,
illiteracy in using internet plus the culture of Indonesian which prefer conventional style
51 http://www.idea.or.id/berita/detail/21/%22I-Trust,-IBuy%22,-Kamis-Commerce-Volume-II/52 http://www.nielsen.com/us/en/53 http://think.withgoogle.com/mobileplanet/en/graph/?
country=id&category=MOBSHOP&topic=Q50&stat=Q50_02&wave=2013&age=all&gender=all&chart_type=&active=stat
54 http://www.dailysocial.net/post/ecommerce-dan-metode-pembayaran-yang-pas-di-indonesia
115
makes its growth encounters slow pace. Low responsibilities from e-commerce or e-
banking providers make users hesitate to do online transactions which results low sales
penetration from e-commerce itself as we already known in these days in Indonesia.
Regarding of payment method, online payment in Indonesia is considered low, with credit
card penetration at only 4.5%. Businesses must therefore present themselves as being
reliable and trusted online retailers by prioritizing data and payment security. Given
Indonesians’ preference for traditional payment methods, such as Cash on Delivery, e-
commerce businesses entering Indonesia may find payment collections challenging,
especially if they are used to online payment systems. Many newer forms of payment such
as internet banking are not widely used and customers typically choose to make payments
directly through an ATM to a retailer’s account. This also results in consumers often
deciding to simply walk into a brick-and-mortar store and buy a product immediately,
instead of making the final purchase online. In 2013, the e-commerce payment method
breakdown was as follows:
Chart 3.34
Preferred Payment Method in Indonesia in 2013
Low education level compared to other Southeast Asia neighbors in term of education give
a little awareness of the existence of e-commerce which is also a serious problem that
encountered by Indonesian government which remain unresolved until now.
116
Tillquist (1997) asserts that the success of e-commerce across national borders is a
reflection of several variables, including national economies, national literacy, national
cultures, telecommunications availability, and technology penetration and acceptance.
Tillquist's (1997) idea was also supported by a study from Rose and Straub (1998) which
found cultural biases play a role in technology acceptance.
In addition, a study conducted by Cheung and Lee (2001), involving 400 students at the
City University of Hong Kong, showed how culture can affect the notion of trust in e-
commerce along with the consumer's propensity to trust, the vendor/s trustworthiness, and
certain external factors such as the nation's legal framework. The study also concluded that
people with different cultural backgrounds, personality types and developmental
experiences vary in their propensity to trust.
On the other hand, Italy as a highly developed country (Human Development Report,
2014), a fact that cannot be disputed, is a more advanced country in aspect of technology
and culture, but it is also encountering a barrier to boost the usage of e-commerce above of
all to push country’s retail sales compared to Indonesia. As the 4th most populous EU
member state, Italy has the third largest economy in the Eurozone and eighth – largest in
the world55. However, in 2008 Italy was hit by the Great Recession, being severely affected
by it. From 2008 to 2015, the country suffered 42 months of GDP recession. The economic
crisis was one of the main problems where Italy still struggles to find a way out in order to
undertake it. Although Italy is still struggling with economic recession, apparently both e-
commerce activities and e-commerce utilization are growing year by year. According to
Casaleggio Associati (2014), the economic crisis and the general decline in consumer
spending have prompted many owners who own and run traditional stores of retail activity,
using the Internet to promote products and especially for selling online. Integrating the
physic shop with e-commerce can reduce or eliminate the amount of unsold goods, thanks
to the expansion of the customer base. The promotion activity on the web, also, through the
website and any advertising activities, allows them to intercept the demand and grow the
business. In 2013 the number of activations of new e-commerce, with relative activation of
the management platform of online payments, was the highest in the last ten years,
although many are still struggling to get good returns in terms of performance. It can be
seen as well that in order to boost their sales, many owners decrease their budget in media
offline and switch into online media instead where in 2014 the total has been reduced into
55 https://en.wikipedia.org/wiki/Italy#cite_note-UNDP2014-14
117
4%, down from 8% recorded in 2013. The press was allocated 2% of the investment, on
television and on the radio 1%. More and more companies are choosing to spend part of
the budget in the presence of buyer sites and shopping areas, which receive 11% of the
budget (8% in 2013) as well as their investment in social media which was intended 15%
of the budget respect to 13% in 2013. The result of investing in mobile application is also
proven where sales revenue from mobile app increased 3.5% respect to year 2012, thanks
to the increment of 5.5% of additional budget invested through app.
Although there were many increment investment in order to boost sales revenue from all e-
commerce media, economic crisis remains the main problem for some companies to reduce
or furthermore stopping investment in enhancing their online sales. Because of the crisis,
companies also need to change their strategy in order to survive and generating revenue.
Italian companies began to reduce their investment in utilization of email marketing as well
as the SEO (Search Engine Optimization) activity in media. They also lessen the
investment in banner, sponsorship and affiliation program.
Online brand promotion and the development of online presence is still a major problem
for the majority of Italian companies, as they feel that the target awareness is still low.
Gaining trust from online buyers is not easy especially for the newcomers. The average
conversion rate of percentage visits to the online shop site that ends with a purchase is an
average of 1.9% in various sectors, which is very small. The reasons for non-conversion
are primarily economic as Italian people still suffer in economic crisis. Italian companies
indicate in the first place (48%) the price of the product, in particular if this is available at a
lower price from other sellers. Shipping costs (41%) are another important factor: if
perceived as too expensive can cause consumers abandon the purchase. 25% of companies
believe that users fail to complete the purchase process online because they use the site to
search for information as they personal references and from they prefer to buy in the store
after receiving that information or references. 21% is the shipping/delivery times: buyers
want to have the product immediately or at short notice, a requirement that many
merchants still are not able to meet. This lack of trust usually can be found in local postal
system (Doing Business in Italy, 2012), with one of the public companies which called
Posteitaliane. 20% of companies, finally, stated that users have little confidence in the
arrangements for payment and therefore not finalize the purchase. In 2% of cases is the
same website that does not provide online purchase of products. Despite that Italy is well-
known as a highly developed country, most of the people are still feel convenient to do the
traditional way such like going directly to the store, fit or try the items before buying and
118
lastly in terms of paying, apparently they prefer to pay directly as they can control the
payment process and make claim immediately if the staffs make an error. Normally that
kind of occurrence happen for those with age around 45 or above who are lack of IT ability
as well as awareness the advancement of technology in this subject, e-commerce.
Small trust in using credit card and its security concern as a payment method in doing
transaction via e-commerce is also another factor why e-commerce in Italy is lacking
behind other European country like UK, Germany or France. The fact regarding small
portion of payment method using credit card or other payment instrument such as prepaid
card or bank transfer is not surprising as e-commerce security in Italy is not regulated by
specific laws, and companies resort to firewalls, secure protocols and digital certificates,
although Italian legislation recognizes the legal validity of digital signatures and digital
contracts. Italian legislation fully complies with EU consumer protection directives with
regard to specific information that an ecommerce site must provide, and sets rigid privacy
protection requirements for the opening of an e-commerce site (Doing Business in Italy,
2012). At European level, as in Italy, the use of cash remains heavy and continues to grow,
despite the recent increase in the use of electronic instruments, especially credit cards.
However, there are significant differences between countries. For our sample there are two
distinct groups of countries: those with lower use of cash and heavy use of electronic
payments and those with modest electronic and heavy cash payments.
119
Figure 3.5
Italy position among EU countries in term of cash card ratios (percentage values) and
POS transactions (thousands)
Italy still lags considerably behind most European countries in the use of the electronic
payment instruments, gauged by number of transactions per inhabitant (Chart 3.18). Even
by considering only the most developed parts of Italy (the Center and North), the gap with
respect to the European average remains large56.
56 In 2009 the number of non-cash transactions per capita was 65 in Italy and 164 in the EU as a whole; in the Centre-North and in the South of Italy the figures were 76 and 46 respectively.
120
Chart 3.35
Number of transactions by electronic payment instruments per capita among
European countries – Year 2009
The breakdown by payment instrument within each country reveals not only differences
but also similarities in preferences (see Chart 3.35 and Table 3.23). Almost everywhere the
most widely used instruments are cards and credit transfers. Germany, Austria and Spain
are exceptions, with an incidence of direct debits significantly higher than the EU average
(14 per cent). In Denmark, Portugal, Sweden, Spain, Greece, Finland and the UK payment
cards are prevalent (56 per cent on average), while the Eastern European countries are
characterized by greater use of credit transfers (61 per cent). Italy is in the group of "card-
based" countries, with an incidence of 37 per cent in 2009, higher than the average for the
euro area and slightly lower than the average for all the EU countries (respectively 33 and
38 per cent). The possible factors in these discrepancies are numerous: level of economic
development, education, relative size of the informal economy, level and nature of
121
entrepreneurial activity, degree of banking presence, diffusion of ATMs and POS
terminals, and fragmentation of commercial distribution, among others. Understanding
how they influence payment preferences can provide useful indications on the reasons why
Italy, and certain regions within Italy, lag behind in cashless payment instruments.
Chart 3.36
A comparison regarding of relative importance of payment instruments between Euro area
and other EU countries
122
Table 3.23
List of payment instrument based on relative importance in EU and Euro area
Italy’s relative backwardness may be due to differences in income concentration.
Compared to the other main European countries with above-average per capita GDP, the
negative relationship between the electronic transactions and income concentration, which
corresponds to the findings of a number of empirical studies, is more pronounced in Italy.
But income concentration cannot entirely explain Italy’s backwardness in the use of
electronic instruments: Spain and the UK, for instance, have both greater income
concentration and more transactions in innovative instruments than Italy (figure 3.6).
123
Figure 3.6
Income concentration and use of electronic payment instruments
According to Ardizzi and Iachini (2013) another disadvantage will be from the regional
disparities in number of electronic payments per capita in Italy are still large, where nearly
as great as the international disparities (figure 3.7) where likely become a factor that
hamper the adoption of e-commerce in this country. Possibly the habits and unsupported
infrastructures are also the reasons behind the lag of e-commerce adoption.
124
Chart 3.37
Number of electronic payments per capita at regional level in Italy
Following the cloud usage (ISTAT, 2014) instead, although 40.5% of users did not find
any problem while using storage space on the Internet or services to share files, the speed
of access to these platforms is a critical element: in fact, the 38.9% of individuals aged 6
and over who used the Internet in the 3 months prior to the interview to save or share
documents, images or other files using storage space on the Internet or services for file
sharing, believes that there is slowness in accessing these platforms. Follow the reporting
of technical problems of the server (19.4%) and the incompatibility between different
devices or file formats (13%) which can be seen in table 3.21, while 6.2% report the
ambiguity or poor intelligibility of the terms and conditions of the service provider. The
residual share of users who experienced problems related to privacy such as unauthorized
use of personal information by the service provider (2%) or disclosure of data to third
parties due to problems or security breaches (2, 9%). More than half Italian users are
125
complaining about those plights which showing unsatisfactory feedback from them would
be a moderate obstacle for the smoothness of Italian e-commerce.
The limited presence of Italian companies in international market is one of the factors
behind the barrier that hinder the advancement of Italian e-commerce in these days. The
competitiveness of international company either in European market or local market makes
the existence of Italian companies especially those small firms shrinking or even worst
vanish from their own market. Short of capital is the main issue for those small enterprises,
however, in these days is a part of the major issue as well for big or even worldwide Italian
companies.
126
CHAPTER IV
CONCLUSION, SUGGESTIONS, LIMITATION AND
FUTURE RESEARCH
Contents: 4.1 Conclusion and Suggestion – 4.2 Limitations – 4.3 Future Research
4.1 Conclusion and Suggestions
It is clearly stated from this analysis that the difference between developing country and
developed country does real and exist. In every aspect such as infrastructure, education
level, awareness of e-commerce, delivery time, privacy as well as security, and above of
all, a proper implementation of e-commerce which can be converted to sustain retail sales,
it is obviously specified from above comparison that Indonesia definitely still needs to
improve a lot to advance e-commerce sales. Indonesia has to learn from its neighbors like
Singapore and Brunei that already one step ahead in terms of e-commerce technology and
its enforcement. This comparison vividly demonstrate how proficient Italian companies as
well as their people in utilizing e-commerce to outsmart the sales drop and more
importantly economic crisis which they are facing at the moment. Thanks to close
government supervision where Bank of Italy must authorize the establishment of all banks,
the risk of online transaction can be reduced as minimum as possible, although Italy might
not have the best banking system in the world, however, the data shows that e-commerce
share is increasing year on year, which means that people trust and confidence in doing
online transaction is rising, despite fear of fraud that always haunt and exist out there.
Improvement in speed and reliable connection of internet, an openness culture, an intense
development of mobile application, capability in IT, stability of currency also play a
significant role to reach a success rate of e-commerce in supporting national sales. Also, a
greater investment in innovation would be one of many ways to stimulate changes in
127
payment behavior and in the relative use of payment instruments. There is accordingly a
need for policy measures to overcome the obstacles to innovation and to facilitate the
diffusion of innovative payment instruments. At the national level, for instance, the
relatively rapid growth in prepaid cards indicates potential demand for electronic
instruments used primarily for small payments. A direct public intervention would be also
required to foster cooperation among the large banks to create an ad hoc infrastructure for
micropayments.
Alternatively, a viable solution could be to encourage ad hoc micro-payment schemes in
the framework of existing payment infrastructures to change Italian habits in using
traditional payment method.
Indonesia also needs to establish an e-commerce law to protect both purchaser and buyer,
moreover government has to give their support to advance the country by keep investing as
well as attracting advanced countries and doing promotion to invest in Indonesia, so slowly
but sure Indonesia can equate and match their neighbors or even other developed countries,
by all means that there will be a lot of melioration to do to be at least follow a developed
country has achieved, in this case, Italy, however, Indonesia is getting toward that way,
although it is required such amount period of time. It is hoped from this comparative study
Indonesian e-commerce can go toward a better path of creating a sophisticated e-commerce
system like developed countries have, above of all, the improvement of e-commerce can
help Indonesia to boost its retail sales and increase its GDP. Given below are the data that
display how Italy outperforms Indonesia by applying the technology of e-commerce in a
proper way, where as a result, the discrepancies in retail sales are clearly shown, which is a
very good example to reflect Indonesian current situation and it is hoping in the future,
Indonesia can improve their internet/e-commerce condition.
128
Chart 4.1
E-commerce Share of Total Retail Sales in Italy from 2012 to 2018
129
Chart 4.2
E-commerce Share of Total Retail Sales in Indonesia from 2013 to 2018
130
Table 4.1
Average of B2C E-commerce Sales per Digital Buyer Worldwide, by Region from
2011 to 2015
131
Table 4.2
Digital Buyers Worldwide, by Country from 2011 – 2015
132
On the other hand, although Italy is already considered as a highly developed country as
well as a country with a mature and sophisticated technology, this country also needs to
improve their security in online transaction, enhance customer service in order to reach
customer satisfaction, establish and implement its e-commerce law properly which can
give a protection for both seller and buyer, and it is hoping it can encourage more other
Italian companies to build their own virtual sites as a solution of economic crisis. Sites
with multiple languages are also need to be expanded in order to facilitate prospect clients
from overseas. At the end all those efforts, it is expected can surpass the current
achievement for e-commerce sales, so in the future this e-commerce media can be a more
indispensable part to generate higher sales and a solution to overcome financial crisis that
they suffer until these days.
Again, it is hoped from this study, Indonesia can learn from Italy how Italian can
maximizing the utilization of e-commerce in order to increase Italy sales. Indonesia also
needs to adopt the methods that Italy has applied so they can get a sweet achievement that
they have achieved until these days.
4.2 Limitation
Although this study has provided some meaningful answers to the research questions, a
limitation is needed to be addressed from writer point of view. The insufficiency of
updated data and precise forecasted numbers are the main limitations which might affect
the comparison become slightly inaccurate and imprecise, although the numbers and
percentage given already depicted the real and current situation in both countries, however
survey conducted using samples could not represent the whole inhabitants in two countries.
4.3 Future Research
Because of the existence of the above limitation, future research needs to address the above
limitations in order to obtain more convincing results. Future research should attempt to
133
obtain a more reliable data from reliable source, not to mention it has to be the latest data
and updated as well, therefore, a comparison of apple to apple can be applied as well, not
to mention conducting a survey and research in those two countries can give a better
answer for the comparison and the result will be more creditable, accurate and precise.
134
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