Pionneers, opportunists and consolidators

E-commerce is a rapidly changing phenomenon. Although still relatively new, (it emerged in the second part of the 1990s, in the wake of the development of internet for business purposes), e-commerce already has a history of different stages and changes of direction. At the time of its appearance, in North America essentially, which the author describes as the era of pioneers during which there was a surplus in supply, some people saw e-commerce as a new Eldorado of the business world, only for it to fall flat on its face. “I remember an American company that arrived in Liege with the intention of establishing a foot-hold in Europe for its concept of selling toys on the net, they were looking for warehouses and negotiations had begun, Then, shortly afterwards, the project was abandoned.  Their share price had gone from 100 to 1”! He explains.

Like so many others before it, the company was a victim of the internet bubble that struck the technological world at the end of the 1990s and the beginning of the year 2000. Galvanized by the increasing interest of investors and easy access to risk capital, these startups proliferated like mushrooms, inexorably attracted by the potentially rich financial benefits inherent in this “new economy”. Many of them were listed on the stock market and saw their share price quickly reach mind-boggling heights. There was a lot of media coverage of the phenomenon even though several of these budding enterprises had not yet developed a concrete concept.

This overvaluation did not survive the stock market crash of 2000. Damien Jacob identifies three causes which contributed to this debacle and the ensuing spate of bankruptcies: too few people had access to internet at the time and changing mindsets is a long-term task; these sites were not up to scratch on a technical, operational and commercial level; many of them dreamed of becoming global but had not realized that in order to succeed in this endeavor it was not enough to copy and paste the American model. That marked the end of the era of pioneers.

The era of pioneers was quickly followed by that of opportunists. Investors lost no time in reducing operating costs and quickly descended upon the still smoking remains of their “ancestors”, causing the sector to take off again. However, this was not sufficient to allow the market to mature sufficiently. Rather, it was the work of the architects of the third wave, the consolidators, “who, while not introducing any new innovation, benefitted from the groundwork and evangelization carried out by their predecessors by marketing well-tested solutions at the right time and on a sufficiently large scale.” The Americans were quicker to act in terms of developing this renaissance than the Europeans, whose distrust lasted longer, before progressively fading during the second part of the 2000s. 

Were Belgian entrepreneurs cautious?

And where does Belgium stand in all this? “We are probably somewhere between the second and third phase”, answers the specialist. Our country has a reputation for being behind its Dutch, French and German neighbors. This is the fault of clients who showed themselves to be too prudent/reticent/ distrustful with regard to virtual transactions (fear of paying online, being the victim of a scam, not receiving the merchandise…). In reality, consumers gradually succeeded in conquering their shyness. In 2012, Ogone (the leader of online payments which holds a market share of 80%) counted 16.6 million Euros in transactions representing an increase of 25.8% in relation to the previous year.