E-commerce and E-logistics Trends from an European perspective 5th ASEM Conference on E-commerce E-commerce and E-logistics Trends from an European perspective Dr. Peter M. Friess Directorate General Information Society and Media ICT for Enterprise Networking

Challenges for commerce Increasing international competition New players on the market New business models Overwhelming complexity Provision of new services requested from customers Real-time delivery information Improved after sales services

Challenges for logistics Ever increasing price pressure Low profit margin of OEM affects suppliers More and more global competition More efficient use of space (transport, storage) Provision of new services requested from clients Real-time identification services Assembly services

Status of E-commerce and E-logistics Present challenges Access to equipment and broadband Trust (privacy and personal data) Security of information services Legislation and taxation issues Process reengineering New challenges New technologies (like RFID, mobile Internet etc.) New cooperation and partnership models Crises and instable business situations

New opportunities through RFID Process efficiency Accuracy 10-30% Quick response through real-time geographical information Reduction of loss/theft E.g. reduction between 11-18% in retail (Metro AG) Increase of transport security (road, container shipping) Anti-counterfeiting In 2004, tampered and counterfeited products account for 7% of world trade (Intern. Chamber of Commerce) New products and services Intelligent products Services based on sensing

New opportunities through RFID – con’d The latest research from IDTechEx shows that RFID market will grow from $2.77Bn in 2006 to $12.35Bn in 2010. The International Data Corporation (IDC) estimated that the RFID market for related services is expected to reach $2 billion worldwide by 2008. The Wireless Data Research Group predicts that spending on RFID was about $1 billion in 2003, and will triple by 2007. The Yankee Group estimates that RFID technology will be a $4.2 billion market by 2008. Over the next three years, manufacturers will spend $2 billion on RFID tags and another $1-3 billion on related infrastructure. Another high-tech market research firm, In-Stat, estimates that worldwide revenues from RFID tags will jump from $300 million in 2004 to $2.8 billion in 2009. Security and supply chain applications will take up the largest part of these investments.

Core opportunities for customers Enhanced product freshness Improved demand-driven availability of goods Improved accuracy of product information Ensured product authenticity Expedited payment – wireless payment Intelligent products Better after-sales and lifecycle services

Opportunities for logistics More efficient processes Improved inventory management Increasing planning capacities Increased transport safety Simplified border control

Opportunities for global solution providers Growing global RFID market Increasing technical capabilities Necessity of new and specialised software, networks and services Growing demand for education and services

Challenges Standards Solutions and process reengineering Trust Frequency and data structures Security and privacy Interoperability Solutions and process reengineering Change in mindset of business partners Modification of business processes New software applications Trust Between trade partners Between customer and supplier Between public authorities and industry

Activities by the European Commission Close co-operation with standardisation bodies ETSI, ISO, CEPT etc. ICT Standardisation Work Programme 2006 complementing the European Standardisation Action Plan and extending the coverage in new domains (e.g. GRID, IPR and counterfeiting, e-Customs, etc) RFID Public Consultation 2006 (internat. participation) Towards an European RFID policy with a global scope IST dialogues with Asian countries Research, regulatory challenge, security and trust, spectrum etc. Research co-operation (Framework progr. 6 and 7) co-operation through research projects specific calls addressing international co-operation Worldwide customs RFID pilot project Increased container safety, simplified operations

Conclusion E-commerce and E-logistics need further penetration Standardisation and legislation Process reengineering Adoption and introduction of the RFID technology Creation of awareness in industry Co-operation on business and research level