Trust factor in e-trading
By A. Shukor Rahman
Computimes (18th June 2001)

TRUST has always been a key element in any trading activities and it is no exception in the cyberworld. In fact, a high level of trust is needed in an electronic trading (e-trading) environment where virtuality is a norm rather than exception. Without trust, people just will not trade.

In the e-trading environment, for example, there must be some people who trust the Internet enough to buy online to get things started, and this is already happening.

However, there must be a majority of people who trust the Internet for e-trading to flourish. This is yet to be achieved. Perhaps, this is because of the low Internet penetration rate in the country. But this situation is changing for the better.

A recent survey by the Malaysian Communications and Multimedia Commission indicated that about nine per cent of local households are connected to the Internet. International Data Corp (IDC), meanwhile, predicted that the country would have a 14 per cent Internet penetration with a total of three million users. By 2005, the figure is expected to reach the six million mark.

The research firm places Malaysia's compounded annual growth rate up to 2005 at 20 per cent compared to the region's average rate of 13 per cent. And by 2005, the number of Internet users in Malaysia is expected to make up about three per cent of the region's total Internet users.

I think these are encouraging projections. However, despite all the wonderful numbers, the increase in Internet subscribers will have little impact on the growth of online trading if the level of trust does not improve.

At the official launch of the National ICT Security and Emergency Response Centre (Niser) in April, secretary of the National Information Technology Council (NITC) Tengku Datuk Dr Mohd Azzman Shariffadeen said Malaysians have a general tendency to distrust the Internet and that is a good thing from the security point of view.

While this is true, the same natural tendency to distrust the Net also spells major obstacles for e-trading proponents to convince the public that it is safe enough to buy things online. And this is not good for the growth of electronic commerce (e-commerce) activities that is at the top of the country's wish list. Of course, to blindly trust the Internet is a foolish thing to do, but mere reminders (or warnings) that many things on the Net are not to be believed do not help either. They only add to the doubts.

Conscious efforts must be made to equip users with sufficient knowledge and understanding that will enable them to evaluate "the good, the bad and the ugly" elements of the Internet on their own. In most cases, I believe that the fear of the unknown is driving them away.

Online businesses, too, must take this "distrusting" nature of the public into account when drawing up their business plans. They must make extra efforts to gain the trust from potential customers. Make sure potential customers see what advantages they would get by shopping online. Perhaps, direct cost-savings will help.

Forget about the convenience factor for the time being. Under the present conditions (distrust, tendency to bargain, etc), I do not think "convenience" would sell your wares.

More importantly, merchants must make sure that they deliver on their promises - in terms of quality of products, on-time delivery, guarantees, etc. Chances are if the customers have good first experiences, they'll be back for more. Otherwise, they'll just stop there. Worse, they may advise their friends not to shop online.

Frauds still occur in the United States and other advanced markets, but online trading is also still flourishing there. My guess is that there are just a lot people who believe in online trading than those who do not.

Furthermore, I believe that consumers have enough trust in the laws that will protect them as consumers. Consumer-centric policies adopted by most business establishments also help in creating the conducive environment to trade online. Disputes, for example, are solved speedily - often, on-the-spot.