PRIVACY: Online Customers Still Wary

B2C e-commerce is great in theory. In practice too, Web sites manage to

attract large number of potential customers. Actual buyers, however, are few.

Several research agencies have tried to ascertain the causes, and found that

privacy is the chief concern of such customers.

Online consumer privacy has become a burning issue with Web sites gathering

personal data from visitors. The sites claim that this enables them to know

customers better, thus providing better service and increasing the likeliness of

their being loyal. But does the customer actually like the idea of divulging

personal information for a better shopping experience?

Key shopper concerns

A

survey of online consumers carried out in the US by Harris Interactive for

National Consumer League lists the loss of privacy as a major concern to users.

Privacy fears, shared by a majority of Internet users, have grown significantly

over the past two years.

Internet users seem to have a well-defined sense of the things that they want

to protect. Protecting the credit card number seems to be the predominant issue

followed by a concern for the social security number, financial assets

information and contact information.

Another report from IDC suggests a distinct change in the habits of the

online shopper since early 2000. This has led to a decline in visits to

untrustworthy Web sites. The key issue, again, was the privacy concern.

US-based Jupiter Media Metrix found that almost 33% of visitors to a Web site

are motivated to provide personal information if they receive better online

content. 31% of visitors though rarely share their personal data while 11%

provide fraudulent data. A guarantee that the information will not be misused

seems to be a more effective motivator than free giveaways and better content.

EMarketer’s report on B2C e-commerce predicts that by 2002, 60% of customers

are going to use software that ensure their online security by removing the

trail of cookies left by them during shopping online.

Are privacy policies the solution?

The

privacy policy or the lack of it may make or break the decision of a consumer to

purchase online. According to a survey by the Direct Marketing Association, 93%

of Web sites provide a privacy policy to inform users as to how the data will be

collected and used.

Forrester Research conducted a survey that showed privacy being a deal

breaker for online shoppers. Consumers at eight US-based toy sites were asked to

rate the ease of locating privacy policies and their overall satisfaction level

with the statements. Five out of those eight sites got low scores revealing

their failure to clearly position their privacy policy.

A majority of online users seem to avoid Web sites, which don’t keep

consumer information confidential. In this context, self-regulation by the

companies in guarding the privacy of the consumer seems to be an effective

solution. A study by PwC, USA, says that once the issue of online privacy is

settled the number of users will shoot up.

B2C in India

India’s

current market size of about four million Internet users is small as compared to

the US. According to predictions by IDC India, this is projected to reach 22.5

million by 2004.

IDC India has put the B2C segment at about 33% of the Rs 230.1-crore

e-commerce market in India. Regarding Net usage, the research firm reports that

about 80% of the users are aged below 35 years. Only 20% of them have a credit

card. The Net is used mainly for e-mail and only 5% of users have made online

purchases.

According to Kapil Dev Singh, manager, Internet and software research, IDC

India, "The Internet is yet to emerge as an alternative medium of purchase

for the average Indian Net surfer. This is because the psyche has not yet

developed as compared to the US where the Net has become a part of everyday

life.’

According to analysts, in India, online privacy concerns are restricted

mainly to revealing credit card numbers during shopping. Online privacy concerns

are an inhibitor to B2C e-commerce. Self-regulation and clearer privacy policies

by online firms may help to develop user confidence and thus give a thrust to

B2C e-commerce.

DQ report