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By Tuo Chinula

NOUMEA, New Caledonia (May 1, 2000 - Islands Business/PINA Nius Online)---Despite being well placed by international standards in terms of information technology and Internet service providers, e-business has only just arrived on the local market in New Caledonia. Although there are many local cyber shoppers who purchase goods on overseas sites, locally electronic commerce has been slow to take off.

One of the reasons for this is that local banks do not have the necessary security software systems in place to process credit card payments over the Internet. Banks have yet to install security systems such as SSL (Secure Socket Layer), which encrypts credit card numbers to prevent hackers from gaining access. The high cost of living in New Caledonia also makes it hard for local products to be competitive price wise on the global Internet market.

Hamid Djaballah, IBM French Pacific regional manager, says the reluctance to change the comfortable status quo is another reason. But this attitude needs to change, he warns, or businesses will get left behind. Enterprises have to start considering themselves as global players because everything's global nowadays, he says.

The main use of the Web in New Caledonia is e-mail followed by research and leisure. The number of Internet subscribers has risen from 2,000 in 1997, to 7,000, although Nicolas Salvador, manager at Internet provider Can'l, estimates the potential to be around 16,000. Nevertheless, the current volume of Internet traffic is sufficient to envisage e-business locally, he says. According to Salvador, the tourism industry and micro-businesses in New Caledonia will have the most to gain from doing e-business externally.

Small structures will be able to sell their products without incurring the usual costs associated with retail overheads. This will enable them to lower their prices so they're more competitive on the global market. E-business won't significantly develop big retail industries, he explains.

Djaballah agrees tourism and products specific to New Caledonia like Niaouli tree essence, and arts and crafts, will have the most success on the external market. However, he says, even though the financial benefits may not be considerable, business enterprises in New Caledonia still have a lot to gain by developing e-business. Ignoring it is leaving the door wide open to competition. It's cheaper to sell via the Net. So if competitors set up a virtual shop their overheads will be lower than a traditional retail shop and they can afford to lower their prices.


Internet provider, Offratel Lagoon, with 3,500 subscribers, is planning to set itself up as a host server for e-business sites. Market research has indicated interest from over 100 professional subscribers. Manager Jacques Beney says so far 15 have contacted the company to discuss further details. Of these, he believes at least 10 will set up sites to begin with.

Offratel Lagoon is aiming to have the sites operational this month, but, says Beney, this depends on whether the security software system for payment at the banking services center in Noumea is ready.

Because many businesses have expressed concern about payment security, initially the sites will be destined for the local market.

Beney does not expect the venture to bring in immediate economic benefits to Offratel Lagoon. But he hopes the extra service will attract supplementary professional clients, especially small enterprises. Some local enterprises have already jumped on the virtual bandwagon despite the absence of Internet payment systems.

Hubert Noilhan, manager of computer services company Dot GED, recently created two e-business sites for a stationary shop and a wine retailer destined for the local market. Noilhan estimates it will be around another three months before the sites can accept credit card transactions over the Net.

Meanwhile, customers will be able to place their orders over the Net and arrange alternative payment methods. The sites will also enable the businesses to advertise themselves to bigger client numbers and improve customer service.

New Caledonian companies need to develop e-business because it's not just about selling overseas. Local clients will go elsewhere if they're not offered this service, says Noilhan.

A handful of e-businesses targeting the international market are also up and running. Based in Noumea, Shop-island ( has been selling island products to external Internet shoppers for two years. Its products include black pearls, New Caledonian coffee, Kaneka music CDs, tikis, kava and paintings. It was set up to complement South Pacific Online ( a tourism information website.

Says manager Jean-Luc Szymanski: "Our e-business site is already on to its third version. We've simplified it a lot since it was first launched because client behavior told us that it needed to be modified.

"The quantity of sales on the site is small, but it has its regular customers. One of our clients is a Russian collector of fossilized shark teeth and we have another customer in the United States who's a big Kaneka fan," says Szymanski. During the festive season we sell a lot of shell necklaces and woven jewelry.

Shop-island uses a United States provider and host security servers in the United States and Australia for payment transactions.

"Most companies in New Caledonia follow what is happening locally, but we watch what's happening on the international scene to keep up with overseas developments," says Szymanski.

The company is continuing to grow and is currently setting up a travel agent on the Net.

Salvador from Can'l, predicts major developments in e-business over the coming months with the establishment of secure payment systems expected in early April. "I think e-business will take off this year once a safe system is put in place for credit card transactions over the Net. But because of the high production costs in New Caledonia I don't think it will be a major money-spinner for most enterprises."

A new gateway to New Caledonia is Launched in March, has information on local institutions, associations, news, phone directories and also gives access to France Telecom search engine Voila.

For additional reports from Islands Business, go to PACIFIC ISLANDS REPORT News/Information Links: Magazines/Journals/Fiji Islands Business.

Pacific Islands News Association (PINA) Website: 

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