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Swiss Biding Their Time On E-Commerce

Ulrika Lomas, Tax-news.com, Brussels

22 December 2000


The Economist Intelligence Unit has just produced a report on e-commerce in Switzerland which concludes that although a growing number of firms in the Alpine country are looking to go down the e-commerce road, the great majority are waiting for further developments in electronic security and watching the actions and experience of their competitors.

According to the EIU, the Swiss outlook on e-commerce varies widely according to the type of business, industry and company size, but the overriding attitude is one of caution. Most firms are worried about the security risks involved in e-commerce. In fact, most mangers have not looked much beyond websites and e-mail, and they regard the Internet mainly as a marketing rather than an e-business tool.

The EU's research programme Esprit, in a June 2000 report, also found that the business-to-business (B2B) sector is sceptical about e-commerce. Although two-thirds of Swiss B2B companies have websites, these are primarily used as 'brochure' sites. Only one-third of companies conduct business on the Internet. The EU report stated that activity is greatest in German-speaking Switzerland.

The vast Swiss watch industry tends to be watching and waiting, although some firms have set up online. The same goes for the travel industry. Major Swiss travel company Kuoni still only conducts about 1 per cent of its sales online and continues to prefer the traditional high street approach.

There is however some progress to be seen in the retail financial services sector. Credit Suisse, for example, conducted an e-commerce pilot study in Italy that has allowed it to double the amount of funds managed via the Internet to SFr4bn in 1999 and has now installed a pan-European e-commerce platform that is operating out of Luxembourg. Some 200,000 clients in Switzerland now use Credit Suisse banking services directly on the Internet and its youtrade.com brokerage service, launched in April 1999, counted 14,000 clients by mid-2000. About 36 per cent of its stockmarket operations now take place online.

The Federal Banking Commission reported that it had received several concrete proposals in 2000 for retail online banking and expected a few of these to start up rapidly. Major insurance company Zurich Financial Services is also making great online strides.

One reason why Internet usage in the Swiss business arena is progressing slowly is that electronic invoices are not accepted for VAT purposes.

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