What a coincident! I came across this piece.
We did a demonstration of our WebCM package to a travel agency a couple of weeks ago. They used to be hosted at a web-hosting company specialized in serving travel agencies. The web-hosting company went busted and were bought by another travel agency. This is bad for our potential client because their competitor may then have access to their website visitors' profile and possibly, other important data.
Our potential client although well impressed with WebCM, was however reluctant to commit. During casual telephone conversation with one of their senior employees, he indicated that they would wait and see what would happen with the existing supplier. Corporate suicide?
I see small to medium size travel agencies doomed in the next two to five years. Plane tickets are a commodity: one Cathay return ticket to London is identical to another, and whoever sells it cheaper would sell more. Potentially noone could sell Cathay tickets cheaper than Cathay itself, and Cathay could easily wipe out all the Cathay agencies overnite by selling cheap tickets direct from its own website. All the other airlines will follow suit eventually. And then there is Li Ka Shing's latest venture priceline.com operation in Hong Kong. Whatever Mr Li is involved in, all the small independent traders tend to be marginalized. I expect small and medium travel agencies to be driven out in the future just like your local butchers are being driven out now. Bigger travel agencies who organize their own local and foreign tours may survive, on thin margin as today, but even this is uncertain. Cathay organizes their own packages, and so could priceline.com. They could easily enjoy a bigger economic of scale.
The Post Office offering a clearing house service for online transactions seems to be a good way to go. It is difficult to do ecommerce in Hong Kong, because none of the banks and credit-card companies are cooperating. I have been told that to get a bank to handle your online transaction, you need to put HK$2M on account. There are other folks who would do it for you, but they charge an expensive monthly fee, plus a high commission, which virtually wipe out any competitiveness you may have gained by going online.
The Post Office could easily become the saviour of the small online traders by handling both the delivery and the transaction. Since it can make profit out of the delivery service, it can also keep the transaction commission relative low. The Post Office may be in the prime position to move into this new business model.
8:15:06 AM 
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