In the July 1995 issue of Computing Japan, Forest co-wrote an article on electronic commerce and its related developments here in Japan. In that piece, he and his co-author (Jeff Smith) hinted that a new organization would soon be formed: CommerceNet Japan. On November 19, 1995, CommerceNet Japan officially announced its existence. Here are the details.

News Flash
CommerceNet Japan is Formed!


by Forest Linton

The original Commercenet, based in the San Francisco Bay Area of the United States, was founded in 1994 as a non-profit organization to promote electronic commerce on the Internet. CommerceNet is a US government-sponsored consortium of high-technology companies experimenting with various new ways of conducting business. There are over 140 large and small companies participating in CommerceNet -- 10 of which are Japanese.

One of the goals of CommerceNet (quoting from its charter) is to "accelerate the mainstream application of electronic commerce on the Internet through fielding pilot programs. Pilots include: transaction security; payment services; electronic catalogs; Internet EDI; engineering data transfer and design-to-manufacturing integration..."

In a July 1995 feature article ("Electronic Commerce = No More Keiretsu?") co-author Jeff Smith and I spoke with CommerceNet's Chairman Jay Tennenbaum, who revealed CommerceNet's goals for CommerceNet Japan and international e-commerce in general. According to Dr. Tennenbaum, "While CommerceNet is still rooted somewhat in the Silicon Valley region (which is where the association started), the consortium is expanding rapidly to involve international companies. International participation is extremely important in a number of issues, ranging from the development of international interoperablility standards to the understanding of how different locales raise new electronic commerce issues. CommerceNet recognizes the importance of international participation and strongly encourages the development of local CommerceNet working groups and pilot activities both internationally as well as within the US."

CommerceNet Japan

CommerceNet Japan has been formed as an un-incorporated association having an exclusive relationship with CommerceNet USA. The three primary founding companies are the Japan Research Institute (JRI), NTT, and Fujitsu.

Unlike its American counterpart, CommerceNet Japan is completely privately held and is in no way affiliated with the Japanese government. The initial planning committee consists of the Japanese companies that are currently members of CommerceNet USA: Toshiba, NEC, Mitsubishi, JustSystem, KDD, Cyberbusiness Association Japan, JRI, NTT and Fujitsu. It was these companies that pushed for the formation of a CommerceNet affiliate in Japan.

CommerceNet Japan's founding principles are:

* Promotion of interchange between Japan and the US;

* Fostering international collaboration on issues related to electronic commerce;

* Realization of e-commerce from the Japanese view;

* Contribution to development of e-commerce in Japan's marketplace.

The exclusive agreement between CommerceNet USA and CommerceNet Japan is two-way. CommerceNet Japan will have access to all of the information on the CNET servers as well as be able to participate in the working groups, mailing lists, and pilot studies in America and Europe. In return, CommerceNet Japan will provide CommerceNet USA with a translated summary of activities in Japan -- perhaps on a quarterly basis. This will go a long way in the efforts to develop international working groups that address electronic commerce on a global basis.

Membership information

Membership in CommerceNet Japan is open to any interested company or individual. Currently, there are two types of membership. For an initial fee of ¥1,000,000 and annual dues of ¥1,000,000, a full "member" is entitled
to all benefits of CommerceNet Japan. A "subscriber," on the other hand, pays an initial fee of ¥50,000 and annual dues of ¥120,000. Subscribers are given "observer" status: they can receive information but cannot participate. In order to attract initial participation, CommerceNet Japan is running a half-price campaign until March 1996.

CommerceNet Japan will hold workshops between US and Japanese participants in the form of symposiums, panel discussions, and information exchange sessions. The workshop goals are to incubate new business opportunities and realize global e-commerce. The first workshop will be this spring in Silicon Valley.

CommerceNet Japan strongly encourages companies that are not in the typical "technology" category to join. Participants from the distribution, retail, banking, and transportation sectors are especially sought, because for electronic commerce to succeed, it must cross the boundaries of technology and be adopted by all industries.

The focus

Business-to-business applications-- Electronic commerce can be broken down into two very big categories: mass market solutions and business-to-business. Solutions for the mass markets and end users include electronic clearing of credit card payments, digital replacement for conventional cash (e-cash), and electronic debit cards. Business-to-business issues, meanwhile, focus on systems between corporations and financial institutions. Corporate and government procurement using CALS (Continuous Acquisition and Lifecycle Support) and EDI (Electronic Data Interchange) are two common examples. Initially, CommerceNet Japan will focus primarily on these business-to-business applications of electronic commerce and payment systems.

Structure -- Although not definite at the time of this writing, CommerceNet Japan will most likely be structured in a similar fashion to its American counterpart. Various internal committees and working groups will focus on specific issues and tests. Three sections have already been formed under a managing committee: Planning, International Affairs, and Technology.

I recently asked Akihiro Hompu of JRI, whose company is one of the core founding members, if CommerceNet Japan would be in a position to provide Japanese translations of goings-on at CNET and the e-commerce industry in general. Although he acknowledged that the latest information is available first in English, he said he doesn't feel that is properly one of the roles of CommerceNet Japan. "We will not provide a translating service. We will provide an index function to available information." Hompu also said he feels that electronic commerce, and the Internet in general, is a great way for different environments, organizations, and cultures to meet and communicate -- in English.

Missions -- CommerceNet Japan's main purpose is to delve into the special needs of e-commerce in Japan, issues such as compatibility with the current industrial structure and regulations from the various government agencies that lay claim to electronic commerce and data communications. There are many traditional and cultural differences that set the way Japan does business apart from the rest of the world. CommerceNet Japan will try to incorporate the voices of many industries and go about solving these issues.

JRI's Hompu was quick to add that CommerceNet Japan does not want to be in the position of deciding which technologies should become standards, however, or hamper other e-commerce efforts. He hopes that CommerceNet Japan and its members will be able to work with non-members as well as other organizations (such as government research projects) to develop and promote awareness of the industry in general. "We are not focusing on a particular technology as a standard. We want to be creating an open environment for various technologies.... The market decides the standards."

Toward the future

CommerceNet and its affiliates are on the right track. Everyone seems to realize that the world (especially the networked world) has shrunk considerably, and business today must think globally. Sharing information is a good start. In CommerceNet Japan's case, possibly the greatest significance will be the English reports that it sends to CNET in America. A majority of today's e-commerce technology is currently being developed in the States.

Translated reports of progress in Japan are a valuable way to communicate international needs to the government and companies of the United States. A primary example is the need to lower export restrictions on cryptography and encryption technology and software.

I wish CommerceNet Japan the best of luck.


Forest Linton lives and works in Tokyo, Japan. You can e-mail forest@twics.com, or check out the Digital Forest at http://www.twics.com/~forest/theforest.html.


The CommerceNet USA Web page can be found at
http://www.commerce.net/

The CommerceNet Japan Web page is at
http://www.commercenet.or.jp/index-e.htm


Copyright 1996 Computing Japan Magazine