Internet and e-commerce industry in Netherlands

Netherlands, this country is also known as Holland however the population of the country and their language is named Dutch. Well, and what is this country famous for? Surely it is an internationally known Amsterdam, a capital of the country, with its water channels, variety of wonderful and amazing tulips, strange wooden shoes, numerous windmills, a variety of cheeses, the red-light districts and etc. Meanwhile, that is also one of the countries with the highest broadband penetration within the European Union. Thus, we are to talk about the Holland’s IT and e-commerce development. 

Well, according to the estimation on March, 31, 2009, Netherlands occupies the ninth position with 13.8 million users in the Internet penetration among the ten European leaders, leaving Romania behind. As for the Internet usage growth the 2000-2008 period reflected a rapid increase by 253.6%. Turning to the digits we can say that in 2000 penetration made up just 24.1 % or 3,900,000 of active users, in 2006 the figures trebled reaching 10,806,328 volume of users (or 65.9 %) and in 2009 the volume overtook 88%. (as for http://www.internetworldstats.com). Holland is also in the lead internationally with people working at home via computer and Internet.

According to the Information Technology and Innovation Foundation (ITIF) research published in 2007 among 30 most Internet developed countries, average download speed in Netherlands is just 8.8 Mbit per sec (compared to Japan that has the highest speed 61.0 Mbit per sec and Greece that has the lowest speed 1.0 among these 30s). Concerning the prices, Internet access in Holland is cheap enough - $4.31 per 1 Mb, compared to Mexico that has the most expensive Internet access of $ 60.01 and Japan having the cheapest one - just $ 0.27. The Holland Internet top-level domain or ccTLD is .nl. Two year registration contract costs $220 that is rather expensive. In comparison with Luxemburg pricing of $270 it doesn’t seem to be too much, though in comparison with another European country Switzerland, having $99 pricing, it definitely seems expensive (according to http://www.rwgusa.com data).

Historically Holland has been a leader in the IT infrastructure as it’s supported by the variety of Internet service providers. DSL covers 99% of the country, as for the cable Internet it’s available for 90%. As for the market share DSL takes 60% and broadband cable gets the rest of 40%. The country concentrates nation prosperity and power to invest in IT industry in a move to advance and perfect broadband networks, including fibre and ADSL2+. 

As for the DSL network service providers, five largest of them with approximately 2.5 million subscribers (or 60%) are:
•    KPN, has nearly 100% coverage; the company includes five ISP brands: Direct ADSL, HetNet, Planet Telfort and XS4ALL 
•    Orange SA (a subsidiary of France Telecom) 
•    Tele2 
•    Tiscali Wholesale (a subsidiary of Tiscali SpA) 
•    BBned (a subsidiary of Telecom Italia) 

XS4ALL, the first Dutch ISP which offered internet access to the general public, now is owned but not run by KPN. KPN takes advantages of XS4ALL as a main innovator and for that reason gives it the right to run its own business. A new ethernet core network was launched in 2005 by Siemens. Alcatel upgraded KPN's DSL equipment for KPN/Planet Internetplusbellen (VoIP), HetNet Surfen & Bellen (VoIP) and KPN Slim (a low cost, flat-rate internet connection of 128 kbit/s with VoIP) in 2006. VoIP customers get an ability to obtain a new modem KPN Experiabox. In 2007 KPN started offering Mine, the Internet Protocol Television (IPTV) with Video on Demand (VoD). As for the company’s plans, in 2010 KPN is to offer VDSL on an All-IP network in a move to compete with the cable companies.
The five largest Cable ISPs that cover about 1.6 million broadband subscribers (or 40%) are: @Home, UPC, Casema, Multikabel and Delta. These companies are VoIP capable based on the PacketCable standard and networks are based on the EuroDOCSIS standard. UPC, @Home and Casema, the three largest cable providers, cover 92% of Internet market being combined. In September 2006 @Home, Casema and Multikabel were acquired by private equity investors and formed one large cable network, Ziggo, launched officially in May, 2008. 

It’s obvious that the country with one of the highest Internet penetration and IT development in the world, like Holland, is supposed to be e-commerce leader as well. The high level of electronic commerce in Netherlands is also explained by the well-supported technological infrastructure. 

Thus, the majority of the Dutch businesses own websites and many of them are even provided with interactive features. For instance, all the main banks offer online banking and brokerage services, at the same time a lot of large merchants also have the web presence that let their consumers purchase and carry out payments online and get goods with the home delivery. 

E-commerce sphere in Holland is typically represented by B2C and B2B markets that revealed the rapid growth over the last few years. According to Economist Intelligence Unit the most popular online purchases are music, books, films, consumer electronics, and travel and tourism. Meanwhile, growth in online sales continues to outpace the broader retail market. 

For retailing e-commerce businesses in the Netherlands, goods shipped abroad are not charged, in line with the zero-rate tax on exports and OECD guidelines for value-added tax (VAT) due in the country of consumption. VAT is applied on the delivery of goods to individuals or other companies established in the Netherlands. Individuals or companies in the Netherlands buying goods online have to pay VAT, whether importing from abroad or buying from a domestic firm, according to http://globaltechforum.eiu.com.

Concerning the e-banking, the Netherlands occupy the first place amid the European countries, with 68% of Dutch consumers use. It appeared to become the result of the aggressive promotions, limitation of service levels at branch competitors and the relatively low restrictions of bank branches inside the country.

Meantime, e-commerce industry in the Netherlands is sustained by the Dutch government that actively invests in schools Internet connecting and spurs the businesses to be more informed about e-commerce. The Ministry of Economic Affairs of the Netherlands sponsors an advice group Syntens, aiming to help small- and medium-sized businesses to get the completed information about the communication technology and about potential partners and developers. The government platform for developing electronic commerce, the Electronic Commerce Platform Netherlands (ecp.nl), provides merchants with e-commerce trends and legislation advices, also representing government in the international forums.

Some experts claims, Netherlands, like the majority of offshore jurisdictions with a great number of the offshore enterprises, is definitely able to become one of the centers of e-commerce business soon. E-commerce leadership is encouraged and bolstered by the island geographical location, good telecommunications networks, high Internet penetration and sophisticated business infrastructure; and of course the important role in the development of the industry is played by the government support. So that’s just the matter of the time before the country of tulips and windmills grabs the leadership in e-commerce and e-banking business.