Internet

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Last December the express and package delivery giant announced that it had taken an equity position in NetCel360, a provider of business-to -business e-commerce solutions for companies operating in the Asia Pacific region. The investment was made through UPS's
Strategic Enterprise Fund, established in 1997 to invest in new markets and emerging technologies. The alliance hopes to provide the sort of supply-chain transparency in Asia that is available in other parts of the world. "One of the reasons for NetCel and UPS getting together is to provide full supply-chain integration," said Peter Winslow, managing director of UPS
Worldwide Logistics for Asia Pacific. "People expect to have information available at every point along the chain. Today that is not available in the region."

NetCel360 was founded in 1998 by Phillip E. Kelly, who previously had put in 14 years at
Motorola followed by a move to Dell Computer in 1994. At Dell, Kelly was in charge of the
Asia Pacific region where he built up a made-to-order, direct sales operation similar to the
Dell infrastructure in the United States. In the process, he became aware of the unique challenges faced by companies seeking to expand their Internet-based operations in the diverse and complex region.

"The Internet market in the U.S. is built upon a significant infrastructure that was built up by direct sales and catalog guys," said Kelly. "Asia Pacific does not have the same infrastructure to enable e-commerce."

It's going to need one, though. Kelly said e-commerce in the region is expected to grow from
$3.3 billion in 1998 to over $100 billion by 2003, while the number of Internet users is expected to increase from 30 million to over 100 million. To capitalize on that growth rate,
Kelly founded NetCel360 in 1998 to provide one-stop outsourcing services and help companies establish pan-Asian relationships along their supply chains. Services include web consulting and design, field repair capabilities, call centers, customer interface and a full range of financial and translation services.

Kelly is bullish on Asia. The economic crisis has largely abated, he said, and money and optimism are returning to the region. Partnering with UPS Logistics Group, one of the leaders in global logistics and supply-chain management solutions, is also cause for joy. "Asia Pacific is so diverse and government regulations are so vast;' said Kelly. "There are different currency languages for each of 50 countries. It's not like moving product from Arizona to Tennessee.
UPS provides full logistics across the region. That's the critical component of our alliance."

Kelly cited credit card payments as an example of the difficulties of doing e-commerce in

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