10.  Risk/ Opportunity

Credit card fraud is probably top risk for online businesses. The Internet is the perfect environment for every crook, thief, and pickpocket to ply their trade with almost complete anonymity. Generally, there is around 1% fraudulent rate but it all depends on the product it carries. Those that are most easy to resell such as cellular phones would have the highest fraudulent rate, whereas products for professionals only carry the lowest fraudulent rate. In order to counteract this, ZiWatches will select a payment gateway provider who has a fraud guarantee system and who can provide enough background information of the customer before processing the order. Effective implementation of anti-fraud protective measures can reduce online fraud by over 90%. It can also save a lot of time and trouble so that one can concentrate on expanding the business.

Delay delivery or lost orders are the risks that a mail order company needs to face. Not only does it cost the company in terns of lost goods, but will also affect its image. There are many reasons that lead to delay delivery or lost orders but most of them are out of the control by the company. Sometimes the order may be hold up by the customs of the recipient country, or the address is undeliverable or nobody to sign the parcel on delivery. ZiWatches will try its best to minimize all possible delay or lost order from its end. First of all, all orders are shipped by either registered airmail or courier. Each package has a tracking number and has a minimum compensation in case of lost order. The postal address is double-checked before sending out because sometimes the shipping address is different from the invoice address especially when it is ordered as gift to a friend. Each order is placed in a padded envelope with the address clearly typed on weatherproof label to avoid any damage or misunderstanding during delivering.

There is also a risk that money spent on ineffective advertising. This is a risk that all online businesses will have to face especially those with ambitious plans. For this reason ZiWatches will start off with a very conversative approach to advertising and will monitor each campaign carefully. On the other hand, the opportunities for an online watch retailer are clearly there. In the U.S. retail sales through the Internet in the 2001 grew by 19.4% over 2001 and are expected to expand at the same pace for the next several years. Furthermore, only 2% of the World's population have access to the Internet at present and this number is expected to grow exponentially annually. Security of credit card transactions has improved considerably over past few years so that more and more people are willing to buy through their Internet. Therefore this is a good time to start an online business, especially since the weak Hong Kong economy meant that cheaper sources of goods are available, and also that many lessons had been learnt from the dot-com bust so that ZiWatches will not have to make the same mistakes.