iCare.com Limited, although a subsidiary of Henderson Cyber Limited, is primarily managed by the Hong Kong & China Gas Company Limited (Towngas), a major shareholder in Henderson Cyber.

iCare offers Internet access via set-top boxes that allow customers to interact with the World Wide Web and to send and receive e-mail through their television sets. It also aims to become one of the largest Internet Service Providers (ISPs), and the largest e-commerce portal and Internet shopping mall in Hong Kong.

The iCare business premise is based on the belief that many Hong Kong residents who do not have Internet access would like to become 'wired' if the price were right and if they were offered help in navigating through an unfamiliar technology maze. Targeted initially at Towngas customers, iCare's services are designed to help non-technical people get Internet access and, with it, access to information and goods via the Web.

Customers as Assets
What's a public utility doing running an e-commerce start-up? Leveraging its assets, according to iCare CEO Sunny W K Lee, and trying to make a difference in the lives of its customers.

During the frenzied dot-com boom that launched what seemed like millions of bad business plans, iCare moved quickly - launching itself from concept to customers in only eight months - but with forethought. Using its massive customer base as a starting point, Towngas sought to figure out how it could leverage that customer base, plus the company's information technology, customer service and warehousing infrastructure, and its nearly 140 years of brand history.

The process began with a survey of customers, which revealed that 70 per cent of households served by Towngas contained at least one family member who did not have Internet access. Says Lee, "We asked our customers some very basic questions: 'Are you online?' 'If not, why not?' and 'Would you like to get online?' From the responses we received we thought we could offer our customers help in this area - easy and affordable access to the Internet - and we thought we could make it work as a business."

A Leg up from Towngas
The iCare business is unashamedly built around Towngas infrastructure. The company's first-tier target customers are Towngas customers, many iCare employees came from within Towngas, and the company leverages Towngas IT and marketing systems to cost-effectively reach and service customers.

What this means, says Lee, is that iCare has been able to launch a business relatively inexpensively. The barriers to entry for someone thinking of starting a gas company are enormous, including infrastructure costs and the cost of gaining market share.

Says Lee, "The barriers to entry into an e-commerce business, on the other hand, are minimal. As a result, agility is very important, and fluidity is very important." Giving iCare a leg up in its start-up efforts have been the Towngas call centre facilities, IT backbone, and logistics infrastructure. Towngas call centres received around 2.5 million customer calls last year, and the company sold tens of thousands of home appliances such as gas cookers. Towngas had also previously diversified into the credit card and insurance businesses, leveraging its core abilities to extend its service offerings to customers.

Television as Internet Gateway
Fundamental to iCare's vision has been the belief that people who might want access to the Internet do not have it for one of two main reasons. The first is the cost of buying a computer and its requisite software and hardware add-ons; the second, a fear that learning to use computer technology will be too difficult.

The solution to both of these problems was found in a concept that has been under development for over five years. Silicon Graphics founder Jim Clark, who later also founded Netscape and Healtheon, is credited with envisioning Internet access via television.

Although it has not yet been hugely successful in developed countries, the concept is a very attractive one for developing countries. Microsoft has for several years been working on a set-top box for China that would extend the Internet's reach to the 1.3 billion Chinese who have access to a television, rather than the merely tens of millions who have personal computers. And if iCare's vision is correct, television will provide the ideal vehicle in developed countries for providing Internet access to people on the 'wrong' side of the Digital Divide.

It was to Microsoft that iCare turned for help in realising its vision. With some adaptation - the Microsoft set-top box had been designed to provide access using Simplified Chinese characters, and iCare required a bilingual version offering Traditional Chinese and English - an iCare version of the Microsoft box was developed, and tested and rolled out to customers all within a very short time frame.

Via their television sets, with the aid of the set-top box and a keyboard and wireless controller, iCare customers can send and receive e-mail, surf the Net, and shop for and purchase goods and services in an iCare-managed shopping mall.

Not Your Typical Net Start-up
Since the launch of the company's services last August, iCare's revenues have been increasing dramatically quarter-on-quarter, but Lee says the company is not trying to rush things. It hopes for realistic profits, he says, and never got caught up in the dot-com boom that is now mainly a bust.

Lee says he walks into the office every morning expecting the unexpected, and spends most of the day trying to anticipate his competitors and market developments. "We brainstorm all the time at iCare," he says. "We think and talk about new products and services, and we continually fine-tune our business plan." The main obstacle to the success of an Internet start-up born of a public utility should be, one would think, rigid thinking on the part of employees and management, and a cumbersome bureaucracy that takes forever to get things done. iCare has certainly not taken long to get things done, moving from first concept to service delivery in only eight months and, according to Lee, has turned its public utility origins into an advantage.

In many ways, he says, iCare has had the opposite experience to many dot-com start-ups. iCare staff members with Towngas experience are used to customer demands for '24/7' service availability - no one wants to not be able to get gas when it's time to cook dinner!

They are also used to providing something that many dot-com companies left out of their product mix: service. Service is an especially critical iCare offering, since the company's services are aimed at customers who do not have a great deal of technology experience. These customers, says Lee, generally require more help getting started on the Net than the customers of iCare's competitors.
"Our service culture we inherited from Towngas, as well as our understanding of logistics and product and service delivery," Lee says. "We can also thank Towngas for our knowledge of enterprise IT systems, and for the use of a robust and battle-tested IT backbone."

'Old Economy' Firms Can Succeed
"'Old Economy' firms can succeed in building e-commerce operations," says Lee. Taking lessons from his own experience, he says that many Old Economy firms have 'hidden treasures' that can enable e-commerce growth. What is important, Lee adds, is leveraging existing assets in order to minimise start-up costs, and developing an e-commerce strategy so that it adds value for the organisation and its customers.

"The Internet channel is a must-have communications channel for companies today," says Lee. "It is a must-have to serve customers, to add revenues and to diversify your customer base. And although offering e-commerce may not bring you new customers, I strongly believe that not offering e-commerce will lose you customers in the long run."