COMP 6125 An Introduction to Electronic Commerce Session 4: E-Commerce In Developing Countries.
Transcript of COMP 6125 An Introduction to Electronic Commerce Session 4: E-Commerce In Developing Countries.
COMP 6125 An Introduction to Electronic
Commerce
Session 4: E-Commerce In Developing Countries
Introduction
• There is doubt regarding whether there is enough information on the Web that is relevant and valuable for the average SME in a developing country that would make investment in Internet access feasible
• Underlying this is the fact that most SMEs in developing countries cater to local markets and therefore rely heavily on local content and information
Introduction
• there is a need to substantially increase the amount and quality of local content (including local language content) on the Internet to make it useful especially to low-income entrepreneurs
Issues of Electronic Payment Systems
• Transaction security
• Absence or inadequacy of legal infrastructures governing the operation of e-payments
• Lack of developed online banking policies and procedures
• Undeveloped credit card industry
• Many developing countries are still cash-based economies
Current Methods Of Payment For Online Transactions
• Traditional– Bank transfers– Money orders– Cash-on-delivery
• Electronic Payment– E-cash, e-cheques, smart cards, encrypted
credit cards
Impact of B2B E-Commerce
• Transactions costs
• Disintermediation
• Transparency in pricing
• Economies of scale and network effects
E-banking
• Includes telephone banking, credit cards, ATMs, direct deposit, electronic bill payments
• Also includes products mostly in the developing stage, including stored-value cards such as smart cards/smart money, and Internet-based stored value products
E-banking
• In developing countries, still in early stage of development; most banking carried out using traditional methods
• However, there is increasing growth of online banking; promise of future growth in this area
Market Factors Affecting E-Banking Development
• Online a small number of banks offer Internet banking
• Security issues
• Preference for personal contact with banks
• Access to high quality products – Internet services too basic
Uses For Entrepreneurs of Developing Countries
• Facilitates the access of artisans and SMEs to world markets
• Facilitates promotion and development of tourism at global level
• Facilitates marketing of agricultural and tropical products in global market
Uses For Entrepreneurs of Developing Countries
• Provides avenues for firms in poorer countries to enter into B2B and B2G supply chains
• Assists service-providing enterprises by allowing them to operate more efficiently and directly provide specific services to customers globally
• Provides means for acquiring online technical support, requesting maintenance/repairs, ordering replacements parts, software tools and applications, lodging technical inquiries, etc
Uses For Entrepreneurs of Developing Countries
• Able to partake in discussion groups with persons around the world who are also in the same business/industry– Share information, experiences, solutions to specific
technical problems– Valuable to entrepreneurs who are geographically
isolated from peers in same business
• Services sector able to expand market with the increased ability to transact directly with international customers and advertise services
Current Uses Of Internet by SMEs
• Communication and research; least used for e-commerce
• E-mail for communication purposes (considered very important)
• Extent is limited by recognition of importance of face-to-face interaction with buyers and suppliers; level of confidence of using e-mail for communication with both suppliers and buyers increases only after initial face-to-face interaction
• In some case, static web sites only advertising company or products
Barriers To Use
• Unfavourable economic environment
• High cost of infrastructure and connectivity
• Security concerns
• Poor internal communications infrastructure
Barriers To Use
• Insufficient resources and funds
• Perceived lack of relevance or value added
• Lack of supporting banking facilities for online merchant accounts
Role Of Government
• Establishing laws and policies for e-commerce
• Be leading-edge user of e-commerce and its applications in operations to encourage mass use
State Of Current Laws and Policies
• Most developing countries do not have a developed framework in place
• Issues still unresolved; for example: contract laws not rewritten to include new definitions of writing and signing
Discussion
• What can be done by governments to promote the use of e-commerce for SMEs?
– Strengthening consumer protection– Network infrastructure and localization of content– E-Government– Awareness campaigns– Legal and jurisdictional framework– Pilot projects and initiatives for HRD and capacity
building– Establishing a Certification Authority– And more!
Links
• Reference– “E-Commerce and E-Business/E-Commerce in
Developing Countries”, Wikibooks, http://www.wikibooks.org
• Of Interest