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    Views on E-commerce

     

     
     
    Partners Speak Out
    © International Trade Centre, International Trade Forum - Issue 1/2001 
     

    Electronic commerce, one of the newest and most rapidly evolving areas of international trade, is one of the six new areas currently discussed and analysed in fora of the World Trade Organization (WTO).

    What is the perspective of business executives in developing countries on e-commerce? To explore this question, ITC organized a "Virtual Conference" using the Internet. Are there examples of real commercial benefit? What are the risks for developing country firms? Do practical constraints outweigh regulatory constraints such as intellectual property rights, tax and cultural protection? What actions should be taken to promote e-commerce in developing countries?

    Participants in ITC's "Virtual Conference" on e-commerce agreed that valuable e-commerce applications are underway in developing countries, but telecommunications and banking infrastructure remain key challenges to meeting the potential of this medium. Other questions emerged about logistics, trust, and marketing strategies. While these issues are common in international trade, the Internet poses unique challenges.

    What follows is a sample of the views on these issues and a closer look at e-commerce trends in two countries, Cuba and the Philippines, drawn from conference contributions.

    Valuable business tool 

    "E-commerce has indeed been an impetus to globalization... in this part of the world, most big companies and a fair amount of smaller companies have their own web sites and are actively engaged in the transactional aspects of e-commerce, both within the country and overseas."

    Anton Abeyesekera, Director, Singer Ltd., Sri Lanka 

    "I'm in charge of an e-commerce project in a petroleum company here in Buenos Aires (Argentina). We let the customer (gas stations and distributors) order on-line via our web site. They just pick the product they want and after a few seconds they have the stock confirmation. That gives security that the product will be sent the morning after.

    "We increase customer satisfaction and we provide them with other advantages - special promotions for buying via the Web, product information and information about accounts receivable.

    "All of this is possible because we interface our e-commerce system with other company information systems (AS/400, SAP, etc.). That allows us to have less people typing orders. Instead, we can give them new kinds of work, like visiting strategic customers and developing more products."

    Christian Criscuolo, YPF SA, Argentina 

    Portal sites, a foot in the door 

    The e-commerce experiences most frequently cited were national "portal" sites being developed by national trade promotion organizations. 

    "It is expensive for individual firms to create web sites, so non-profit organisations should provide e-commerce services. Our site (http://www.tpcnepal.org.np), is a portal for Nepalese exports of handicrafts, manufactured goods and spices."

    Surendra Nath Gongal, Computer engineer, Nepal Trade Promotion Centre 

    "The Sri Lanka Export Development Board has just inaugurated a web site called Cyber Trader (http://edb.tradersnetsl.ck)."

    Anton Abeyesekera, Director, Singer Ltd., Sri Lanka 

    "There has been a recent trend to build country portals and shopping malls to host and market national companies and products. Some of them include: Siscotel Shopping Mall in Argentina (http://compras.comindex.html); Dímelo Portal in the Dominican Republic (http://dimelo.com); Coexport Portal, El Salvador (http:/www.coexport.com/hello.shtml), YUPI Portal, Latin American region (http://www.yupi.com); and PeopLink, a non-profit portal for crafts and art from developing countries (http://www.peoplink.org)

    Another trend has been to cover a specific industry sector such as papaya growers in Jamaica (http:www.exportjamaica.org/papaya/default.com)."

    Emmanuel Barreto, ITC Trade Information Consultant 

    Training 

    Below are recommendations from participants to address the need for training, a frequent concern. Summarized by the conference moderator, these recommendations could be adapted by national and international e-commerce development programmes. 

    "Practical training is needed to put together suitable e-commerce web sites. Specific programmes could comprise:

    • consultants on e-commerce policy and strategies;

    • an on-line database of best practices by firms, industry associations and governments;

    • an on-line journal on policy and technology developments and their impact on developing countries;

    • train-the-trainers sessions, with an on-line network;

    • digital libraries and web portals;

    • demonstration projects for virtual exhibitions, secure on-line transactions and other issues.

    "To develop e-commerce marketing skills, organizations could synthesize successful business experiences in different markets. Case studies should be a part of training sessions. They should be practical, focusing on such issues as marketing and logistics."

    Peter Gallagher, head of an Australian e-commerce consulting firm and conference moderator 

    Infrastructure gaps in developing countries 

    Constraints were uppermost in most participants' minds, with infrastructure barriers at the top of the list. Some comments from the participants: 

    • Computer lines and equipment

    "Access to computers represents a problem in the developing countries, let alone access to the Internet. Restrictive costs of the use of information technology equipment hinders promotion of e-commerce in these countries. For example, the cost of leasing a dedicated line in Kenya is as high as US$ 11,000, compared to US$ 300 in the United States. Liberalization of the telecommunications market and promotion of low-cost technology (access to the Internet without having to use a personal computer) might ease the problem."

    Hiramani Ghimire, Under Secretary, Ministry of Commerce, Nepal 

    • Banks

    Participants agreed with ITC's Senior Financial Adviser, Carlo Cattani, that payment issues are critical - as they are for other, more traditional trade channels. Sensitizing banks is an important step towards building an e-commerce infrastructure. 

    "There can be problems with the banking systems that do not understand electronic commerce, especially in the Internet form, and thus are extremely resistant to any moves in this direction. It is vitally important that banks be brought into the loop, as they quickly form an integral part of the whole transaction."

    Ian Worrell , ITC Trade in Services Adviser 

    • Regulatory and tax issues

    There was little concern about regulatory constraints, but comments on taxation supported the 'no new taxes' principle: 

    "Developing countries are already paying the tax of expensive connectivity and lack of access to technology. E-commerce has to be seen as an engine to spread trade. It should be understood that new taxes will not foster the most important goal - to reduce costs and lower prices for consumers. Let the benefits of the use of e-commerce be proven before we start thinking of how to charge taxes."

    Oscar Hernandez, Minister and Deputy Representative to the WTO, Permanent Mission of Venezuela to the United Nations 

    Logistics 

    Setting up good delivery systems was another concern. 

    "Many businesses with good products seem to falter when it comes to arranging pick-and-pack operations that will serve Internet orders, because they are set up only for personal shoppers, and do not have experience with catalogue or mail shopping."

    Peter Gallagher, conference moderato 

    Trust 

    Many focused on trust between parties in an e-commerce transaction as an issue. 

    "Major doubts linger. For example, if I select goods of a web site, what guarantee do I have that they will be of the quality described? Can one get samples? This aspect becomes even more complicated while considering services."

    Zubin Kabraji, Director, Singapore office, Confederation of Indian Industries 

    "National Certifying Authorities should be established in each country to break the trust barrier."

    Murat Kulak, Import Specialist, Netas Northen Electric Telekomunikasyion AS, Turke 

    Marketing challenges 

    Several people were concerned about the marketing challenges of e-commerce and felt more emphasis should be put on marketing aspects. As one participant put it: 

    "E-commerce is still too much perceived either as a mere direct-selling device or simply as a new form of communication. In fact, it should be seen as a medium just like any other to conduct international marketing. Once all the hurdles mentioned have been overcome, the need to develop and implement effective marketing strategies for this new medium will be more obvious than it is now."

    Jean-Emile Denis, Professor, University of Geneva Business School, Switzerland/i> 



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