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E-commerce in three landlocked nations* Michael Minges International Telecommunication Union INET 2000 Developing Countries Networking Symposium.

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Presentation on theme: "E-commerce in three landlocked nations* Michael Minges International Telecommunication Union INET 2000 Developing Countries Networking Symposium."— Presentation transcript:

1 e-commerce in three landlocked nations* Michael Minges International Telecommunication Union INET 2000 Developing Countries Networking Symposium 18 July 2000, Yokohama-Japan * The views expressed are those of the author and may not necessarily reflect the opinions of the ITU, its members or the countries profiled in this presentation.

2 Topics Why e-commerce for developing countries Barriers to e-commerce in developing countries What kind of e-commerce for developing countries e-Strategies

3 Internet Case Studies Africa Uganda Americas Bolivia Asia Nepal ITU project to examine diffusion of Internet in developing countries

4 Why e-commerce for developing nations? Increase sales, generate hard currency, boost employment and welfare Gain expertise in information technology, reduce brain drain & urbanization Lead to better business practices, enhance transparency & efficiency Dhaka Shawl Producer in Nepal collects: US$ 6.60 Consumer in Nepal pays: US$ 11.00 Consumer in USA pays: US$ 77.00 Source: ICIMOD.

5 Barriers to e-commerce Economic, social, linguistic Infrastructure Market size e-Business costs Source: World Bank.

6 Language & Literacy Country Main mother tongue # Langu- ages Literacy Bolivia Spanish 40% Quecha 37% Aymara 24% 3986% NepalNepali 58%12439% UgandaLuganda 16%4664% Source: Ethnologue,

7 Infrastructure BoliviaNepalUganda Households with electricity 67%15%4% Telephone lines (Density) 502403 (6.2%) 234668 (1.1%) 59424 (0.27) Mobile phones (Density) 420344 (5.2%) 3154 (0.01%) 87173 (.40) PCs per 100 People 1.2%0.27%0.28%

8 Internet market BoliviaNepalUganda Internet start7/95 Number of ISPs 1084 Number of subscribers (Density) 25600 (0.32%) 8900 (0.04%) 4100 (0.02%) Number of users (Density) 75000 (0.94%) 35000 (0.15%) 25000 (0.12%) International bandwidth (Mbps) 851.2 up 1.7 down 30 hours of dial-up Internet US$ 37US$ 38US$ 146

9 Setting up a web business BoliviaNepalUganda Leased line per month US$ 1000 64kbps US$ 570 38.8 kbps US$ 250 64kbps Web hosting per month US$ 12 - 30 US$ 10 / month minimum Price of domain US$ US$ 50

10 Payment Limited use of credit cards for B2C: –Nepal: High income level for credit card, only good in Nepal and India –Uganda: Cash- based society –Bolivia: Around 200000 cards (2% of population) Local sites cannot process credit cards

11 What to sell? Understand e-commerce categories Show me the money –Foreigners –Expatriates Develop areas where there are natural advantages –Local products and services –Travel

12 e-commerce dimensions DomesticForeign Business- Consumer Local business selling to local consumers Local business selling to foreign consumers Business- Business Local business selling to local business Local business selling to foreign business Government- Business / Consumer Government applications Export-related documents

13 Tourism BoliviaNepalUganda Lake Titicaca Eco-tourism Mt. Everest Buddha Birthplace Source of Nile Mountain gorillas 434000 tourists* 13% exports* 435000 tourists* 11% exports* 238000 tourists* 22% exports* o/web_mcei/Turismo/t urismo.htm http://www.welcomenep * 1998. Source: World Tourism Organization.

14 Mikes B2C tourism e- commerce experiences Hard to locate information Pricing not transparent Could not place reservation from web form Clunky compared to big hotel chain websites

15 Bolivian B2C Many developing countries suffer from e- commerce logistical deficiences such as billing & shipping A big barrier is the lack of support for credit card payment One way around this hurdle is to host the site overseas For example Boliva Mall which sells local products aimed at expatriates as well as services such as local flower delivery

16 Gurkhas & Pashmina One of Nepals most famous exports is Pashmina shawls. Dozens of web sites advertize Pashmina wool products. However no Nepal located site accepts credit cards. Nepalese Gurkhas have served as reknowned soldiers abroad for over 200 years. Ex-Gurkha servicemen are leveraging that image and using the Internet to locate overseas jobs for their countrymen.

17 Selling stamps in Uganda Uganda Post Office is advertizing stamps on its web site Many requests from overseas but payment must be made off- line

18 One group does it all In many developing countries, large groups dominate a significant portion of private economy If they can be brought online, significant boost for e-commerce Madhvani Group Uganda –Largest private investor –Over 20 companies

19 Government2Business Significant portion of population in Bolivia, Nepal and Uganda is rural Governments should assist e-commerce applications for farmers Product prices, input costs, transport schedules, weather reports M.S. Swaminathan project in southern India

20 Strategies Act now not later. did not wait for perfect legal framework! Build professional looking sites with good payment and fulfillment process to make web pages indistinguishable from 1 st World sites. Take advantage of free software and applications and support from bi- lateral and multi-lateral agencies. Government should endorse directories and develop relevant local applications Be different.

21 The end Selected references –ITU Internet Case Study site: –UNCTAD e-commerce publication: –IDRC e-commerce project for Uganda: ?article_num=451 ?article_num=451 –Nepal e-commerce presentation: ld001.htm ld001.htm –eriSign small business e-commerce support: www.internet-trust- www.internet-trust-

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