Building Inclusive E-Markets By Hanniya Abid Assistant Professor COMSATS Institute of Information Technology E-Marketing Lecture 5

Objectives 4-2 After this lecture, you will be able to: Discuss overall trends in Internet access, usage, and purchasing around the world. Define emerging economies and explain the vital role of information technology in economic development. Outline how e-marketers apply market similarity and analyze online purchase and payment behaviors in planning market entry opportunities.

Objectives, cont. 4-3 Describe how e-marketing strategy is influenced by computer and telephone access, credit card availability, attitudes toward Internet use, slow connections, website design, and electricity problems. Review the special challenges of e-marketing on the wireless Internet in the context of emerging economies. Discuss the controversy related to the Digital Divide. Explain how e-marketing is being used with very low income consumers.

Idol Goes Global 4-4 American Idol is broadcast in over 100 countries, often 48 hours after the show has been aired in the U.S. Its popularity has spawned 39 national versions in countries such as Ethiopia, the Philippines, Russia, and Kazakhstan. Pakistanis can follow the season’s music contestants by watching Pakistan Idol. Others can follow it online

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Idol Goes Global, cont. 4-6 Pakistani viewers vote for singers and apply to be a contestant on Indian Idol through SMS. The sharing of popular culture has been enhanced by the convergence of TV, Internet, mobile phones, and short message services.

Overview of Global E-Marketing Issues 4-7 Users from other countries, speaking languages other than English, will dominate the Internet. By 2010 there were approximately 499 million English- speaking and 407 million Chinese-speaking web users. The online marketplace is changing and will require that global e-marketers understand country e-readiness.

WORLDWIDE INTERNET USAGE 4-8

Global Markets 4-9 It shows that worldwide Internet usage increased more than 45% between 2007 and Asia has the most Internet users. Africa saw the greatest growth in Internet use. North America has the highest penetration as a percent of the population.

Emerging Economies 4-10 Emerging economies are characterized by a rapidly developing middle class, which creates demand for products and services. Four countries represent the power and opportunity in emerging markets: Brazil, Russia, India and China. Countries with emerging economies can be found on every continent.

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Importance of Information Technology 4-12 The Internet accelerates the process of economic growth through diffusion of new technologies. explosive growth in software and IT. E-marketers in emerging economies confront marketing issues and unique challenges related to the conditions of operating within a still developing nation.

Market similarity 4-13 Marketers in emerging economies must find market similarities in order to be successful in selling products.

E-Commerce Payment and Trust Issues 4-14 E-commerce in emerging markets is often hampered by limited use of credit cards and lack of trust in safely conducting online transactions. Pakistan, for example, is still predominately a cash- based economy and credit cards are scarce. In Bolivia, only 2.3 percent of the population has a credit card. Credit card use is virtually non-existent in Ethiopia.

E-Commerce Payment and Trust Issues, cont E-marketers working in emerging economies should also understand attitudes toward online purchasing. Many Internet users do not make an online purchase because they think it is too risky. Payment mechanisms need to be worked on long-term relationship with the Payment Card Industry Security Standards Council (PCI SSC) is required 4-15

Consumer concern about online use of credit cards 4-16

Technological Readiness Influences Marketing 4-17 E-marketers must deal with daunting issues of basic technology: Limited access to and use of computers and telephones High Internet connection costs Slow Internet connections speeds Unpredictable power supplies

Computers & Telephones 4-18 Global computer ownership and access is unevenly distributed. Ownership ranges from 84% in Kuwait to 2% in Bangladesh. Telephones (and connectivity) can be scarce and expensive. Many consumers in countries with emerging economies access the Internet from telecenters, small shops that offer Internet connections.

Internet ACCESS Entrance to a Typical Cabin as in Lima, Peru 4-19

Internet INFRASTRUCTURE 4-20 Countries with emerging economies often have higher Internet-related costs. Dial-up costs can vary considerably. Broadband connections are developing quickly and growth is predicted to come from emerging markets. South Korea has one of the highest broadband penetration rates and one of the world’s fastest, cheapest networks. Emerging economies’ sporadic electricity can also be a challenge for e-marketers.

WIRELESS INTERNET ACCESS 4-21 At the end of 2010, there were billion mobile phone subscriptions worldwide. Two-thirds of the world are now connected via mobile phones. Challenges of wireless e-marketing: Modification of website content for small screens Text entry using tiny keypads Content development Pricing and secure payments Differences in consumer behavior with the mobile Internet

The Digital Divide 4-22 E-marketers must consider the social environment in which e-business operates. Disparities with regard to technology access can create a digital divide between countries or populations. The digital divide raises challenging questions for global policy, international business, and entrepreneurship.

Building Inclusive E-Markets 4-23 Explosive growth of mobile phones has enabled e-marketers to reach base of the pyramid consumer segments. Mobile banking is one of the most successful e-marketing efforts. In heavily agricultural countries, mobile applications for farmers are making them more productive. Kenyan farmer lauds internet as saviour of potato crop

4-24 “The images the world sees of Pakistan are difficult ones, but the country is also home to over 1 million craftsmen. HOMETOWN’s craftsmen have been shaping leather for generations, standing the test of time. Our goal is to keep that art form alive for many more generations to come.” — WAQAS ALI, FOUNDER

4-25 The Idea: Back in 2010, the founder Waqas met with Hussain in the local council of his small town. Hussain, an experienced shoe master was running his small unit of handmade leather footwear. This was an amazing group of talented craftsmen, most of who have been making shoes generation after generation. But everything wasn’t going well, their small business was declining mainly because of limited resources and decrease of demand in local market. So, Waqas shared this experience with his friend Sidra. Both started discussing how they could use internet to help these highly skilled artisans make a living doing what they love. These set of conversations lead to building HOMETOWN.

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Summary 4-28 Emerging e-Markets Opportunities Barriers to entry

Oh, one last thing… 4-29 Visit If you want to send a courier to another country, what steps would you take? How have they made the process easier? What difficulties might you run into when delivering to an address that doesn’t use English Characters? How does TCS address these issues?