Impact of e-commerce on developing countries Honghong Sun Avinash Tatineni Jun Tu Prudhvi Nag Valluru

Outline of Our Presentation Impact of E-Commerce to Retail Market in China Impact of E-Commerce to Retail Market in China Internet Fraud on Developing Countries Internet Fraud on Developing Countries Impact of E-Commerce on Import & Export Impact of E-Commerce on Import & Export Impact of E-Commerce on IT Development Impact of E-Commerce on IT Development E-Tourism on Developing Countries E-Tourism on Developing Countries

Impact of E-Commerce on Retail Market in China

The Development Environment of E-Commerce in China China is the world's fastest growing major economy China is the world's fastest growing major economy Total internet user in China: Total internet user in China: million (CNNIC,2006) E-Commerce in China: billion yuan (=70.4 billion US $) Trading volume of E-Commerce in China: billion yuan (=70.4 billion US $) B2B(98%):542 billion yuan B2B(98%):542 billion yuan B2C & C2C(2%):11.1 billion yuan B2C & C2C(2%):11.1 billion yuan

Characteristics of Retail Market in China Huge retail market:950 billion US $ and High growth rate:13% Huge retail market:950 billion US $ and High growth rate:13% Most of retailers in China dont have substantive investment in B2C E- Commerce Most of retailers in China dont have substantive investment in B2C E- Commerce A large number of transnational retail enterprises have invested in China's retail market A large number of transnational retail enterprises have invested in China's retail market

Opportunity to Retail Enterprises by E-Commerce: Reduce costs effectively Give the retail enterprises more information to procure products in the world-wide Give the retail enterprises more information to procure products in the world-wide Reduce the size of entitative shop Reduce the size of entitative shop Reduce the cost the cost of storage and transport of goods Reduce the cost the cost of storage and transport of goods

Opportunity to Retail Enterprises by E-Commerce: Expand Market Shares Expand B2C market to compete with C2C websites (Its nearly like a virgin market in China!) Expand B2C market to compete with C2C websites (Its nearly like a virgin market in China!) According to know the special needs of customers through the internet, provide customers with personalized services According to know the special needs of customers through the internet, provide customers with personalized services Most of the internet users are young high-educated people (Potential purchasing power) Most of the internet users are young high-educated people (Potential purchasing power)

Challenge to E-Commerce Retail Market in China : Credit System Most of Chinese(84%) Most of Chinese(84%) prefer Face-to-face prefer Face-to-face transactions to online transactions to online transactions transactions The modern credit system The modern credit system has developed slowly in has developed slowly in China (Only a few people China (Only a few people have credit card) have credit card)

Challenge to E-Commerce Retail Market in China: Security Mechanism Laws and regulations Laws and regulations on online transactions on online transactions are incomplete are incomplete Concerns about the Concerns about the security technology of security technology of online transactions online transactions

INTERNET FRAUD

WHAT IS INTERNET FRAUD ? WHAT IS INTERNET FRAUD ? The term Internet fraud refers to any type of fraud scheme that uses , web sites, chat rooms or message boards to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions or to transmit the proceeds of fraud to financial institutions or to other connected with the scheme. The term Internet fraud refers to any type of fraud scheme that uses , web sites, chat rooms or message boards to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions or to transmit the proceeds of fraud to financial institutions or to other connected with the scheme.

Major Types of Internet Fraud Major Types of Internet Fraud Auction and Retail Schemes Online. Auction and Retail Schemes Online. Business Opportunity/"Work-at-Home" Schemes Online. Business Opportunity/"Work-at-Home" Schemes Online. Identity Theft and Fraud Identity Theft and Fraud Spam Mails. Spam Mails. Credit-Card Schemes Credit-Card Schemes NO, no more spam! (c) John Coppens 2003 Other Schemes Other Schemes

Impact of this on developing countries: How ? Example: Impact of this on developing countries: How ? Example: Impact on ISPs Bandwidth costs = USD 600 / MB / month Bandwidth consumption for mail = 70 MB / day Incoming mail rejected as spam = 80% Percentage of accepted mail that is spam that gets past filters = 15% Monthly bandwidth cost of spam = USD 6300 Monthly storage cost of spam = USD 5400 Monthly salary expenses for mail / abuse administrators = USD 75,000 Plus the costs of support for users upset at being spammed

ACTION REQUIRED BY DEVELOPING ECONOMIES AGAINST SPAM Putting in place technical solutions Open Source software solutions Formation of CSIRTs and CERTs Computer Security and Incident Response Teams (CSIRTs) or Computer Emergency Response Teams (CERTs) Training of ISP personnel in security and spam handling Anti-spam policy setting and enforcement for ISPs

What to do when I get effected with the fraud ? What to do when I get effected with the fraud ? Report immediately to the concerned officials or to security alert teams or Anti-fraud agencies. Report immediately to the concerned officials or to security alert teams or Anti-fraud agencies.

Impact of e-commerce on IT development on Developing Countries 1. Governments will need to invest a great number of money in IT development, because e-commerce is not advanced in developing countries. In China, the report from CCW Research shows that the government invests 34.5 billion yuan (about 2.3 billion pounds) in Compared with 2002, the investment increased by 15.0%. The investment in 2004 increased by 15.9%. picture1 picture1

Picture 1 shows that rate of hardware,software and service change in china from 2002 to Picture 1 shows that rate of hardware,software and service change in china from 2002 to Development of e-commerce needs a lot of IT employers. A research from a lot of IT employers. A research from the biggest software organization in the biggest software organization in India shows that the number of IT India shows that the number of IT employers increased 24.5% in employers increased 24.5% in Meanwhile it is predicted that the number Meanwhile it is predicted that the number of IT employers will be 1.1 million in of IT employers will be 1.1 million in 2008.

Impact of e-commerce on import and export on Developing Countries Import and export corporation can get feedback from customers in other countries by . This can help Import and export corporation know what they need to do. Import and export corporation can get feedback from customers in other countries by . This can help Import and export corporation know what they need to do. Global e-commerce increased from 0.6 billion dollars to 66.5 billion dollars between 1996 and The number of this increased to billion dollars in We can know from these figures that e-commerce becomes more important in our lives. Global e-commerce increased from 0.6 billion dollars to 66.5 billion dollars between 1996 and The number of this increased to billion dollars in We can know from these figures that e-commerce becomes more important in our lives.

eTourism, What is it? A dynamic interaction between Information & Communication Technologies (ICTs) and Tourism exists. Each transforms the other A dynamic interaction between Information & Communication Technologies (ICTs) and Tourism exists. Each transforms the other eTourism unites Business Management, Information & Communication Technologies (ICTs) and Tourism eTourism unites Business Management, Information & Communication Technologies (ICTs) and Tourism ICTs are applied to tourism processes to maximise efficiency and effectiveness of the organisation ICTs are applied to tourism processes to maximise efficiency and effectiveness of the organisation

The eTourism concept and eTourism domains (Buhalis 2003) eTourism IT / IS Information systems Information Communications technologies Telecommunications Tourism Transport Travel Hospitality Leisure Heritage Business Management Marketing Finance

E-Tourism in developed countries 1.Tourism in U.S is mainly domestic and 90 percent pf tourism sales are made through online 2.Travel is largest source of bussiness to consumer revenues with $52.4 billion in 2004 and is predicted to reach over $119 billion by The top 3 U.S online travel agencies,Expedia,Travelocity,Orbitz all owned by Cendant corp.,comprise about 77 percent of market. 4.Development of online booking,gross booking at expedia increased by 578 percent from $1793 million in 2002 to $10,364 million in In Europe,Opodo and Travelocity represents 60 percent of entire online market 6.The European online travel market grew by 51 percent to reach $23.3 billion in 2004 and estimated to grow to $49.9 billion by this year

E-Tourism for developing countries 1.Tourism in Asia mainly intraregional(78 percent of international tourism arrivals) 2.The international tourism arrivals in Asia and Pacific reaches 147 million in 2004 and has recorded higher growth than in Europe and North America 3.The spectacular growth of China interm of international tourism arrivals is the key factor in rise of tourism in EastAsia 4.According to WTO,china will establish itself as the first tourism destination by 2020.

The main objectives of a DMS are the following: To collect, manage and distribute information on tourism products to a larger proportion of consumers and tourism distributors throughout the world; To develop an integrated tourism product and service offerings; To provide up-to-date and attractive tourism information and products according to the countrys interests; To allow consumers to easily make a reservation and quickly receive a confirmation; To reduce marketing costs compared with traditional channels (such as printed material); To collect information on customers and to design marketing strategies for different market segments.