1. Global Electronic Commerce & Digital Enablement
IS6600 Seminar 2
Global Electronic Commerce & Digital Enablement

2. How Global is E-Commerce?
45% of the world’s population is online
But of course 55% is not
More Chinese are online than Americans
But so what? One country, or two, is not global
In most developed countries, 75+% of citizens are online; in some less developed, below 10% are online
Markets today involve businesses, governments, consumers and citizens, all talking & transacting with each other

3. Why Are People Online? To socialise To shop
To become part of a community
To be entertained
To learn
To have fun
To date
Learning about:
New subjects 47%
The world 45%
Disease 31%
Medicine 27%
Health 26%
Buying
Clothes 38%
Electronics 27%
Music 27%
Movies 20%
This data is from a US survey. Would it be the same in HK? CN? DE? NL? PK? VE? PY? FJ? NP? BW? CM? DZ? HR? GR? LK? ZA? MQ? TT? PG? NU?

4. Learning Objectives
Explore a variety of E-Commerce applications and contexts, including digital media
See how the online market can be developed and exploited – globally
Focus on cultural and psychological factors like trust and guanxi
Look at E-Commerce in China
Consider other Internet-based applications and their implications for organisations

5. The Buyoyo Story (www.buyoyo.com)
Founded 1996 as DVDshelf.com, later Layoyo
The largest Internet retailer of Chinese Entertainment Products in the world.
350,000 different products: DVD, BluRay, CD, Books, Games, Mobile Accessories, etc..
Partners galore!
YoYo Cash for loyalty.
A valuable niche, first mover advantage and a potentially huge market.
Hardly anyone in Hong Kong has heard of it, but that is irrelevant to its success!

6. SoleRebels – www.solerebelsfootwear.co
What is special about this company?
Distinctive, innovative features of the website?
Global & Local. Small and few resources.
Imagine that you are the CIO. What e-business steps would you recommend for corporate development that keep it local, yet also enhance global recognition.
Is it possible to be locally sensitive, yet globally aware/visible?

7. Adexus – www.adexus.cl Where is Adexus located?
What kind of image do they present?
Who would be interested in their services?
Is there anything distinctive or special?
Can we learn something from this website?

8. Avaaz – www.avaaz.org A global activist organisation
Tens of millions of members, distributed globally
What do they do?
Is this website blocked in some countries?

9. KaoLiBerry – www.kaoliberry.com
This business was founded by an EBKM graduate a few years ago
Like many new online businesses, it tries to carve out a niche where it can operate
What is special about KaoLiBerry?
How could it be improved?

10. C2C/B2C – What about You?
E-Commerce has become normal, yet web businesses need to develop interfaces and content that consumers will find attractive
What are the innovations that you have seen recently?
Come and Share some websites!
What opportunities are still to be enabled?
What would you like to do – but can’t?
Think about integrating senses – voice, video, touch, taste

11. B2B2C Reintermediation Look at www.theoutnet.com
Reintermediating between luxury brands
Who don’t know how to sell online?
And high-end customers
Who have cash, but no time to buy offline
With promises of authenticity, no-fakes, guaranteed returns…
And a huge marketplace
It is all about finding the niche…

12. eBay or TaoBao?
These two companies are similar in some respects, yet different in others.
What are the similarities and differences?
eBay is dominant in most global markets, but not China, where TaoBao is King.
What is American about eBay?
What is Chinese about TaoBao?
How do the Chinese factors drive TaoBao’s success?

13. S-Commerce
What is the value proposition offered by companies like these:?
Kaboodle –
Stylehive –
Mogujie –
Meilishuo –
GroupOn –
Group Buyer –

14. O2O E-Commerce is not purely online
O2O is a hybrid form that combines online and offline segments
Online customers can be drawn to offline stores in a complementary not competitive fashion
Online platforms can link to offline businesses
Groupon, Uber, Airbnb, Didi Chuxing,
Mobile Internet and Payments are the main drivers of O2O

15. M-Commerce Each of us can have multiple devices
These devices could even be embedded into you (under the skin)
In some countries, prisoners and pets are microchipped
Some clubs offer microchips to members to help pay for goods/services

16. Digital Enablement
Digital Enablement (DE) is an emerging but unstable phenomenon of our times
Digital technologies transform, empower and popularize the business, social & consumer activities in which we engage
DE creates opportunities for individuals & organizations
It also helps developing countries to leapfrog over intervening technology developments
But DE is not a magic bullet
Human creativity, innovation and intervention are required
Some people will be disadvantaged by DE
DE requires a) infrastructure, b) education, c) strategy

17. DE Requirements Technology Access + Infrastructure Governance Trust
We take it for granted, invisible and omnipresent
Governance
Essential for security, financial regulation, IP protection
Trust
Assumed, yet if people don’t trust it, they won’t want it
Security
Critical, yet data is regularly hacked from organisations
Education
We need to know why we need it. Digital literacy.
In Africa, the top reason for people not using the Internet is not knowing how to use it or why they should use it.

18. The Digital Divide
The old digital divide was concerned with who had access to the Internet
That’s still here, but with some refinements
The ITU estimates that one billion people do not have telephone access, with an extra 3 billion not connected to broadband Internet
The digital divide has narrowed (more people are visible and online) but also deepened (each new generation of technology leaves some people further behind, ever more invisible)

19. Four Barriers to DE (Huawei)
Availability
The access problem; networks and devices; power supply; high speed; infrastructure
Applications that meet local needs in local languages with local content
Affordability
Of the hardware and network
But also relative to the value that is obtained
Appetite
Why do I need it? How will it benefit me? Fear.
Ability
Digital literacy. How can I do it? Education.

20. Success Stories in DCs
Mobile social media (for work and play) is common, though most of the apps are global, not local
Mobile payments are popular
Taobao Villages in China
But outside urban areas, connectivity is an issue
The range of local applications is more limited

21. DE for Individuals - 1 e/m-Wallets – linked to bank/cc accts
Mobile Money Systems
e/m-Wallets – linked to bank/cc accts
PayPal
Apple Pay
AliPay
Smart Cards – un/linked to accts
Octopus, Oyster, Myki, Opal, EZ-Link, Touch ‘n Go,

22. DE for Individuals 2 Phones
SIM cards (mobile purchases, savings and transfers)
WeChat, M-Pesa, M-Birr, M-Paisa, bKash, mKash, Smart, Mukuru, etc.

23. DE for Individuals 3: BoP
The Bottom of the Pyramid (BoP) refers to the ~3 billion people who live on less than HK$20 a day
Although poor, there are so many people here that they may represent a huge economic opportunity, especially as entrepreneurs
Mobile money systems provide an opportunity for these unbanked people to become banked

24. DE for Individuals 4: M-Pesa
M-Pesa led the wave with a number of mobile money market initiatives, Hqed in Kenya,currently operating in 10 countries with 25+ million registered customers
Established in 2007, by 2014, 50% of Kenya’s GDP flowed through it.
It has also brought financial inclusion to 20 million unbanked Kenyans
Thousands of businesses depend on M-Pesa for most transactions

25. DE for Indiviuals 5: WeChat
In China, WeChat is a major provider of mobile money services
By the end of 2015, CINIC reported that 358 million people in China were using mobile phones to purchase goods and services
WeChat in China is integrated with millions of 3rd party apps

26. DE for Individuals 6: WeChat
But WeChat is not only a Chinese application
In South Africa, Standard Bank directly backed WeChat’s Wallet with support for the most popular apps:
P2P transfers, hotel and restaurant bills, and in-app payments in taxis
But WeChat in Africa will not be the same as WeChat in China: it is localized and each of the 54 countries will require something different.

27. DE for Individuals 7: mHealth
This is one of the most popular domains for DE
There are hundreds of mHealth pilots, though few scale up
A new disease has emerged: pilotitis!
mClinica is a rare scaled-up success story
Digital networks of pharmacies, physicians, and patients in six ASEAN countries.

28. DE for Individuals 8: mHealth
Most mHealth apps are limited to one country, even one city or district
mCamPharma is one – from Cameroon
Designed to help patients find where prescription drugs are available for purchase, because supplies are unreliable
Great idea – but will it scale up?
What is the business model? Strategy?

29. Business Perspectives: Consumer Loyalty Drives Competitive Advantage
“Creating a compelling online experience for cyber consumers is the key to attaining competitive advantage on the Internet”
Jeff Bezos (Amazon CEO)
But is it the only key?
And what does “compelling online experience” actually mean?
Do we agree on what a ‘compelling online experience’ feels like?
Could it be different in different cultures?

30. Business Perspectives: Trust and Distrust
Trust is seen as a critical motivator of online buying.
What might lead a potential consumer to trust or distrust an online shop?

31. Do You Naturally Prefer to Distrust Others?
Distrust propensity
“I would like to buy online, but what I concern most is the e-vendors’ untrustworthiness.”
Lack of EC governance
“I don’t know where to complain about online fraud.”
Insufficient legal infrastructural support
“Counterfeiting is a major concern for transactions in general. It is even more serious online. Why should I bother myself with online purchases?”
“In such a highly uncertain and risky virtual environment, distrust is a more prevalent mechanism than trust to help avoid potentially negative consequences.”

32. Guanxi/Relationships and E-commerce
Guanxi (close personal ties and social networking, typically operating in a dyadic and reciprocal fashion)
Can guanxi be created online?
How does guanxi differ from trust?
Recent research suggests that guanxi is an intimate part of TaoBao’s web-strategy.
Such psychosocial variables must be considered by website managers and business leaders.

33. Personalization Do all customers want the same interface?
Do they all respond to the same stimuli?
Are they all equally goal or process oriented?
Can we use the same tactic to get their loyalty?
Personalization is recognised as a major opportunity - yet also a major headache.

34. Personalization
Studies of culture tell us that stereotyping is dangerous.
Some people like a simple interface, easy to use, quick to find what they want.
Others appreciate a more challenging, or fun, interface.
Hedonism (enjoyment/entertainment value) is a big turn on for some people

35. Hedonism But are you turned on
by colourful graphics, and visually arousing displays of information?
or by distracting icons and flashing lights?
or by a very simple interface that loads fast and gets you what you want?
Also, is it safe to assume that all members of a cultural group share similar preferences? What about across cultures?

36. Compare www.sina.com www.rakuten.co.jp www.vkontakte.com www.gouv.cm

37. BUSINESS / REVENUE MODELS (1) adapted from Michael Rappa http://digitalenterprise.org/models/
Auctions Market makers bring buyers and sellers together
Advertising Extends traditional broadcast model
Infomediary Collects and sells data about users or products
Merchant Online retailers

38. BUSINESS / REVENUE MODELS (2)
Community Loyal users provide
funds and/or content
Subscription Users pay for access
Utility Metered usage or
pay-as-you-go approach
Manufacturer Web compresses distribution channel; customers can tailor their goods before delivery

39. BUSINESS / REVENUE MODELS (3)
Financial Intermediaries
Government Services
Aggregators
E-Ticketing
Trading Intermediaries & Market Spaces

40. Strategic Impacts of EC
Information is a source of revenue
Companies must be able to provide immediate response to requests for information
Quality and speed of information is critical
Extensive information is available from the government and commercial sources (including competitors)
Web-literate (and liberated) consumers have access to all makes and models of a product line

41. Problematic Issues with EC
EC is not without its fair share of problems
These involve such disparate areas as
Taxation
Complaints, Refunds and Returns
Transborder Data Flows
Not to mention consumer comfort with
Security, privacy, lack of ‘touch-and-feel’

42. What if…?
I live in Hong Kong, and use a Canadian intermediary website (but the servers are physically located in Fiji) to buy a book from an Egyptian bookshop, with the payment verified by a bank located in France (which offshores data processing to China), using my Hong Kong issued credit card, and delivery organised through the Cairo office of Federal Express (which is governed by US law).
Where is the transaction taking place?
Which tax law applies?
What should I do if the book doesn’t arrive?
Are there legal concerns about data flow?

43. Lessons for EC The world (or a lot of it) should be the market
Creating a compelling experience is essential
Developing buyer-seller trust cannot be ignored, especially if no legal protection for transactions
There are many business/revenue models, but which one is going to work?
Mobile commerce is growing very fast,…so
You have to take risks…
Some cultures seem to be more risk tolerant than others

44. How Are Social Media and Apps Transforming E-Commerce
Consider the changes we are seeing with social shopping sites, group-buying sites, and social media more generally.
What changes can we expect to see in E- and M- Commerce?
Think in terms of the customers, the kinds of products, the media/channels involved, the payment systems.
Who are the future successful web-entrepreneurs?