INET 2000 Developing Countries Networking Symposium 18 July 2000, Yokohama-Japan
e-commerce in three landlocked nations* Michael Minges minges@itu.int International Telecommunication Union
* 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.
Topics • Why e-commerce for developing countries • Barriers to e-commerce in developing countries • What kind of e-commerce for developing countries • e-Strategies
Internet Case Studies ITU project to examine diffusion of Internet in developing countries Americas
Asia
Africa
Bolivia
Nepal
Uganda
www.itu.int/ti/casestudies
Why e-commerce for developing nations? • Increase sales, generate hard currency, boost employment and welfare Dhaka Shawl • Gain expertise in • Producer in Nepal information collects: US$ 6.60 technology, reduce • Consumer in Nepal pays: brain drain & urbanization US$ 11.00 • Lead to better • Consumer in USA pays: business practices, US$ 77.00 Source: ICIMOD. enhance transparency & efficiency
Barriers to e-commerce • Economic, social, linguistic • Infrastructure • Market size • e-Business costs
GNP per capita 1998, US$ Uganda
$300
Nepal
$200
Bolivia
$1'000
Source: World Bank.
Language & Literacy Main # Country mother Langu- Literacy tongue ages Spanish 40% Bolivia 39 86% Quecha 37% Aymara 24% Nepal Nepali 58% 124 39% Uganda Luganda 16% 46 64% Source:
Ethnologue www.sil.org/ethnologue, UNDP <www.undp.org/hdro>.
Infrastructure Bolivia
Nepal
Uganda
67%
15%
4%
Telephone lines (Density)
502’403 (6.2%)
234’668 (1.1%)
59’424 (0.27)
Mobile phones (Density)
420’344 (5.2%)
3’154 (0.01%)
87’173 (.40)
PCs per 100 People
1.2%
0.27%
0.28%
Households with electricity
Internet market Bolivia
Nepal
Uganda
7/95
7/95
7/95
Number of ISPs
10
8
4
Number of subscribers (Density)
25’600 (0.32%)
8’900 (0.04%)
4’100 (0.02%)
Number of users (Density)
75’000 (0.94%)
35’000 (0.15%)
25’000 (0.12%)
8
5
1.2 up 1.7 down
US$ 37
US$ 38
US$ 146
Internet start
International bandwidth (Mbps) 30 hours of dial-up Internet
Setting up a web business
Leased line per month
Bolivia
Nepal
Uganda
US$ 1â&#x20AC;&#x2122;000 64kbps
US$ 570 38.8 kbps
US$ 250 64kbps
US$ 12 30
US$ 10 / month minimum
.np free
.ug US$ 50
Web hosting per month Price of domain name
.bo US$ 100
Payment • Limited use of credit cards for B2C: – Nepal: High income level for credit card, only good in Nepal and India – Uganda: Cashbased society – Bolivia: Around 200’000 cards (2% of population)
• Local sites cannot process credit cards
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
e-commerce dimensions Domestic BusinessConsumer BusinessBusiness GovernmentBusiness / Consumer
Foreign
Local business selling to local consumers
Local business
Local business
Local business
selling to local business
selling to foreign business
Government
Export-related
applications
documents
selling to foreign consumers
Tourism Bolivia
Nepal
Uganda
Lake Titicaca Mt. Everest Source of Nile Eco-tourism Buddha Birthplace Mountain gorillas 434’000 tourists* 435’000 tourists* 238’000 tourists* 13% exports* 11% exports* 22% exports*
http://www.mcei.gov. http://www. bo/web_mcei/Turismo/ welcomenepal.com turismo.htm * 1998. Source: World Tourism Organization.
http://www.utbsite.com
Mike’s B2C tourism ecommerce experiences • Hard to locate information • Pricing not transparent • Could not place reservation from web form • ‘Clunky’ compared to big hotel chain websites
www.yakandyeti.com
www.nilehotel.com
Bolivian B2C • Many developing countries suffer from ecommerce 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 www.boliviamall.com products aimed at expatriates as well as services such as local flower delivery
Gurkhas & Pashmina One of Nepalâ&#x20AC;&#x2122;s most famous exports is Pashmina shawls. Dozens of web sites advertize Pashmina wool products. However no Nepal located site accepts credit cards. www.huikaipashmina.com
Nepalese Gurkhaâ&#x20AC;&#x2122;s 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.
www.nepalonline.net/gurkhamanpower
Selling stamps in Uganda â&#x20AC;˘ Uganda Post Office is advertizing stamps on its web site â&#x20AC;˘ Many requests from overseas but payment must be made off-line http://www.ugandapost.com/
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 http://www.madhvani.org – Over 20 companies
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
Strategies • Act now not later. Amazon.com did not wait for perfect legal framework! • Build professional looking sites with good payment and fulfillment process to make web pages indistinguishable from 1st 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.
The end • Selected references – ITU Internet Case Study site: www.itu.int/ti/ casestudies – UNCTAD e-commerce publication: www. unctad.org/ecommerce/building.pdf – IDRC e-commerce project for Uganda: www. idrc.ca/reports/read_article_english.cfm ?article_num=451 – Nepal e-commerce presentation: www.unctad.org/ecommerce/colombo/nepal/s ld001.htm √eriSign small business e-commerce support: www.internet-trustservices.com/customers/small-business.html