e-commerce in 3 landlocked nations

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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$ 1’000 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 Nepal’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 Gurkha’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 • Uganda Post Office is advertizing stamps on its web site • 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


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