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 &
US$ 11.00
urbanization
• Consumer in USA pays:
• Lead to better
US$ 77.00
business practices,
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
$1'000
Source: World Bank.
Language & Literacy
Main
#
Country
mother
Langu- Literacy
tongue
ages
Spanish 40%
Bolivia
Quecha 37%
39
86%
Aymara 24%
Nepal
Nepali 58%
124
39%
Uganda Luganda 16%
46
64%
Source:
Ethnologue www.sil.org/ethnologue,
UNDP <www.undp.org/hdro>.
Infrastructure
Bolivia
Nepal
Uganda
67%
15%
4%
Telephone
lines
(Density)
502’403
(6.2%)
234’668
(1.1%)
59’424
(0.27)
Mobile
phones
(Density)
420’344
(5.2%)
3’154
(0.01%)
87’173
(.40)
PCs per
100 People
1.2%
0.27%
0.28%
Households
with
electricity
Internet market
Bolivia
Nepal
Uganda
7/95
7/95
7/95
Number of
ISPs
10
8
4
Number of
subscribers
(Density)
25’600
(0.32%)
8’900
(0.04%)
4’100
(0.02%)
Number of
users
(Density)
75’000
(0.94%)
35’000
(0.15%)
25’000
(0.12%)
8
5
1.2 up
1.7 down
US$ 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
Lake Titicaca
Eco-tourism
Nepal
Mt. Everest
Source of Nile
Buddha Birthplace Mountain gorillas
434’000 tourists* 435’000 tourists*
13% exports*
11% exports*
http://www.mcei.gov.b
o/web_mcei/Turismo/t
urismo.htm
Uganda
238’000 tourists*
22% exports*
http://www.welcomenep http://www.utbsite.com
al.com
* 1998. Source: World Tourism Organization.
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
http://www.ugandapost.com/
• Uganda Post
Office is
advertizing
stamps on
its web site
• Many
requests
from
overseas but
payment
must be
made offline
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 bilateral 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