Benefits of sell-side e-commerce in developing nations

1. What are the drivers to the adoption of sell-side e- commerce by businesses in
developing countries?

The drivers to the adoption of sell-side e-commerce by businesses in developing countries are:

•Expand their market

You can make the assumption that developing countries do not possess the same infrastructure as fully developed countries do. Therefore businesses can become restricted to doing business within the geographic area they serve. One could argue that it would be beneficial for businesses in developing countries to utilize sell-side e-commerce to increase the amount of consumers they can target across a larger geographic area.

•Decrease amount of inventory needed/free-up capital

If a business in a developing nation were to utilize sell-side e-commerce, their customers would be able to make purchases online. Therefore the business would be able to implement a JIT distribution system reducing the amount of inventory they would need to store, thus freeing-up capital for other endeavors.

•Reduce the risk of loss

By doing business through sell-side e-commerce businesses in developing nations will be able to reduce the risk of loss to the business. For example; once a business owner closes for the evening they lock their doors and go home, who’s to say that their building won’t burn down or they won’t be a victim of a robbery? Therefore by doing business online they will be able to reduce the risk to their business by not keeping a large amount of inventory at any given time, in any given location.

2. What are the barriers to the adoption of sell-side e-commerce by businesses in
developing countries?

The barriers to the adoption of sell-side e-commerce by businesses in developing countries are:

•Poor infrastructure/lack of distribution channel

Many developing countries do not have the infrastructure to support normal travel throughout every region of their nation. Therefore a business owner in a developing nation might hesitate to utilize new business techniques through e-commerce, simply because their country does not possess adequate infrastructure to support the distribution channel they will need in order to succeed.

•Cost/lack of knowledge

Many developing countries are isolated in regards to regular commerce with developed countries. Therefore if a business owner in a developing country wanted to build a website and begin to utilize sell-side e-commerce, they might be scared off the idea due to their own inexperience and the sequential costs associated with building and marketing a website.

•Quality of life/Distribution of wealth

As is the case in developed countries, many developing countries’ citizens live in poverty. Many developing countries citizens do not have access to clean water and food on a regular basis; forget about access to the internet and credit cards. Therefore it would be difficult to sell a business owner on the benefits of sell-side e-commerce when a large percentage of his fellow citizens do not have the means to become his customers.

3. What can be done to breakdown any barriers?

There are a number of things governments of developing nations can do to break down barriers in regards to sell-side e-commerce within their country:

•Invest in infrastructure

By investing in their countries infrastructure governments will show their entrepreneurs that they are committed to investing in their country and allowing them to be able to compete on a global scale.

•Educate

Governments can pay e-commerce experts to come to their country and educate their business owners in e-commerce. By doing this business owners will be better equipped to respond to consumer demands over time and changing technological trends. It will also decrease the cost associated with building a website, this is because the business owners will not have to hire consultants, and they would be able to build, manage and maintain their website independently.

4. Is e-Commerce good for the economy of developing countries?

E-commerce is good for developing countries’ economies because it provides numerous opportunities for business owners to grow their business through the use of the internet, this gives them access to new customers, suppliers and investors all over the world. A good example of a developing country whose economy would benefit from e-commerce is India. India’s middle class is currently growing faster than any other country in the world; therefore by allowing their business owners and consumers to both sell and purchase goods and services online would drastically increase exports and domestic purchasing which any economist will tell you, is good for the economy