What are the reasons for the e-commerce development?

Electronic commerce (e-commerce) is a fashionable mode of exchange. It knows a strong growth and it succeeds in attracting a great number of actors and economic actors thanks to the world development of Internet and to the fast progression of the access to this network.

What are the reasons for the development of e-commerce?

The reasons for the development of e-commerce are diverse. It is an investment with high added value. It is as much beneficial to the distributors and suppliers as to the final users.

Indeed, the customer, to obtain all that he needs, only has to make his purchases on the Web. They no longer need to go to the store to find the product they are looking for. He has all the information and characteristics of the desired product (price, available colors, size, material, etc). This also applies to services.

Moreover, the delivery of the order is carried out at home, and this by respecting the times recommended by the supplier. The prices charged on the Internet are generally lower than those charged on the real market.

As far as the merchant is concerned, distance selling saves him an important part of the expenses and brings him more business.

E-commerce opens up new opportunities: Are developing countries ready for it?

The export of services, software development and hardware manufacturing are the three main market niches open to companies in developing countries and economies in transition. Traditional exporters can also take advantage of new technologies to reduce costs and reposition themselves in the international market. But are the companies that would benefit most ready to make the move?

New ways to do business

The digital economy is reshaping international trade as new modalities take hold and new trade intermediaries emerge. Trade continues as before, but with new methods, and also new possibilities: this is precisely what makes e-commerce interesting.

An evolving market

E-commerce opens up new opportunities for export-oriented companies, especially smaller ones. They can access inputs more quickly, streamline export supply and distribution chains (e.g., by eliminating intermediaries) and thus reduce transaction costs.

E-commerce capability does not mean that an exporter must manage every step of the transaction online. For now, the market requirement is not there. Export development in the digital economy is more nuanced.

The challenge remains, however, to build capacity in this area. This requires a concerted response from both the entrepreneur and public sector policymakers and trade support institutions (including banks).

A phased approach

Companies should plan to go electronic in stages. This might start with building the capacity of a few people on their team, establishing a web presence, creating a communications infrastructure so that the company is ready for anything, extending the electronic network and its use to partners, customers and suppliers, and redefining competitive strategies to include

In the short term, SMEs in developing countries and economies in transition does not need to aim for an ideal level of e-skills. Nor do public sector e-business knowledge and development programs need to be taken to that level of sophistication.

Rather, public sector programs should ensure that firms engaged in exporting achieve a level of e-competence that enables them to establish an electronic presence in the international marketplace and begin to introduce e-commerce systems for internal operations (i.e., Stage 3).

Eventually, companies should move toward full response capability. There are signs in the international marketplace that confirm what is the minimum level of e-skills needed for a company to be competitive in the export market.

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